Sustainability of Hinduism and the Hindu Rate of Growth as the Global Growth Rate

1
Sustainability of Hinduism and the Hindu Rate of
Growth as the Global Growth Rate

• By Surendra K. Kaushik, Professor of Finance,
  Lubin School of Business, Pace University
  (skaushik_at_pace.edu) Founder of Mrs. Helena
  Kaushik Women's College in India
  (www.helenakaushik.org)

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Abstract

• This paper argues that in the long run GDP
  annual growth rates will most likely regress
• back to the trend line in the US and India in
  the 3 to 4 percent range. There is a
• remarkable stability and similarity of growth
  rates in the two countries over long
• periods. In India it has been derogatorily
  called the Hindu Rate of Growth. Presumably
• higher rates are associated with other religions
  and value systems. The evidence,
• however, finds the same low rate in the US.
  Growth rates in other advanced countries and
  Europe are about the same as well. Higher rates
  would be desirable and possible
• with new human capital and technologies. The ten
  percent a year rate in China from
• 1980 to 2010 is unlikely in the future. The Hindu
  Rate of Growth which is the same as
• the US rate of growth is most likely to be
  sustainable in the future as in the past. The
  stability is explained in terms of cultural
  characteristics specifically associated with
• Vedic Hinduism. United States shares some
  characteristics of an open global culture
• with India. Therefore what is sustainable are the
  common US and India rates of global
• growth where Indias spirituality and yoga are
  taking root in the US and American
• scientific research and innovation are enriching
  Indian trading and entrepreneurship
• into industrial and materialistic society.

3
Sustainability of Hindu Rate of Growth

• The Hindu Rate of Growth (HRG) is a controversial
  and derogatory expression used to refer to the
  low annual growth rate of the socialist economy
  of India before 1991, which was around 3.5
  percent from 1950s to 1980s, while per capita
  income growth averaged 1.3 (Chart 3).The average
  US nominal GDP growth rate at that time was 6.2
  percent while the real GDP growth rate, at 2005
  prices, was 3.4 percent a year from 1930 to 2010
  (Chart 1). Indias growth rate for the most
  recent thirty year short-term period from 1980 to
  2010 by comparison is 6.11 percent a year (Chart
  2). Perhaps it is not a coincidence that the US
  rate of growth over the first two and a quarter
  centuries since 1776 is essentially the same. It
  is a remarkable similarity of growth rates.

4
United States Growth Rate
5
Indias Growth Rate
6
United States Growth Rate
7
Indias Recent Growth Rate
8
Hindu Value Drivers of Hindu Growth Rate

• There are a number of empirical truths about
  Hinduism that demonstrate a steady and
  sustainable rate of growth. Some of these are
  (i) global perspective in thinking (ii) open and
  welcoming migratory culture, (iii) ageless view
  of time and space, (iv) inquisitive and open mind
  and knowledge-based enterprises, (v) an
  accepting, assimilating and tolerant society,
  (vi) reciprocity and exchange based on
  specialization, (vii) expanding view of self,
  (viii) acceptance of controlled aggression (ix)
  greater importance on knowledge based enterprises
  and (x) satisfaction from balance between the
  spiritual, mental and physical lives.

9
Globalization and Growth Rate

• The paradigm of openness inside the economy and
  in its trade, investments, and engagement with
  the rest of the world is building external
  confidence in the Indian economy (Denison 1967,
  Kaushik 1996). India is marching forward
  consistent with its long and successful history
  with the underpinnings provided by the Vedic
  system. Economic liberalization, including
  industrial deregulation, privatization of
  state-owned enterprises and reduced controls on
  foreign trade and investment that began in the
  1991 (Kaushik and Silk 1994, Kaushik 1997, and
  Kaushik and Santicchia 1999) has helped
  accelerate the country's growth in the short term
  to more than 6 per year since 1980 (Chart 2).

10
U.S. Long-term Growth Rate

• Consistent with the analysis of the
  sustainability of growth at 3 to 4 percent a
  year, or the Hindu Rate of Growth presented
  above, the U.S. economy grew by an average of
  3.8 from 1946 to 1973, while real median
  household income surged 55 (or 1.6 a year). The
  economy since 1973, however, has been
  characterized by both slower growth (averaging
  2.7) and nearly stagnant living standards, with
  household incomes increasing by 10, or only 0.3
  annually.

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Recent Growth in India and China

• Recent Growth in China and India

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Conclusion

• Building up of human capital and operation of the
  market forces with support from social, political
  and business institutions are the key
  characteristics developed for economic progress
  in India in its long and sustainable journey as
  part of the global family.
• Our discussion should not be interpreted to imply
  that high rates of growth currently achieved in
  India are undesirable or should be reduced. A 6
  percent average growth rate for the next two to
  three decades is entirely possible towards a 4
  percent rate for yet a longer period of several
  decades as argued in this paper.
• The long-term key driver of Indias continuity
  and sustainability is the Vedic foundation on
  which its value systems and culture are based.
  The United States has many of the same cultural
  characteristics of openness, assimilation, broad
  view, and long-term perspective in addition to
  the focus on science and education, innovation
  and entrepreneurship. The proximity of long-term
  growth rates in India and the US is impressive.