HINDU RATE OF GROWTH
WHY IN NEWS?
- Recently Former Reserve Bank of India (RBI) governor Raghuram Rajan sounded a note of caution, saying India was “dangerously close” to the ‘Hindu rate of growth’.
WHAT IS HINDU RATE OF GROWTH?
- The term was first used by the late economist Raj Krishna in 1978 to refer to the low rate of economic growth in the pre-liberalisation era.
- He used it to denote the around 4 per cent growth in GDP from the 1950s to the 1980s.
- It must be noted that the slow growth rate is called the Hindu rate of growth only if it is persistent and is accompanied by low per-capita GDP, with population growth factored in.
WHY THE TERM HINDU?
- According to reports, several economists believed that the term “Hindu” was used to link the belief in Karma and Bhagya with the slow growth.
- Later liberal economists rejected this connection and instead attributed the low growth rate to the then governments’ protectionist and interventionist policies.
WHY FORMER RBI GOVERNOR CAUTIONED?
- Raghuram Rajan’s remark came after National Statistical Office (NSO) released its report last month.
FINDINGS OF NSO REPORT :
- The report showed a sequential slowdown in the latest estimate of national income.
- The country’s GDP growth was seen to slow down to 4.4% in the third quarter (October-December) against the 6.3% in the second quarter (July-September).
- Even the current CEA in the latest Economic Survey had agreed that India’s potential economic growth rate had fallen to 6% even before the onset of the Covid pandemic.
ABOUT National Statistical Office (NSO) :
- The government created an overarching body NSO by merging the National Sample Survey Office (NSSO) and Central Statistical Office (CSO).
- It was first envisaged by Rangarajan Commission to implement and maintain statistical standards.
- It would be headed by Secretary (Ministry of Statistics and Programme Implementation).
- It is the statistical wing of the Ministry of Statistics and Programme Implementation (MoSPI).
- NSO acts as the nodal agency for planned development of the statistical system in the country.
- Its famous releases include Index of Industrial Production (IIP).
Syllabus : PRELIMS, GS-3 INDIAN ECONOMY