Partha Dasgupta panel shuns GDP based model of growth

NEW DELHI: A government-appointed panel headed by environmental economist ParthaDasgupta has suggested a broader measure of economic progress than gross domestic product by taking into account the value of natural resources, human capital and infrastructure.


There is need for a gentler way of understanding investment to assess the change in per capita wealth, Dasgupta said, so that “leaving a forest unmolested or providing food to the undernourished is counted as an investment”.

The panel, which submitted its report on Friday, has provided a roadmap with timelines for a system of evaluating economic progress that includes the value of the stock of country’s natural, human and physical assets.

The GDP-based measure of economic growth, according to the panel, suffers from “extreme narrowness” as it does not consider the value of a country’s natural resources, skilled workforce and infrastructure.

Prime Minister Manmohan Singh, while addressing the International Workshop on Green National Accounting for India on Friday, acknowledged the need for a broader measure.

“Often economic policies designed to promote growth have been implemented without considering their full environmental consequences, presumably on the assumption that these consequences would either take care of themselves or could be dealt with separately,” Singh said, adding that there was evidence to suggest that such policies might actually result in net decrease in human well-being.

The prime minister said he hoped that “the ministry of statistics in consultation with the Planning Commission and the other ministries concerned will take a leading role in implementing the recommendations of the expert group”.

The panel, a brainchild of former environment minister Jairam Ramesh, was set up in August 2011 with an eye on Green GDP by 2015 and tasked with developing a framework for green national accounts, identifying data required for implementing the recommended framework and suggesting ways to address the data gaps.

The new measure, if adopted, will ensure a departure from the mindset that views environmental protection as inimical to economic growth. Dasgupta, who is considered among the leading experts in the subject, makes it clear in the report that a broader measure based on wealth, however desirable, is not easy to formulate.

Some of the appropriate data is hard to collect, or has not been collected because there was no requirement earlier. Assigning a monetary value on everything from built infrastructure to air quality is another challenge.