The 8th NCAER C. D. Deshmukh Memorial Lecture 2020

India in a Changing World

by

David Lipton
First Deputy Managing Director, The International Monetary Fund

Dr David Lipton, First Deputy Managing Director of the International Monetary Fund delivered NCAER’s 8th C D Deshmukh Memorial Lecture. Held in NCAER’s new, world-class, T2 Conference Centre, the Lecture was attended by a distinguished audience including economists, civil servants, prominent media persons, industry analysts, and students.

Dr Shekhar Shah, Director-General of NCAER delivered the introductory remarks. Dr Lipton began his lecture by lauding Dr CD Deshmukh as a towering figure who, as RBI governor and later finance minister, had helped guide India’s economy through the immense challenges of independence. He also revealed that Dr Deshmukh holds a significant place in the annals of the IMF as a senior member of India’s delegation to the 1944 Bretton Woods Conference, which laid the foundations of the post-war economic order. In fact, John Maynard Keynes had actually recommended Dr Deshmukh’s name for running the IMF!

Dr Lipton then outlined the various challenges and uncertainties confronting the global economy, including most recently the spread of the coronavirus epidemic that has adversely affected global value chains. He cited ‘secular stagnation’ as a major policy problem across economies, which was being reflected in other challenges like anaemic productivity growth, falling inflation, and weakening global trade. Although these problems are the legacy of the global financial crisis, they are also the new normal in a maturing, globalised world characterised by ageing societies.

In his Lecture which can be viewed here, Dr Lipton asserted that if India can address these challenges, it could “help invigorate global growth, transform global patterns of trade, and spur investment and innovation.” He argued that with the right policies—and a supportive global environment—India could become a source of “secular dynamism,” which could become the needed counterweight to the secular stagnation of the advanced economies. Highlighting that India was till recently the fastest growing large economy in the world, Dr Lipton hailed it for its potential to play an increasingly important role in the global economy, fuelled by its young and growing population and reservoir of untapped demand

Dr Lipton also touched upon the waning effect of the IT Revolution and the possible impact of innovations like big data and artificial intelligence on productivity. Reiterating India’s crucial role in this exercise, Dr Lipton pointed out that India had always worked hard to tackle its home-grown challenges of development, most significantly through reforms to produce high growth and lift millions out of poverty. Moreover, as one of the largest exporters of information, computer and telecommunications services, India has also shown the light to other countries, paving the modern path to development. Advising it to optimise its demographic dividend, Dr Lipton also averred that India needs to focus on key areas such as reviving the agricultural sector, stimulating consumer demand, especially in rural areas, accelerating export growth, and countering rising unemployment. He expressed concern at the decline in labour force participation, particularly among India women, who could prove to be a source of economic dynamism if provided the right opportunities.

Dr Lipton rounded off his lecture by recommending greater participation of India in global value chains to emerge as a hub for international manufacturing companies, and the need for other critical measures like infrastructural investments, and reduction of tariff and non-tariff barriers to enable the emergence of larger and more productive manufacturers.

About David Lipton 

David Lipton is the First Deputy Managing Director of the IMF, appointed initially in 2011 and then reappointed for a second term in 2016. Prior to the Fund, he was Special Assistant to President Obama, and served as Senior Director for International Economic Affairs with the National Economic Council and National Security Council at the White House. He was earlier a Managing Director at Citi and its Head of Country Risk Management.

Dr Lipton served in the Treasury Department of the Clinton administration from 1993 to 1998; as Under Secretary for International Affairs, and before that as Assistant Secretary, he helped lead the Treasury’s response to the Asian financial crisis and its effort to modernise the international financial architecture. He was earlier a fellow at the Woodrow Wilson International Center in Washington, DC. From 1989 to 1992 he served as economic adviser to the governments of Russia, Poland, and Slovenia. For the first eight years of his professional career he was on the staff of the IMF, working on economic stabilisation in emerging market and low-income countries.

He earned his PhD and MA from Harvard University and a BA from Wesleyan University

About C D Deshmukh

NCAER instituted the C. D. Deshmukh Memorial Lecture in 2013 in memory of one of India’s most eminent early economists and a founding father of NCAER. 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 of RBI until 1949. He served as the Union Finance Minister during 1950 to 1956 and was a founding member of NCAER’s first Governing Body in 1956. He later served as Chairman of the University Grants Commission and 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 own legacy.