Unpacking the Fallacy of the ‘Hindu Rate of Growth’

Using the term ‘Hindu Rate of Growth’ is not only derogatory and offensive, but it also shows a lack of understanding and respect for India’s rich cultural heritage and economic accomplishments

The term “Hindu Rate of Growth” was coined in the 1980s to describe India’s slow economic growth rate. It was based on an incorrect understanding of Hinduism and India, and it is not an accurate way to describe India’s economic performance. In this article, we will look at the term’s origins, implications, and why it should not be used today.

The term “Hindu Rate of Growth” was coined by Raj Krishna, an Indian economist. He used the term to describe India’s slow rate of economic growth, which he blamed on a number of factors such as the country’s socialist policies, poor infrastructure, and corruption. The term was intended to be a polemic device, drawing attention to India’s poor economic performance and encouraging policymakers to act to address the country’s economic problems. Krishna’s interpretation of the “Hindu way of life” has been criticized for oversimplification and stereotyping an entire population.

The book “India: Retrospect and Prospect” by Raj Krishna is a critical overview of the Indian economy in the post-independence period. Let us look at what he wrote about the economy in his book instead of using a controversial term. Each section of the book focuses on a different aspect of India’s economic development.

•  The book’s first section provides a historical overview of the Indian economy, tracing its evolution from pre- colonial times to the present. Krishna contends that a variety of factors, including colonialism, government policies, and cultural attitudes, have hampered India’s economic growth.
• The second section of the book examines the Indian economy’s structure, with a focus on agriculture, industry, and the service sector. Krishna contends that India’s economic structure is inefficient and unbalanced, which has contributed to the country’s slow economic growth rate.
• The third section of the book focuses on the role of the state in the Indian economy, with a particular emphasis on government policies and institutions. Krishna contends that government policies have been a major impediment to economic growth, and that in order to achieve sustained economic growth, India must adopt more market-oriented policies.
• The fourth and final section of the book examines the prospects for the Indian economy in the future. Krishna contends that India has the potential for rapid economic growth, but that doing so will necessitate significant reforms in a variety of areas, including government policies, institutions, and cultural attitudes.

“India: Retrospect and Prospect” is a seminal work in the field of Indian economics, and it is still a valuable resource for scholars, policymakers, and anyone interested in India’s economic development. People who use the term “Hindu Rate of Growth” have ignored the contents of Raj Krishna’s study.

For a variety of reasons, the term “Hindu Rate of Growth” is deeply counterproductive. First, it perpetuates a negative and one-dimensional view of Hinduism and India. Hinduism is diverse and complex and it cannot be reduced to a single set of characteristics. Similarly, India is a vast and diverse country with a complex history and a variety of cultural, linguistic, and regional identities. Using a term like “Hindu Rate of Growth” to describe India’s economic performance fails to capture the complexity and diversity of the country and its people.

Is it true that India has always been a poor and underdeveloped country with slow economic growth? The answer is unequivocally no! Prior to the arrival of foreign powers, India was a thriving economic powerhouse with a rich and diverse economy based on agriculture, manufacturing, and trade.

Historians and scholars have documented invading forces looting and destroying India’s wealth and resources, particularly during the Delhi Sultanate and Mughal Empire periods. Plundering temples, sacking cities, and imposing heavy taxes and tributes on the citizenry were all commonplace during this period. The Islamic conquests had far-reaching consequences for India’s economy, society, and culture. What’s more, the invasions’ social and religious upheavals had a significant impact on Indian society, leading to the forced conversion of some Hindus to Islam and the destruction of many Hindu and Buddhist temples. Although logistical constraints posed some difficulties for the Islamic invaders, it is important to recognize the significant economic and social repercussion of the invasions on India.

A British economist who specialized in studying historical economic data, Angus Maddison, has documented India’s economic history over the last two millennia. Until the 17th century, India was one of the richest and most prosperous countries in the world, according to his research. India’s share of global income peaked at 24.4% in 1700, which is higher than its current share.

With the arrival of colonial powers in the 18th century, India’s economy began to deteriorate further. The British East India Company established a trade monopoly in India, resulting in the destruction of indigenous industries and the exploitation of the country’s resources. The British also imposed a variety of economic policies aimed at benefiting Britain at the expense of India, such as high tariffs on Indian goods and trade restrictions.

Many scholars and economists argue that India’s post-independence economic challenges were caused by a complex set of historical, political, and economic factors, including government policies, institutional inefficiencies, and external factors such as international trade and global economic conditions.

Without a doubt, India’s post-independence policy paralysis and Nehruvian socialism contributed to the country’s slow economic growth. Nehruvian socialism was characterized by central planning, industrial policy, and state control over key economic sectors such as steel, coal, and transportation. These policies were designed to increase self-sufficiency and decrease reliance on foreign countries, but they resulted in inefficiencies, corruption, and a lack of competition.

There is no denying that Late P V Narasimha Rao’s 1992 liberalization policies, dubbed the “New Economic Policy,” benefited India. These policies contributed to the opening of the Indian economy, increased competition, and attracted foreign investment. They also led to significant advances in infrastructure, technology, and productivity. The 1992 liberalization and free trade policies did not benefit India significantly, and the liberal policies failed during the Pandemic.

During the period 2004-2014, India’s growth was driven more by asset inflation than by real sector growth. During this time, the prices of assets such as gold, land, and stocks rose significantly, contributing to the growth of the overall GDP. This growth, however, was not necessarily long-term sustainable, and there were concerns about the quality of growth and its impact on the broader economy. Those who study economic history refer to this period as “India’s Lost Decade” in its rise to global leadership. Let me remind you that during this time, Sri. Raghuram Rajan was heavily involved in economic policy advice and implementation!

India is now one of the world’s fastest growing major economies. With the growth of its IT sector, the rise of new industries and startups, and the expansion of its middle class in recent decades, the country has made significant strides. However, the country continues to face numerous economic challenges, such as high levels of inequality, poverty, and corruption.

Despite the many positive developments in India’s economy today, some people still use the term “Hindu Rate of Growth” to describe the country’s economic performance. This is a highly derogatory and inaccurate term that should never be used in any serious discussion of India’s economy.

The Indian economy has come a long way since the “Raghuram Rajan Rate of Growth.” Despite numerous obstacles, such as foreign invasions, policy paralysis, and economic downturns, India has persevered and emerged as a global economic powerhouse. While derogatory and misleading terms like “Hindu Rate of Growth” may persist, it is important to remember that they are based on ignorance and bias. The story of India’s growth is a testament to its people’s resilience and ingenuity, and it is up to us to celebrate and build on that legacy. As India strives for economic leadership on the global stage, let us abandon outdated notions in favor of a future that is inclusive, innovative, and prosperous for all.

Raj Krishna coined the term “Hindu Rate of Growth” as a propagandistic device to draw attention to India’s slow growth rate at the time. Today, however, some people use the term improperly or maliciously to disparage India and its people. It is critical to understand the context in which the term was used in order to avoid misusing it today. Rather than using derogatory terminology that only serves to divide us, we should focus on finding constructive solutions to promote India’s economic growth and development.