Hindu rate of growth

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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.

Hindu rate of growth is a controversial and derogatory expression^[1] used to refer to the low annual growth rate of the economy of India before 1991, which stagnated around 3.5% from 1950s to 1980s, while per capita income averaged 1.3%.^[2]

The slow India growth rate is better attributable to India's government regulatory policies (sarcastically called Licence Raj) rather than to a specific religion or to the attitude of the adherents of a particular religion.

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.

The economy of India has been growing at rate of around 6-8% since the economic liberalization begun in the 1990s. The reforms have been gradual, which was dubbed as the Hindu rate of reform in a paper by John Williamson and Roberto Zagha.^[3]

[edit] Term

The term was coined by Indian economist K. N. Raj.

It suggests that the low growth rate of India, a country with a high Hindu population was in a sharp contrast to high growth rates in other non-Hindu 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^[4].

As noted journalist Arun Shourie has pointed (see quote below) out the so called Hindu rate of growth was a result of socialist policies implemented by staunch secular governments and had nothing to do with 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^[5]

[edit] 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 bigger than India's
3. By 1990, South Korean per capita income was 20 times larger.^[8]

[edit] References

[edit] See also

• Economic liberalization in India
• Licence Raj
• Poverty in India
• Economic history of India

[edit] External links

• The power of ideas, The Hindu Business Line, June 10, 2004
• Hindu rate of growth - An explanation by Meghnad Desai