Context:

Recently, Prime Minister Modi criticized the term Hindu growth rate during a conference, saying it was a deliberate misconception aimed at denigrating the Hindu way of life. It is an unfair label linking economic stagnation to religion or culture.

Definition of Hindu Rate of Growth:

• • Term coined by economist Raj Krishna in 1978.
  • Refers to India’s low GDP growth rate (~3.5%) over a long period post-independence (1950-80).
  • Named “Hindu” as a cultural metaphor, not religious; intended to highlight the persistence of slow growth despite political changes, wars, famines, and other crises.

Economists point out the real reasons was:

·         Heavy state control (License Raj)

·         Restrictive economic policies

·         Bureaucratic hurdles

Post-1991 liberalisation invalidated the relevance of the term.

Economic Growth after Independence:

1.      1950-1964 (Nehru Era):

·        GDP growth: 4.1%, per capita GDP: 1.9%.

·        Higher than China’s 2.9% in the same period; below South Korea’s 6.1%.

·        Population growth accelerated from 0.8% (colonial era) to 2%.

·        Adjusted for lower population growth, per capita income growth could have exceeded 3%, surpassing US and UK rates (1820–1992).

2.      1956–1975

·        Average annual GDP growth: 3.4%, roughly matching the Hindu rate.

3.     1975–1991

·        Average GDP growth: 5.6–5.8%, exceeding the Hindu rate well before 1991 reforms.

·        Economic turnaround credited to:

• • • Policy reforms under Indira Gandhi (post-Emergency)
    • Further reforms under Rajiv Gandhi
    • Capacity-building in key sectors: metallurgical, mechanical, chemical, power, and transport

4.     Post-1991 Liberalisation

·        Liberalisation accelerated growth further, but India’s growth momentum had already begun in the 1980s.

When did India surpass the Hindu Rate of Growth?

According to Baldev Raj Nayar (2006):

o    India surpassed the Hindu rate well before 1991 liberalisation.

o    1976–2006: GDP averaged 5.6%, first phase of liberalisation during Emergency.

o    Growth acceleration credited to within-system reforms in the 1980s, capacity-building, and policy tweaks.

Conclusion:

The term "Hindu rate of growth" was an economic metaphor coined in 1978 by economist Raj Krishna to describe India's slow GDP growth rate (approximately 3.5%). This was primarily due to economic policies such as the License Raj, and not due to religion or culture. Prime Minister Narendra Modi recently criticized the term, calling it a deliberate distortion used to malign the Hindu way of life, which unfairly links economic stagnation to religion or culture.