Hindu rate of growth

Compare India (orange) with South Korea (yellow). Both started from about the same income level in 1950. The graph shows GDP per capita of South Asian economies and South Korea as a percent of the American GDP per capita.

The Hindu rate of growth is a term referring to the low annual growth rate of the planned economy of India before the liberalisations of 1991, which stagnated around 3.5% from 1950s to 1980s, while per capita income growth averaged 1.3%.[1]

The term contrasts with South Korea's Miracle on the Han River and the Taiwan Miracle. While these Asian Tigers had similar income level as India in the 1950s, exponential economic growth since then has transformed them into developed countries today.

Many claim that the economy of India accelerated and grew at a rate of around 6-9% since economic liberalisation began in the 1990s.

The word "Hindu" in the term was used by some early economists to imply that the Hindu outlook of fatalism and contentedness was responsible for the slow growth. Later economists reject this connection and instead attribute the rate to the Government of India's protectionist and interventionist policies (see Licence Raj), rather than to a specific religion or to the attitude of the adherents of a particular religion. Accordingly, some writers instead use the term "Nehruvian socialism".[2]

Term

The term was coined by Indian economist Raj Krishna.[3][4] It suggests that the low growth rate of India, a country with mostly Hindu population was in a sharp contrast to high growth rates in other Asian countries, especially the East Asian Tigers, which were also newly independent. This meaning of the term, popularised by Robert McNamara, was used disparagingly and has connotations that refer to the supposed Hindu outlook of fatalism and contentedness.[5]

Comparison

In 1947, the average annual income in India was $439, compared with $619 for China, $770 for South Korea, and $936 for Taiwan. By 1999, the numbers were $1,818; $3,259; $13,317; and $15,720.[6]

India's growth rate was low by standards of developing countries. At the same time, Pakistan grew by 5%, Indonesia by 6%, Thailand by 7%, Taiwan by 8% and South Korea by 9%.[7]

The comparison with South Korea was stark:

  1. In 1947, South Korean per capita income was less than 2 times bigger than India's.
  2. By 1960, South Korean per capita income was 4 times larger than India's
  3. By 1990, South Korean per capita income was 20 times larger.[8]

Criticism

According to the world economic history published by Angus Maddison in his study of the world economy (THE WORLD ECONOMY: A MILLENNIAL PERSPECTIVE[9]) over the past millennium, the data reflects that India and China consistently constituted more than 60% of world's GDP. A closer look suggests that Hindu-dominant India was world's biggest economy until the late 1700s. It is only after colonialism that the Indian GDP started declining and consequently being referred as "Hindu Rate of Growth". Hence, the "Hindu rate of Growth" has nothing to do with Hinduism and is widely recognized as a term coined for gaining academic popularity.

Noted politician and journalist Arun Shourie pointed out that the "Hindu rate of growth" was a result of socialist policies implemented by staunch secular governments, not Hinduism:

because of those very socialist policies that their kind had swallowed and imposed on the country, our growth was held down to 3-4 per cent, it was dubbed — with much glee — as ‘the Hindu rate of growth’.
— Arun Shourie[10]

With the rise of social media in India, a parallel term now being used is the Nehruvian rate of growth,[2] as India's first prime minister, Jawaharlal Nehru, laid the foundations of Nehruvian socialism which is held responsible for the low growth. Nehru himself was a secular.

See also

References

  1. ↑ Redefining The Hindu Rate Of Growth. The Financial Express
  2. 1 2 Chakravarty, Manas (November 17, 2014). "The Nehruvian rate of growth". Livemint. Retrieved May 2, 2017.
  3. ↑ Indian Economy: Dutt & Sundaram
  4. ↑ http://planningcommission.gov.in/aboutus/speech/spemsa/msa033.pdf
  5. ↑ Tripathi, Salil (June 13, 2006). "Escaping the 'Hindu rate of growth'". The Guardian. London. Retrieved May 4, 2010.
  6. ↑ Meghnad Desai (2003). "India and China: An essay in comparative political economy" (PDF). IMF.
  7. ↑ "Industry passing through phase of transition". The Tribune India.
  8. ↑ "India: the economy". BBC. February 12, 1998.
  9. ↑ "The World Economy: Historical Statistics". Wikipedia. 2016-09-22.
  10. ↑
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