Be it opposition to demonetisation or the his criticism of populist nationalism, former RBI governor Raghuram Rajan isn't one to mince his words. He recently raised eyebrows after walking with opposition leader Rahul Gandhi during his nationwide rally, and shared his two cents on the economy. Now Rajan's comments warning that India is reverting to the "Hindu Rate of Growth", have come under the spotlight.
Did Rajan come up with the term?
He used the term , while speaking on the recent slowdown in India's GDP growth rate to 4.4 per cent in the October-December quarter. Rajan cited rising inflation, higher interest rates, and an imminent global slowdown, to express concerns about growth momentum in the near future.
The Hindu growth rate he referred to, was first coined by Indian economist Raj Krishna, who also taught at the Delhi School of Economics. Let's take a look at what he meant by that.
What does it mean?
Krishna who studied in Delhi and Chicago, observed that India's GDP growth hovered around 4 per cent for four decades from the 1950s, through the 1980s. Changing governments, political developments and wars didn't affect this growth in any way, which convinced him that it was an inherently cultural development. Hence Krishna chose to call the stagnant character of the GDP a Hindu Rate of Growth.
Rajan argues that since RBI has warned of a further drop to 4.2 per cent in GDP growth for the next quarter, India is falling back towards the Hindu Growth Rate.
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