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The 6th C D Deshmukh Memorial Lecture 2018
February 9, 2018

Nehru Memorial Library Auditorium,Teen Murti

Measuring the Wealth of Nations

 

Sir Partha Dasgupta, one of India’s most eminent economists and globally recognized for his vast contributions to both theory and applied research in economics, delivered NCAER’s 6th C D Deshmukh Memorial Lecture at the Nehru Memorial Library Auditorium, Teen Murti, in New Delhi, on February 9, 2018.  The Honourable Union Finance Minister, Shri Arun Jaitley, was invited as the Guest of Honour .The distinguished audience included eminent economists, senior civil servants, prominent media persons, industry analysts, and students. 

 

In his Deshmukh Lecture, Professor Dasgupta explored a conceptual framework that offers a unified language for both thinking about intergenerational sustainability and the key policy issues that must be addressed for increasing the current well-being of the citizens of a country.  He showed why when we talk about the economic growth of a country we should mean the growth in its wealth (which is the social worth of an economy's entire stock of capital assets including reproducible capital, human capital, and natural capital), not growth in GDP, nor improvements in the many ad hoc indicators of human development that have been proposed in recent years. He argued that GDP and other adjusted GDP measures do not measure true economic growth, which should be about expansion in the capacity to produce goods and services.  GDP is not able to do that because it only measures production or income in a given year.

Professor Dasgupta also explored the notion that by poverty we should mean low levels of wealth, not income, and that the distribution of well-being ought to be judged in terms of the distribution of wealth, not income. Professor Dasgupta noted that, “The concept of wealth asks us to extend the idea of investment well-beyond its conventional usage. This perspective has radical implications for the way national accounts are prepared and interpreted.” 

 

His Lecture, which can be viewed here, concluded with a sketch of recent publications that have put the perspective to work by tracking wealth accumulation in contemporary India and, more tentatively, in a sample of over 120 countries from which the India data was drawn.    


Dr Shah concluded, “Wealth accounting is increasingly needed to complement GDP, even though it will not replace it. Flow variables like GDP, are directly related to current well-being.  Stock variables, like inclusive wealth, are instead related to potential intergenerational well-being.  An increase in inclusive wealth implies that future citizens will inherit a larger productive base and could therefore enjoy potentially higher levels of well-being, even though this cannot be guaranteed because we don’t know the future.  Government statistical offices need to increasingly create annual balance sheets measuring the value of natural and human capital. Citizens can then use the wealth measures to hold their government more accountable for the policies it implements. Without wealth accounting, all citizens can do is to look at growth rates of GDP per capita and hope that they will keep going up indefinitely.”

 

Professor Dasgupta's research interests have covered welfare and development economics, the economics of technological change, population, environmental and resource economics, the theory of games, the economics of undernutrition, and the economics of social capital. He has published extensively in all these areas. 

 

NCAER instituted the C D Deshmukh Memorial Lecture series in 2013 in memory of one of India’s most eminent pre- and post-Independence economists and a founding father of NCAER in 1956, Sir Chintaman Dwarakanath Deshmukh. 

 

About Partha Dasgupta

Sir Partha Dasgupta, FRB, FRS, is the Frank Ramsey Professor Emeritus of Economics at the University of Cambridge, a Fellow of St John's College, Cambridge; Visiting Professor at the New College of the Humanities, London; and Professorial Research Fellow at the Sustainable Consumption Institute, University of Manchester. He taught at the London School of Economics during 1971-1984 and moved to Cambridge in 1985, where he served as Chairman of the Faculty of Economics during 1997-2001. During 1989-92 he was also Professor of Economics, Professor of Philosophy, and Director of the Program in Ethics in Society at Stanford University.  He was an Andrew D. White Professor-at-Large at Cornell University during 2007 to 2013.  Since 1999 he has been a Founder Member of the Management and Advisory Committee of the South Asian Network for Development and Environmental Economics based in Kathmandu. In 1996 he helped establish the journal Environment and Development Economics, published by Cambridge University Press, with the aim of publishing original research at the interface of poverty and the environmental-resource base. 

 

Professor Dasgupta has won numerous awards in economics and was named Knight Bachelor by Her Majesty Queen Elizabeth II in 2002 for services to economics. He has been a Fellow of the Econometric Society (1975); Fellow of the British Academy (FBA, 1989); Honorary Fellow of the London School of Economics (1995); Honorary Member of the American Economic Association (1997); Distinguished Fellow, CES, University of Munich (2011); and President of the Royal Economic Society (1998–2001), and the European Economic Association (1999), among others. He graduated in Physics from Hansraj College, Delhi University in 1962 and in Mathematics from Trinity College, Cambridge in 1965, and then did his PhD in Economics from Cambridge under James Mirrlees.  He has been awarded Doctorates Honoris Causa by Wageningen University (2000), Catholic University of Louvain (2007), Faculte Université Saint-Louis (2009), University of Bologna (2010), Tilburg University (2012), Harvard University (2013), and the University of York (2017).

 

Professor Partha Dasgupta has an old association with NCAER going back to his youth.  His father, Professor A K Dasgupta, himself an eminent economist, was the Deputy Director-General of NCAER during 1958-62 when Partha Dasgupta attended Delhi University.

 

About C D Deshmukh

Sir Chintaman Dwarakanath Deshmukh was the first Indian to be appointed Governor of the Reserve Bank of India in 1943, was part of the official Indian delegation to the 1944 Bretton Woods Conference that led to the creation of the World Bank and the International Monetary Fund, and served as Governor, RBI, until 1949. He served as the Union Finance Minister during 1950 to 1956 under Prime Minister Nehru, and was a founding member of NCAER’s first Governing Body in 1956. He later served as Chairman of the University Grants Commission and as the Vice-Chancellor of Delhi University, during which time he also founded the India International Centre. He was honoured by the President of India with the Padma Vibhushan in 1975. NCAER is privileged to honour the memory of C. D. Deshmukh as part of its more than 60-year legacy.

 

 

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