Hindu rate of growth
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%.
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 word "Hindu" in the term was used by some early economists like Vikas Mishra (economist) 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".
The term was coined by Indian economist Raj Krishna. 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.
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.
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.
According to the world economic history published by Angus Maddison in his study of the world economy 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 India was among the world's biggest economies until the late 1700s. It is only after colonialism that the Indian GDP started declining.
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
- Economic history of India
- Economic liberalisation in India
- Licence Raj
- Poverty in India
- The World Economy: Historical Statistics
- Redefining The Hindu Rate Of Growth. The Financial Express
- Subramanian, Arvind (2018-02-08). "India's Path From Crony Socialism to Stigmatized Capitalism | by Arvind Subramanian". Project Syndicate. Retrieved 2019-04-23.
- Derviş, Kemal (2018-02-12). "The Future of Economic Convergence | by Kemal Derviş". Project Syndicate. Retrieved 2019-04-23.
- Chakravarty, Manas (November 17, 2014). "The Nehruvian rate of growth". Livemint. Retrieved May 2, 2017.
- Indian Economy: Dutt & Sundaram
- Tripathi, Salil (June 13, 2006). "Escaping the 'Hindu rate of growth'". The Guardian. London. Retrieved May 4, 2010.
- Meghnad Desai (2003). "India and China: An essay in comparative political economy" (PDF). IMF.
- "Industry passing through phase of transition". The Tribune India.
- "India: the economy". BBC. February 12, 1998.
- "Archived copy". Archived from the original on 2007-12-30. Retrieved 2008-01-02.CS1 maint: Archived copy as title (link)