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The nonsense about the “Hindu Rate of Growth”..

9 February 2013 354 views 3 Comments

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

Interesting read: “hindu rate of growth” is racist by Rajeev Srinivasan.  This post was cross-posted over at ToI blogs.

3 Comments »

  • 1. Rakesh Bhatt said:

    Thanks a Trillion for clearing this mess of miss-information/mischievousness through your column/Blog.

  • 2. Bharati said:

    Our land was known as “soney ki chidiya”. Invaders came repeatedly to loot our wealth – and we replenished it, and they came again to loot. Till the British came, we had almost a quarter-share of the global economy. JL Nehru in “The Discovery of India” identified the missionary-colonial (British!) destruction of our manufacturing economy as “the real, the fundamental, cause of the appalling poverty of the Indian people”. Yet, a few decades later, we’re no longer a basket case. This is not because of our neo-missionary-colonial governments. It is because of “Indian models of business, economy and management” (see the book of this title by P Kanagasabapathi). It is because of the real Hindu rate of growth.

  • 3. S said:

    I think , the continued use of this phrase in India is due to the huge inferiority complex created by the british-christian- English education system. The fact that this education system was literally forced by the christian missionary schools is largely forgotten today. There are certain morons going around here announcing that all Indians were in favour of such system, when this was not the case.

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