Hindu rate of growth

2021-06-18T17:59:20Z

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{{Use Indian English|date=July 2015}}
{{short description|Low annual growth rate of the Indian economy before the economic reforms of 1991}}
[[File:Per capita GDP of South Asian economies & SKorea (1950-1995).svg|350px|thumb|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 Asia]]n economies and South Korea as a percent of the [[United States|American]] GDP per capita.]]
The '''Hindu rate of growth''' is a term referring to the low annual [[Economic growth|growth rate]] of the [[economy of India]] before the economic reforms of 1991, which stagnated around 3.5% from 1950s to 1980s, while per capita income growth averaged around 1.3%.<ref>[http://www.financialexpress.com/news/redefining-the-hindu-rate-of-growth/104268/ Redefining The Hindu Rate Of Growth]. [[The Financial Express (India)|The Financial Express]]</ref> The usage of the term has been criticized by modern economists due to fact that cause of low growth was failed socialist model and economic mismanagement .<ref>{{Cite web|date=2013-02-08|title=The nonsense about the “Hindu Rate of Growth”..|url=https://timesofindia.indiatimes.com/blogs/reclaiming-india/the-nonsense-about-the-hindu-rate-of-growth/|access-date=2021-06-18|website=Times of India Blog|language=en-US}}</ref>The term contrasts with [[South Korea]]'s [[Miracle on the Han River]] and the [[Taiwan Miracle]]. While these [[Four Asian Tigers|Asian Tigers]] had similar income level as India in the 1950s, exponential economic growth since then has transformed them into [[developed countries]] today. The Indian economy of this period is characterised as [[Dirigisme|Dirigism]].<ref name=":12">{{Citation|last=Chandrasekhar|first=C. P.|title=From Dirigisme to Neoliberalism: Aspects of the Political Economy of the Transition in India|date=2012|url=https://eprints.soas.ac.uk/29360/1/10731455.pdf|work=Developmental Politics in Transition: The Neoliberal Era and Beyond|pages=140–165|editor-last=Kyung-Sup|editor-first=Chang|series=International Political Economy Series|place=London|publisher=Palgrave Macmillan UK|language=en|doi=10.1057/9781137028303_8|isbn=978-1-137-02830-3|access-date=2020-09-04|editor2-last=Fine|editor2-first=Ben|editor3-last=Weiss|editor3-first=Linda}}</ref><ref name=":2">{{Cite web|last=Mazumdar|first=Surajit|date=2012|title=Industrialization, Dirigisme and Capitalists: Indian Big Business from Independence to Liberalization|url=https://mpra.ub.uni-muenchen.de/93158/|access-date=2020-09-04|website=mpra.ub.uni-muenchen.de|language=en}}</ref>

The economy of India accelerated and has grown at a rate of around 6–9% since [[Economic liberalisation in India|economic liberalisation began in the 1990s]].<ref>{{Cite web|url=https://www.project-syndicate.org/commentary/india-cronyism-to-capitalism-by-arvind-subramanian-2018-02|title=India's Path From Crony Socialism to Stigmatized Capitalism {{!}} by Arvind Subramanian|last=Subramanian|first=Arvind|date=2018-02-08|website=Project Syndicate|language=en|access-date=2019-04-23}}</ref><ref>{{Cite web|url=https://www.project-syndicate.org/commentary/emerging-countries-economic-convergence-by-kemal-dervis-2018-02|title=The Future of Economic Convergence {{!}} by Kemal Derviş|last=Derviş|first=Kemal|date=2018-02-12|website=Project Syndicate|language=en|access-date=2019-04-23}}</ref>

The word "Hindu" in the term was used by some early economists like [[Vikas Mishra (economist)|Vikas Mishra]] to imply that the [[Hinduism|Hindu]] outlook of fatalism and contentedness was responsible for the slow growth.<ref>Mishra, V. (1962). Hinduism and economic growth. Indian Branch, Oxford University Press.</ref><ref>[https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3514337 The Hindutva Rate of Growth.] Development Economics: Macroeconomic Issues in Developing Economies eJournal. Social Science Research Network (SSRN). Accessed 1 April 2020.</ref> Later economists reject this connection and instead attribute the rate to the Indian government's [[License Raj|protectionist and interventionist policies]], 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]]".<ref name="livemint.com">{{cite web| url=http://www.livemint.com/Money/76l5Klit1s3nWARdEbD4LI/The-Nehruvian-rate-of-growth.html | work=Livemint | title=The Nehruvian rate of growth | first=Manas | last=Chakravarty | date=November 17, 2014 | access-date=May 2, 2017}}</ref>

==Term==
The term was coined by [[India]]n [[economist]] [[Raj Krishna]].<ref>Indian Economy: Dutt & Sundaram</ref><ref>http://planningcommission.gov.in/aboutus/speech/spemsa/msa033.pdf</ref> 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 [[Asia]]n countries, especially the [[East Asian Tigers]], which were also newly independent. This meaning of the term, popularised by [[Robert McNamara]],{{Citation needed|date=May 2017}} was used disparagingly and has connotations that refer to the supposed Hindu outlook of [[fatalism]] and contentedness.<ref name="Tripathi">{{cite news| url=https://www.theguardian.com/commentisfree/2006/jun/13/escapingthehindurateofgro | work=The Guardian | location=London | title=Escaping the 'Hindu rate of growth' | first=Salil | last=Tripathi | date=June 13, 2006 | access-date=May 4, 2010}}</ref>

==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.<ref name="desai">{{cite web|url=http://www.imf.org/external/np/apd/seminars/2003/newdelhi/desai.pdf|title=India and China: An essay in comparative political economy|author=Meghnad Desai|publisher=IMF|year=2003}}</ref>

{| class="wikitable" |
|-
! Year !! India !! China !! South Korea !! Taiwan
|-
| 1947 || $439 || $619 || $770 || $936
|-
| 1999 || $1,818 || $3,259 || $13,317 || $15,720
|}

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%.<ref>{{cite web|url=http://www.tribuneindia.com/50yrs/kapur.htm|title=Industry passing through phase of transition|publisher=The Tribune India}}</ref>

The comparison with South Korea was stark:
#In 1947, South Korean per capita income was less than 2 times bigger than India's.
#By 1960, South Korean per capita income was 4 times larger than India's
#By 1990, South Korean per capita income was 20 times larger.<ref name="bbc1998">{{cite news|url=http://news.bbc.co.uk/2/hi/south_asia/55427.stm|title=India: the economy|work=BBC|date=February 12, 1998}}</ref>

== Criticism ==

Noted politician and journalist [[Arun Shourie]] pointed out that the "Hindu rate of growth" was a result of [[socialism|socialist policies]] implemented by governments:
{{quote|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’.<ref>{{cite web |url=http://www.indianexpress.com/story/254969.html |title=Archived copy |access-date=2008-01-02 |url-status=dead |archive-url=https://web.archive.org/web/20071230190927/http://www.indianexpress.com/story/254969.html |archive-date=2007-12-30 }}</ref>}}

According to economist [[Sanjeev Sanyal]], the term was an attempt to suggest that "it was not Nehruvian economic policies that had failed India, it was India’s cultural moorings that had failed Nehru." He linked it with the ideological domination of the left, backed by the socialist regime, in post-Independence India.<ref>{{cite book |author1=Madhusudan, Harsh |author2=Mantri, Rajeev |title=A New Idea of India: Individual Rights in a Civilisational State |publisher=Westland |chapter=Foreword |others=Sanjeev Sanyal (''Foreword'')}}</ref>

== See also ==
* [[Economic history of India]]
* [[Economic liberalisation in India]]
* [[Licence Raj]]
* [[Poverty in India]]
* ''[[The World Economy: Historical Statistics]]''

==References==
{{Reflist}}

== External links ==
* [http://www.thehindubusinessline.com/2004/06/10/stories/2004061000141000.htm ''The power of ideas'', The Hindu Business Line, June 10, 2004]
* [https://www.pbs.org/wgbh/commandingheights/shared/minitextlo/int_meghnaddesai.html Hindu rate of growth] – An explanation by [[Meghnad Desai]]
* [http://theunbrokenwindow.com/Development/MADDISON%20The%20World%20Economy--A%20Millennial.pdf The World Economy: A Millennial Perspective]

{{DEFAULTSORT:Hindu Rate Of Growth}}
[[Category:Economic history of India (1947–present)]]
[[Category:Economic growth]]

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Hindu rate of growth