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Hindu rate of growth

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Compare India(orange) with South Korea (yellow). Both started from about the same income levelin 1950. The graph shows GDP per capita ofSouth Asian economies and South Korea as a percentof the American GDP per capita.

Hindu rate of growth is a controversial and derogatory expression used to refer to the low annualgrowth rate of the economy of India before 1991, which stagnated around 3.5% from 1950s to1980s, while per capita income averaged 1.3%

The slow India growth rate is better attributable to India's government regulatory policies(sarcastically called Licence Raj) rather than to a specific religion or to the attitude of the adherentsof a particular religion.

The term contrasts withSouth Korea's Miracle on the Han Riverand theTaiwan Miracle. Whilethese Asian Tigers had similar income level as India in the 1950s, exponential economic growthsince then has transformed them intodeveloped countries today.

The economy of India has been growing at rate of around 6-8% since the economic liberalizationbegun in the 1990s. The reforms have been gradual, which was dubbed as theHindu rate of reformin a paper by John Williamson and Roberto Zagha

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Term

The term was coined by IndianeconomistK. N. Raj.

It suggests that the low growth rate of India, a country with a high Hindupopulation was in a sharp

contrast to high growth rates in other non-Hindu Asian countries, especially theEast 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 fatalismand contentedness.

As noted journalistArun Shouriehas pointed (see quote below) out the so called Hindu rate ofgrowth was a result of socialist policies implemented by staunch secular governments and hadnothing to do withHinduism.

because of those very socialist policies that their kind had swallowed and imposed on the country, ourgrowth was held down to 3-4 per cent, it was dubbed with much glee as the Hindu rate of growth.

Arun Shourie

Comparison

In 1947, the average annual income in India was $439, compared with $619 for China, $770 forSouth Korea, and $936 for Taiwan. By 1999, the numbers were $1,818; $3,259; $13,317; and$15,720.

India's growth rate was low by standards of developing countries. At the same time,Pakistangrewby 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 bigger than India's3. By 1990, South Korean per capita income was 20 times large

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