Dr P Subramanyachary

Recently, while speaking on the occasion of the NDA government completing 12 years in office and recalling his record as India’s longest-serving continuously elected Prime Minister, Narendra Modi criticized the historical term “Hindu Rate of Growth.”He argued that the phrase unfairly linked India’s economic sluggishness to Hindu culture.

According to him, the term was used to conceal the failures of past economic policies and that the situation should instead be viewed as the result of the governance and policy decisions of previous governments. Modi suggested that the period of slow economic growth should have been called the “Congress Rate of Growth” rather than the “Hindu Rate of Growth.”

Modi stated that the decades of low growth following independence pushed India into poverty, despair, and a sense of inferiority. He also questioned why the country’s current rapid economic growth is not similarly associated with Hindu culture. According to him, this issue reflects the persistence of a colonial mindset in India.He called for greater confidence in India’s civilization and cultural heritage. Modi also compared the pre-1991 period with the country’s current economic performance. He remarked that economic reforms, innovation, infrastructure development, and policy continuity have transformed India into one of the world’s fastest-growing major economies.

In fact, the term “Hindu Rate of Growth” was coined by economist Raj Krishna in 1978. It was used to describe India’s relatively slow economic growth from the 1950s through the 1980s. During that period, the country’s Gross Domestic Product (GDP) grew at an average annual rate of only about 3–4 per cent. Although the name appears to be related to Hinduism, the term has no connection to the Hindu religion. It was simply used to describe the low growth rates that persisted after independence.

According to economists, the main reasons for this slow growth included the License Raj system, extensive government control over industries, restrictions on the private sector, high import tariffs, limits on foreign investment, low productivity, and economic policies that reduced competition. At the same time, rapid population growth meant that increases in per capita income remained very modest.

In 1991, economic liberalisation reforms were introduced under the leadership of then Prime Minister P. V. Narasimha Rao and Finance Minister Manmohan Singh. These reforms reduced industrial licensing requirements, opened certain sectors to foreign investment, and lowered trade barriers. Participation by the private sector was also encouraged. As a result, India achieved much higher rates of economic growth in the following decades.

Referring to the term “Hindu Rate of Growth,” Prime Minister Narendra Modi emphasized that India should not return to the highly regulated economic policies that existed before 1991. Instead, he stated that reforms, entrepreneurship, and investment are essential for sustaining high economic growth.

However, supporters of the concept of the “Hindu Rate of Growth” argue that it highlightsthe shortcomings of India’s economic policies before 1991. They contend that factors such as excessive government control, industrial licensing requirements, and trade restrictions reduced productivity and investment. They believe that the term helps explain why economic growth accelerated after the economic liberalization reforms.Critics, however, argue that the term is misleading and unfair because it appears to associate slow economic growth with Hinduism, even though the causes of the slowdown were economic and political rather than religious.

They emphasize that, despite the relatively low growth rates, India made significant progress during that period in areas such as industrialization, education, and self-sufficiency.Critics also point out that the phrase may reinforce misconceptions and stereotypes about Hinduism.

Furthermore, some economists argue that colonial legacies, widespread poverty, low savings rates, and global economic conditions also played important roles in limiting economic growth.Therefore, while the term has been useful in historically describing India’s economic performance, debate continues regarding its wording and implications.

Many economists believe that more neutral expressions such as “the low-growth period” or “the pre-liberalization growth era” would be more appropriate.They argue that the term “Hindu Rate of Growth” should no longer be used in the future. Replacing it with a more neutral term could promote inclusiveness and reduce the risk of cultural and religious misunderstandings.

(The writer is Professor, School of Commerce and Management, Mohan Babu University, Tirupati)