Understanding the "Hindu Rate of Growth" Controversy: PM Modi Challenges Economic Terminology

Prime Minister Narendra Modi firmly criticized attempts to associate India's historical economic underperformance with Hindu faith during his address at the 23rd Hindustan Times Leadership Summit on Friday. He described the "Hindu rate of growth" terminology as a deliberate mischaracterization designed to disparage Hindu culture.

The Prime Minister highlighted India's current global position, noting that while international fragmentation increases, India serves as a "bridge builder." He emphasized that India now occupies "a different league," powered by newfound confidence and resilience. "India writes growth narratives when global slowdown dominates discussions. When trust deficits plague the world, India stands as a pillar of reliability," he stated.

The controversial term "Hindu rate of growth" originated with economist Raj Krishna in 1978, describing India's sluggish economic expansion post-independence, particularly from the 1950s through 1980s, when GDP growth hovered around 3.5-4 percent annually.

This expression implied that slow growth resulted from a "Hindu way of life," suggesting cultural tendencies toward fatalism or contentment with minimal progress.

Economic experts have clarified that governmental policies, excessive state control, and restrictive regulations—not religious or cultural factors—were the actual growth impediments. Many consider the term inappropriate for linking religious identity with poor economic outcomes. The phrase became largely obsolete after India's 1990s economic liberalization triggered accelerated growth.

In 2023, former RBI Governor Raghuram Rajan sparked controversy by warning that India approached "dangerously close to the Hindu rate of growth" based on third-quarter GDP figures. His statement faced significant pushback from economists. Soumya Kanti Ghosh, State Bank of India's Chief Economist, called such assertions "ill-conceived, biased and premature" given comprehensive savings and investment data.

SBI's research division cautioned in a 2023 report that connecting recent growth deceleration to the historical "Hindu rate" neglects broader economic indicators including savings, investments, and structural factors.

That same year, BJP MP Sudhansu Trivedi, who holds a PhD from Dr APJ Abdul Kalam Technical University, introduced the alternative concept "Hindutva rate of growth" while discussing India's economic achievements over the preceding decade. He noted that India's 2023 GDP growth reached 6.3 percent according to IMF data, outperforming the US, UK, European nations, and Japan. Trivedi attributed this performance to Prime Minister Modi's governance and development-oriented expenditure policies benefiting disadvantaged populations.

Trivedi connected this economic transformation to Dharmic philosophy, citing a Sanskrit verse: "Dhan wohi sukh ka karak hota hain jo dharma ke marg se vyay hota hai," meaning "Only money spent in accordance with Dharma brings happiness." This perspective, he argued, fundamentally differs from the historical "Hindu rate of growth" concept.