Hindu rate of growth

The Gross Domestic Product Per Capita (GDP Per Capita) Growth Rate: India had previously experienced periods of robust economic growth even prior to the 1991 reforms. Moreover, the growth rate has demonstrated a slowing trend since 2016, prior to the onset of the COVID-19 pandemic.

The term "Hindu rate of growth" was coined by the Indian economist Raj Krishna in 1978. It refers to the annual growth rate of India's economy before the economic reforms of 1991, which averaged 4% from the 1950s to the 1980s.[1] Advocates of liberalisation often use this term. However, modern neoliberal economists criticise the term, as they believe that the low growth rate was caused by the failed five-year plan model and economic mismanagement. Dirigiste policies often include indicative planning, state-directed investment, and the use of market instruments (taxes and subsidies) to incentivize market entities to fulfill state economic objectives. Eighth Five Year Plan (1992 - 1997) was for managing the transition from a centrally planned economy to market led economy through indicative planning.

India was a leader in the non-aligned movement and sought to maintain a neutral stance during the Cold War. As a result, it did not receive the same level of aid from the US and other Western countries as countries that were more closely aligned with the West.[2][3] Economists critical of neoliberalism criticised the term as oversimplifying the complex economic, political, and social factors that contribute to a country's rate of growth, as well as the use of GDP Growth Rate as a metric for "progress".[4]

The economy of India accelerated and has grown at a rate of around 3–9% since economic liberalisation began in the 1990s with the exception of 2020.[5][6] Recent research has shown that India's growth rate had begun to attain higher growth since Indira Gandhi's time in 1980s due to economic reforms, with average growth rate of 5.8% in 1981 to 1991.[7] GDP growth rate has however slowed since 2016.[8] In March 2023, Raghuram Rajan said that the growth rate in recent times was dangerously close to India's old Hindu rate of growth.[7]

The word "Hindu" in the term was used by some early economists like Vikas Mishra to imply that the Hindu outlook of fatalism and contentedness was responsible for the slow growth.[9][10] Later liberal economists reject this connection and instead attribute the rate to the Indian government's protectionist and interventionist policies, rather than to a specific religion or to the attitude of some of the adherents of a particular religion. Accordingly, some neoliberal writers instead use the term "Nehruvian rate of growth".[11]

  1. ^ Das, Gourab (2023-03-07). "Sure-footed India's economic potential outpaces 'ill-conceived' notion of Hindu rate of growth". The Economic Times.
  2. ^ "Net official development assistance received (current US$) - India | Data". data.worldbank.org. Retrieved 2023-01-05.
  3. ^ "South Korea and Taiwan's institutional capacity helped U.S. aid to be used well after 1945, while South Vietnam's French colonial legacy hindered development. | USAPP". 21 October 2014. Retrieved 2023-01-05.
  4. ^ Cite error: The named reference :4 was invoked but never defined (see the help page).
  5. ^ Subramanian, Arvind (2018-02-08). "India's Path From Crony Socialism to Stigmatized Capitalism | by Arvind Subramanian". Project Syndicate. Retrieved 2019-04-23.
  6. ^ Derviş, Kemal (2018-02-12). "The Future of Economic Convergence | by Kemal Derviş". Project Syndicate. Retrieved 2019-04-23.
  7. ^ a b Cite error: The named reference :3 was invoked but never defined (see the help page).
  8. ^ "GDP growth (annual %) - India | Data". data.worldbank.org. Retrieved 2022-01-31.
  9. ^ Mishra, V. (1962). Hinduism and economic growth. Indian Branch, Oxford University Press.
  10. ^ "The Hindutva Rate of Growth". casstt.com. Retrieved 2022-01-31.
  11. ^ Chakravarty, Manas (November 17, 2014). "The Nehruvian rate of growth". Livemint. Retrieved May 2, 2017.