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 liberalisations of 1991, which stagnated around 3.5% from 1950s to 1980s, while per capita income growth averaged 1.3%. 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 economy of India accelerated and has grown at a rate of around 6–9% since economic liberalisation began in the 1990s.
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. 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".

Term

The term was coined by Indian economist Raj Krishna. 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.

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.
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%.
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.

    Criticism

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