Hindu Rate of Growth:
#GS III #Indian Economy
Topic Indian Economy
- Raghuram Rajan, a former governor of the Reserve Bank, has warned that, in light of restrained private sector investment, high interest rates, and a slowing global economy, India is “dangerously near” to attaining the Hindu pace of growth.
- According to Mr. Rajan, the National Statistics Office’s (NSO) most recent estimate of national income, which was published last month, showed a sequential slowing in the quarterly gain.
Do we once more experience “Hindu” growth?
- India’s 4.8% GDP growth in the first quarter of 2013 was lacklustre, casting doubt on the possibility of double-digit growth. Also, it has provided a glimpse into the contentious concept of Hindu rate of progress.
- Indian economist Professor Rajkrishna created the phrase “Hindu rate of growth” in 1978 to describe the slow growth and provide a defence in light of socialistic economic principles. The phrase was created to reflect India’s happiness at the nation’s moderate post-independence growth rate. It was said that Indian fatalism may be the cause of policymakers’ failure to look for measures to strengthen the economy while other nations cried out for faster growth.
- Some early economists adopted the term “Hindu,” and they believed that the Hindus’ serenity and fatalism were the cause of the slow progress. Yet, as numerous economists afterwards noted, the so-called Hindu rate of progress had nothing to do with Hinduism and was instead the outcome of socialist measures taken at the time by vehemently secular governments.
- The 1982 publication of GDP figures by Belgian economic historian Paul Bairoch challenges the proverb and casts doubt on this comfort. According to this research, India accounted for about a quarter of the global economy in 1750, and British economist Angus Maddisson later corroborated this. India’s contribution decreased as colonisation got underway, falling from 20% in 1800 to just 3% in 1880 in a short period of time.
When is it appropriate to label a nation’s development as Hindu?
- Modest growth rates do not adequately represent Hindu growth rates. Even though it is not an economic recession, a persistently low growth rate is insufficient to be recognised as the Hindu rate of growth. The phrase also suggests a low per capita GDP when population growth is taken into consideration, in addition to being slow and lasting a long time.
- For instance, in the 1980s, India’s population growth rate was above 2% per year, but the Hindu pace of growth was defined by the meagre 1% per-capita GDP growth rate and 3.5% GDP growth.
- Stronger per capita income growth may occur given the current yearly population growth rate of 1.4%. The term “Hindu rate of growth” may have been applicable at one point in time, but it cannot be used to describe India’s growth rate as a whole. Even if we tried, it would be difficult to go back to this era in a free market that is accessible to everyone. The phrase may have lost its meaning within a few years of being created when we entered the neo-Hindu cycle of expansion and got more in tune with the world economy.