The nonsense about the “Hindu Rate of Growth”..
This is a short, hurried and somewhat angry post. A few hours back, I was alerted by Gopi-ji to a couple of headlines from two well-known newspapers. The first from Mail Today read “Back to Hindu Growth Rate“. The second ironically, was from “The Hindu” and asked the question “On a ‘Hindu’ growth path?”
Neither article cared to explain what exactly was the “Hindu Growth Rate” – or why was a growth rate ever labelled with the name of a faith.
So for my young friends who may be reading this, here is a brief history of the “Hindu Rate of Growth”. The “Hindu” rate of growth was a term used disparagingly to indicate the low growth rate of the Indian economy for more than 3 decades, between the 50s to the 80s. The average growth of GDP during this period was around 3.5% while per capital income grew by a mere 1.3%.
What was the reason behind this poor growth? It was Nehru’s misguided belief in socialism and his blind faith in central planning. As my friend and economist Sanjeev Sabhlok has pointed out in his blunt, thought-provoking book “Breaking Free of Nehru”, the responsibility for this well below average growth (and the lost decades) must lie solely at Nehru’s door-step (Note the extraordinary progress made during the same period by countries like Korea and later, China).
You may still be wondering why call it “Hindu” rate of growth? The term was coined by Prof Raj Krishna who argued at one of his lectures in the late 70s that “..no matter what happens to the economy the trend growth rate in India will be 3.5%”. It was later used by a few economists to link the low growth rate of the 50s-80s period to Hindu beliefs of “Karma” & “Bhagya”.
This was not just grossly misleading and inaccurate but also deeply ironical since Hinduism is one belief system that celebrates wealth – and considers it one of the four “Purushaartha”s. In fact, it can be argued that Hinduism is strongly anti-socialist and in harmony with economic freedoms necessary for prosperity of any society. Of course I need not remind anyone of the phrase “Shubh Laabh”.
The points I mentioned above are well-known and hardly disputed. Yet, the term continues to be used (see e.g. this article and this) – either out of ignorance about its origin or due to the sheer force of a bad habit. High time, I think, to set the record straight. High time, I think to mention in no uncertain terms who exactly was responsible for the policies that led to this growth rate. High time, I think, to stop this pussyfooting. Jai Hind, Jai Bharat! Comments and thoughts welcome as always