Hindu rate of growth

The Hindu rate of growth is a term referring to the low annual growth rate of the economy of India before the economic reforms of 1991, which stagnated around 3.5% from 1950s to 1980s, while per capita income growth averaged around 1.3%.[1] 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 Indian economy of this period is characterised as Dirigism.[2][3]

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.

The economy of India accelerated and has grown at a rate of around 6–9% since economic liberalisation began in the 1990s.[4][5]

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.[6][7] Later 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 the adherents of a particular religion. Accordingly, some writers instead use the term "Nehruvian socialism".[8]

Term

The term was coined by Indian economist Raj Krishna.[9][10] 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.[11]

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.[12]

YearIndiaChinaSouth KoreaTaiwan
1947$439$619$770$936
1999$1,818$3,259$13,317$15,720

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%.[13]

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 larger than India's
  3. By 1990, South Korean per capita income was 20 times larger.[14]

Criticism

Noted politician and journalist Arun Shourie pointed out that the "Hindu rate of growth" was a result of socialist policies implemented by governments:

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’.[15]

According to economist Sanjeev Sanyal, the term was an attempt to suggest that "it was not Nehruvian economic policies that had failed India, it was India’s cultural moorings that had failed Nehru." He linked it with the ideological domination of the left, backed by the socialist regime, in post-Independence India.[16]

See also

References
  1. Redefining The Hindu Rate Of Growth. The Financial Express
  2. Chandrasekhar, C. P. (2012), Kyung-Sup, Chang; Fine, Ben; Weiss, Linda (eds.), "From Dirigisme to Neoliberalism: Aspects of the Political Economy of the Transition in India" (PDF), Developmental Politics in Transition: The Neoliberal Era and Beyond, International Political Economy Series, London: Palgrave Macmillan UK, pp. 140–165, doi:10.1057/9781137028303_8, ISBN 978-1-137-02830-3, retrieved 2020-09-04
  3. Mazumdar, Surajit (2012). "Industrialization, Dirigisme and Capitalists: Indian Big Business from Independence to Liberalization". mpra.ub.uni-muenchen.de. Retrieved 2020-09-04.
  4. Subramanian, Arvind (2018-02-08). "India's Path From Crony Socialism to Stigmatized Capitalism | by Arvind Subramanian". Project Syndicate. Retrieved 2019-04-23.
  5. Derviş, Kemal (2018-02-12). "The Future of Economic Convergence | by Kemal Derviş". Project Syndicate. Retrieved 2019-04-23.
  6. Mishra, V. (1962). Hinduism and economic growth. Indian Branch, Oxford University Press.
  7. The Hindutva Rate of Growth. Development Economics: Macroeconomic Issues in Developing Economies eJournal. Social Science Research Network (SSRN). Accessed 1 April 2020.
  8. Chakravarty, Manas (November 17, 2014). "The Nehruvian rate of growth". Livemint. Retrieved May 2, 2017.
  9. Indian Economy: Dutt & Sundaram
  10. http://planningcommission.gov.in/aboutus/speech/spemsa/msa033.pdf
  11. Tripathi, Salil (June 13, 2006). "Escaping the 'Hindu rate of growth'". The Guardian. London. Retrieved May 4, 2010.
  12. Meghnad Desai (2003). "India and China: An essay in comparative political economy" (PDF). IMF.
  13. "Industry passing through phase of transition". The Tribune India.
  14. "India: the economy". BBC. February 12, 1998.
  15. "Archived copy". Archived from the original on 2007-12-30. Retrieved 2008-01-02.CS1 maint: archived copy as title (link)
  16. Madhusudan, Harsh; Mantri, Rajeev. "Foreword". A New Idea of India: Individual Rights in a Civilisational State. Sanjeev Sanyal (Foreword). Westland.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.