Former Governor of the Reserve Bank of India, Raghuram Rajan has warned India of being dangerously close to the Hindu rate of growth. He has cited the subdued investment in the private sector and high-interest rates to be the reason for the slow global growth rate.
What Is Hindu Growth Of Rate?
Hindu Growth of Rate describes low Indian economic growth rates from the 1950s to the 1980s. The term was coined in 1978 by a prominent Indian economist, Raj Krishna.
The term was first used to refer to the low rate of economic growth in India, in the pre-liberalisation era. Raj Krishna, who was a professor at the Delhi School of Economics, explained the rate against the backdrop of socialist economic policies.
Several factors are to be considered while gauging the Hindu rate of growth. It is accompanied by low per-capita GDP and the population of the country. One of the prominent examples of the Hindu growth rate is the time before the liberalisation in the late 1980s. The Indian annual population growth rate was over 2 percent, GDP was at 1 percent, and the per-capita GDP growth rate was at 3.5 percent.
Raghuram Rajan’s statement on the Hindu growth rate comes against the backdrop of the slow nature of the current fiscal in the third quarter. During that period, the GDP rate slowed down from 6.3 percent to 4.4 percent.
“Of course, the optimists will point to the upward revisions in past GDP numbers, but I am worried about the sequential slowdown. With the private sector unwilling to invest, the RBI still hiking rates, and global growth likely to slow later in the year, I am not sure where we find additional growth momentum,” said Rajan in an email interview with the PTI.
Raghuram Rajan is derisively calling Indian growth as Hindu rate of growth. Would he dare to call for all other countries that are growing lower than India or not growing at all as a Christian or Muslim rate of growth? Good that Modi got rid of Raghuram Rajan.
— D.Muthukrishnan (@dmuthuk) March 6, 2023
Why is it called the Hindu Growth Rate?
Reports suggest that a few economists believed that the term Hindu was linked to Karma and Bhagya with slow growth. The notion was later rejected by several liberal economists who attributed the low growth rate to the then government’s protectionist and interventionist policies.
According to reports, several economists believed that the term “Hindu” was used to link the belief in Karma and Bhagya with the slow growth. However, later liberal economists and historians like Paul Bairoch rejected this connection and instead attributed the low growth rate to the then governments’ protectionist and interventionist policies.