It’s been all over the news for the past week that India is experiencing a so-called “Hindu Rate of Growth”. The term was first coined by the economist Raj Krishna to refer to a low annual growth rate in India’s economy. This was used to describe the period between the 50s and the 80s when India was growing slowly compared to other developing countries in the region at a growth rate of 4%.
Following liberalization, India’s economy opened and unprecedented growth began under the Narsimha and Manmohan-led changes. There was at least 3-9% growth in this period.
But why “Hindu Rate of Growth”? Krishna used this to indicate that just as Hindus are simple and frugal with their lifestyle and are satisfied with it, India’s economy is also simple and does not focus on capitalist principles. Neo-liberal writers use the term “Nehruvian Rate of Growth” instead of this.
In early March 2023, the former RBI governor Raghuram Rajan said that the growth rate currently is dangerously close to India’s old Hindu Rate of Growth. In the third quarter (October to December) of the current FY, the GDP slowed to 4.4% from 6.3% in the second quarter and 13.2% in the first. He is worried about a sequential slowdown.
However, many have countered Raghuram’s statement saying that he is merely contemptuous of Hindus and is basing his statement on just one-quarter’s reports. Some have also called his remarks “premature”. Also, quarterly growth numbers should be avoided for any serious interpretation.
At this point, there’s not much to worry about, and just one quarter’s reports do not represent the complete FY’s growth. Given the global circumstances at the moment, this decrement was inevitable.