Nobel laureate Abhijit Banerjee met with Prime Minister Narendra Modi today

Highlights Dr Banerjee said that the banking crisis "is critical and frightening".

PM Modi talked about his way of thinking about India, Dr Banerjee said

Won't get into controversial statements, have been warned by PM, he said

Nobel laureate Abhijit Banerjee, speaking to the media after his meeting with Prime Minister Narendra Modi, today said he would not get into controversial statements because he had been warned - by the Prime Minister.

"I had a cordial and good meeting. PM Modi started by cracking a joke on how media is trying to trap me to say anti-Modi things... He's been watching the TV and he's been watching you guys. And he knows what you are trying to do," Abhijit Banerjee remarked. He had been asked about the meeting taking place against the backdrop of a debate over his comments on an economic slump.

Dr Banerjee, who shares the 2019 Economics Nobel with Esther Duflo and Michael Kremer, also said that the banking crisis "is critical and frightening".

"The crisis is critical and frightening and we should worry about it. We need some important and aggressive changes," he said.

Strongly criticising the Central Vigilance Commission (CVC), he said the government's stake in public sector banks (PSBs) should be reduced to less than 50 per cent so that the vigilance body did not regulate and "interfere" with the banks. "Check and balances are required but (the CVC) is spoiling and allowing a rot in public sector banks and making them further lend until it collapses."

Abhijit Banerjee raised concerns over the long-term health of public sector banks in India

Dr Banerjee declined to respond to a question on India's low ranking on the Human Development Index and said: "I have had no contribution to the HDI and it is doing quite okay without me. So, I don't want to get into something I am not involved in."

Earlier, just after the meeting, he had said that the PM talked about his way of thinking about India. "The PM was kind enough to give me quite a lot of time and to talk a lot about his way of thinking about India, which was quite unique. Because one hears about policies but one rarely hears about the thinking behind them," he said.

"I had a cordial and good meeting," Abhijit Banerjee said of his meeting with Prime Minister Narendra Modi

"He talked about the way he sees governance in particular. And why maybe the mistrust of the people on the ground colours our governance... And how it therefore creates structure of elite control over the governance process, (which is) not a responsive government. In that process, he very nicely explained how he's trying to reform the bureaucracy to make it more responsive, to understand ways in which people's views need to be taken into account and to expose them to reality on the ground. It is important for India that we have a bureaucracy that lives on the ground," the economist said.

"Thank you, PM... that was a unique experience," he added.

PM Modi tweeted that he had an "excellent meeting" with the Nobel winner. "His passion towards human empowerment is clearly visible. We had a healthy and extensive interaction on various subjects. India is proud of his accomplishments. Wishing him the very best for his future endeavours," said the PM.