Hindu Rate of Growth: A concept that has lost its meaning and why it needs to be junked

India is on a path of decolonisation under the Narendra Modi government.

(Sanghnomics is a weekly column that tracks down and demystifies the economic world view of Rashtriya Swayamsevak Sangh (RSS) and organisations inspired by its ideology.)

With the Indian economy consistently performing well over the last decade and India becoming the fifth largest economy within a short span of the last 10-years, time has come to challenge the term ‘Hindu rate of growth’.

Hindu Rate of Growth: Marxist Maxim 

This term was coined by Marxist economist Raj Krishna in 1978 to denote the slow pace of growth of the Indian economy from the 1950s onwards. The Indian economy grew during the first three decades at a growth rate of less than four percent and Raj Krishna defined it as ‘Hindu rate of growth’. This notorious and misleading maxim is still used widely by economists and students of economics are made to study it all over the country.

Coinage of this mischievous phrase was a deliberate attempt by a Marxist economist to categorise Hindu society as historically laggard in the sphere of economic activities. This term is a stigma and it must be done away with as India is on a path of decolonisation under the Narendra Modi government.

Raj Krishna was part of that dominant clique of Marxist economists who blamed Hindus for all that was wrong with the Indian economy.  He was a faculty at Delhi School of Economics in Delhi University and his writings continue to be a part of the curriculum for economics courses in India’s leading educational institutions. He was also a member of the Finance Commission and played an important role in drafting several chapters of the sixth five-year plan. The five-year plans were themselves a legacy of the development model followed by the Communist Soviet Union and adopted by the Congress Party in India.

Raj Krishna’s obsession about Marxism being the only plausible framework for India can be gauged as he analysed the role of ideology in economic policy of India (KRISHNA, RAJ. “Ideology and Economic Policy.” Indian Economic Review, vol. 23, no. 1, 1988, pp. 1–26.), “The foremost logical weakness of the Fabian-Nehruvian system was failure to visualise the real character of the State as it was likely to evolve in different societies. In order to analyse this failure, we must turn to the Marxist tradition, for it is only in this tradition that the class character of the State in different stages of the economic transition receives systematic attention. We owe to this tradition the basic truth that in every stage of the transition the State apparatus operates objectively so as to benefit different social classes in proportion to their relative strength.”

He added, “It needs to be emphasized that it is not the promised but the actual objective distribution of the benefit of State power that is important for identifying its character, because the actual distribution can and does differ radically from the promised distribution. Also, the focus must be on the actual distribution regardless of the process (dynastic, dictatorial or democratic) whereby the ruling group or coalition is selected.”

His preference for a Marxist framework was evident as he wrote, “Though Marx and Engels used a pure two-class model, with a property-owning class and a property-less class, for analysing the dynamics of mature capitalism, they were quite eclectic in distinguishing as many classes as necessary to analyse particular historical situations.”

Theory of Class Struggle

Raj Krishna batted for the theory of class struggle and wanted that to happen in India through creation of trade unions in every sector. His diagnosis and prescription for the Indian economy was, “The benefits of unionism remain confined to a tiny minority of the labour force. In similar circumstances in China, Mao extended the principle of unionism, restricted by Russian Marxist theory to the industrial proletariat, to cover the peasantry. In India too it is urgently necessary to expand the trade union movement to cover the entire unorganised working force, comprising landless workers, small farmers and unorganised non-farm workers. Since these are not homogeneous groups, class specific unionisation of each subclass will be necessary. In fact, within each subclass, separate unions of women workers will also be necessary because historically male dominated unions have neglected the interests of women workers. In a society with chronic surplus labour the principle of unionism needs to cover the unemployed and underemployed as well as the employed.”

“The novelty of such unionism will not only be that it will be universal, but that the struggle of each class union will be against its own specific antagonistic class, damaging or neglecting its interests,” he added.

Hindu concept of growth 

There are hundreds of texts describing the Hindu concept of growth, wealth, abundance and distribution of economic benefits but we have hardly paid any attention to them. To give our readers a small glimpse, Rishi Bharatrihari wrote, 2000 years ago, in ‘Neeti Shatak’ underlining the importance of creating wealth through economic growth for all Hindus. He said (The Satakas of Bhartrihari, Trubner & Co London, 1886), “Our noble birth may go to the lower regions; our virtues may perish; our moral character may fall as if from a lofty mountain ; our family may be consumed by fire ; a thunderbolt may strike our might as it were an enemy : let us keep our money, for without this all the collected virtues are but a heap of grass.”

And then he mentions how wealth should be used, “Giving, consuming, and loss, are the three ways by which wealth is diminished. The man who neither gives nor spends has yet the third way open to him.”

There are several such treatises, sutras and economic theories in ancient Hindu texts which talk at length about creating a sustainable economic model based on rapid economic growth generating wealth and distributing it equitably. The role of the state has also been well defined in this context.

Even then if we continue to denote the lack of economic activity as ‘Hindu rate of growth’, nothing could be farther away from the truth. It is time to either junk this phrase or change its connotation to imply a rapid rate of economic growth that leads to development of all sections of society.

Earlier Sanghnomics columns can be read here.