Having become accustomed to finding myself often in disagreement with the prime minister’s pronouncements on the economy, I was pleasantly surprised to hear him say something that resonated with me. After first alleging in his R.P. Goenka Lecture held earlier this year that there exists a colonial mindset – gulami ki mansikta – in India, he has gone on to suggest, at the Hindustan Times Leadership Summit, that the expression “Hindu rate of growth” is an example of it. I am in full agreement this view, even though the fact of the expression being reflective of a colonial attitude is far less interesting than why it has had purchase. That a construct so shallow in content survived for as long as it did reflects exactly what Foucault had asserted, that knowledge, i.e., what is accepted as “truth”, is congealed power. Let me explain.The Western nations are indisputably the winners of the Cold War, the battle for the minds of the world’s population on the question of whether capitalism is better than Soviet-style socialism, which had lasted for close to half a century. There is no debate over who won this battle, culminating in the 1990s with the collapse of the former Soviet Union. But well before this event the same battle was alive in India, though in a milder form. Indian economists were divided along ideological lines, with groups aligned with either state intervention or free markets.As in all intellectual battles there was no middle ground. That successful economies had all along, and the West at that very moment, combined the state and the market was not acknowledged. Actually, India, too was a mixed economy, but this did not deter those who favoured less government to attribute growth of the economy to the curtailment of markets alone. The latter certainly was part of the policy regime of the time but that cannot be treated as its defining characteristic. For instance, it can be said equally strongly that there had not been then a policy of developing the capabilities of the population, the majority of which was illiterate and in poor health.It was in this context in the late seventies that the economist Raj Krishna is said to have coined the expression “Hindu rate of growth”. I have found it impossible to locate the exact reference to this statement, but go by the fact that a student of his has recently vouched for its provenance. I take it as the authoritative interpretation of what could have been meant by it. Thus, Ajay Chhibber has stated that “…Raj Krishna, who was a staunch critic (of the Nehruvian economic model) famously coined the phrase the “Hindu rate of growth” for India’s niggardly economic performance from 1950 to 1980, and was a severe critic of the licence raj.” Clearly Raj Krishna found the economic performance of the time less than satisfactory but the choice of the descriptor ties the outcome down to India’s heritage, which by implication was incapable of generating a growth less meagre.Why should an economist critical of an economic model resort to a cultural explanation? He should have been able to explain the economic outcome by Nehru’s economic policies alone. And, if culture was so controlling a factor, the so-called Nehruvian economic model would be irrelevant to an assessment of the growth outcome. Despite its ambiguity, however, the epithet “Hindu rate of growth” came to stay in the power centres of the day, notably the World Bank and the International Monetary Fund, and therefore in the corridors of power in India, irrespective of the political party governing.Erasing the transformationsThe circumscribed description of economic performance over three decades – implying a steady, dull progress – has meant that the dynamics of the period were erased. The dynamics matter both from the point of view of understanding which economic polices worked and which did not, and are relevant to any assessment that may be undertaken. They also serve as crucial lessons in how not to manage an economy. When approaching the period 1950-80, it is important to first see it was not one of steady growth. Actually, there was a growth cycle. The true picture is that of a growth acceleration in the fifties, followed by a deceleration in the mid-60s and an acceleration again from 1979. I narrate each of them in turn.The acceleration of growth in the 1950s, which lasted 15 years, is missed when the analysis ignores growth in the colonial period. As national income data is available from the year 1900 on the sample could easily have been extended backwards. We would then see a surge in growth in the 1950s, which led the economic historian S. Sivasubramonian to remark that the recovery India made after colonial rule was “swift, smooth and remarkable”. This gives an altogether different picture from the one conveyed by “Hindu rate of growth”. In the late ’50s, assessing the progress made, the planner P.C. Mahalanobis was to observe that while it cannot be guaranteed that India will not have a stormy future, it can be said with confidence that the economy is not going to go back to its previous, depressed state. India’s economy had sloughed off its colonial cloak. This could only have been due to the policies adopted in early independent India. It was the most noteworthy transformation of the first phase of the growth cycle during 1950-80. Another one was industrialisation. Planning aimed to industrialise India, and it did result in a manufacturing base far wider than that which existed in 1947. Manufacturing’s share of the economy, how industrialisation is understood, rose. For perspective, it is worth noting that the trade and industry reforms of 1991 have not been able to raise the share of manufacturing appreciably, nor has ‘Make in India’ since 2014 achieved this.After a good start, however, disaster was to strike soon for India’s economy, first in the form of the border war in 1962 and two consecutive years of drought in the mid-60s. This triggered the second phase of the growth cycle I have referred to, a deceleration that lasted a decade. The downslide was also aided by Indira Gandhi’s leftward lurch, which led to an immediate decline in corporate investment. But in the midst of this decline in the rate of growth, something quite extraordinary happened. The poverty rate began a secular fall, as shown by the accomplished team of poverty researchers, namely, Martin Ravallion, Gaurav Datt and Gargi Murgai, then based at the World Bank.There is no puzzle in this. Though the aggregate rate of growth declined after 1964, agriculture began to grow faster around this period due to the Green Revolution. As India’s population was overwhelmingly rural, its standard of living rose. India achieved foodgrains sufficiency in this period, a significant achievement after intermittent famine over close to two centuries. The lesson from this period is that higher growth of the economy is not needed for reducing poverty; it is the content of the growth that matters. Another way of seeing this is that it is not always the level of income but its distribution that matters for poverty. In the 1960s, faster growth of agriculture, the sector where the largest number of the poor were, meant that the growth was better distributed even as it was being generated, with no major redistribution needed through policy. We see in this that it is not enough to know the rate of growth alone to assess economic performance. The beginning of the decline in poverty, though delayed, is the second transformation that took place during 1950-80.The third phase of the growth cycle is the acceleration of growth, estimated to have commenced in 1979. It was the year in which the expression “Hindu rate of growth” appeared. Of course, the econometric method that helps us establish this quite conclusively today was not available at the time, but the rising annual growth rates from the mid-70s on were there for all to see. It was spotted by K.N. Raj in an article in Seminar in December 1979. Raj was cautious in saying that it may be too early to state whether the rising annual growth rates from 1975-76, when nearly 10% growth was registered, had raised the trend, but he suggested that this may have taken place. This was prescient, and serves an example of how much can be understood by using simple yet robust methods of data analysis. It is a challenge to the idea of an eternal “Hindu” rate of growth that it accelerated without any change in the “Nehruvian economic model”.This development need not be surprising at all. Mausumi Das, M. Parameswaran and I have written down a model of growth that mimics such an outcome and generated empirical evidence showing that it is a plausible explanation of the acceleration observed. As those who may be interested may read this work, I shall not dwell any further on it, except to say that our argument is that the Green Revolution could have acted as positive shock that propelled a growth process prone to cumulative causation. As for the reduction in poverty, a virtuous cycle is likely to have been initiated. Faster agricultural growth reduced poverty in the late 60s, and growth in the rest of the economy took off in the 70s. The lesson is that there is positive feedback between economic growth and poverty reduction.I have drawn attention to three historic transformations that took place during 1950-80. To draw a broad brush over them by insisting that the growth rate was low and unchanging is either sleight of hand or a poor reading of the data. Staying with the growth rate, though, its is worth remarking that per capita income grew 19 times faster in the Nehru era than in the final half century of the Raj, despite a greater than doubling of the annual rate of growth of the population. Also, during this period, India grew faster than China, which is the right comparator.Ignoring the history of India (or Britain, for that matter)I now address in particular the issue of the “low” growth rate in early independent India. In the first Lal Bahadur Shastri Lectures titled ‘India, Pakistan and China: Economic Growth and Outlook’ delivered in Patna in 1967, K.N. Raj, using such data as was available at the time, showed that there was little difference in the growth performance of India and Pakistan since their independence. This remarkable finding is not to be taken as a comforting confirmation that India and Pakistan are sisters under the skin, but as pointing to a deeper truth regarding the possibilities of growth in the Indian sub-continent after colonialism had finally ended.Pakistan and India had adopted different economic policies after their independence. The former gave a freer hand to the private sector and embraced the west politically, while India saw substantial state intervention in the economy and was actively non-aligned during the Cold War. Outside the ahistorical frame of “the Hindu rate of growth” it is not difficult to explain the seemingly puzzling history of two economies with varying policy regimes but similar growth outcomes. India and Pakistan were part of British India, which had been subjected to surplus extraction. Utsa Patnaik’s estimate is that under colonialism 45 trillion dollars flowed out of undivided India to the British economy. It would be surprising if by 1947 India’s economy was any more than a living carcass.When growth is endogenous it is tied to its past i.e., history matters. Now, an economy has memory, as it were, and a long period of stagnation can leave it depressed, unless it is shocked out this “low level equilibrium”. In the context under consideration, growth need not have resumed automatically in undivided India after 180 years of drain. This phenomenon, termed ‘hysteresis’, is a suitable candidate for understanding why India and Pakistan had similar rates of growth for a couple of decades after 1947, even though they had distinctly different policy regimes. This remarkable piece of history, unearthed by Raj, also suggests that the rate of growth in the countries of the post-colonial sub-continent could not but have been constrained due to the extraction they were subjected to. Culture would not have had anything to do with it.There were many flaws in India’s economic policy in its early years but there were successes too. The Hindu rate of growth has nothing to say about either. The biggest failing of the economic model of the time was the failure to initiate a programme for advancing human development in a country that had an abysmally low level of it. Advancing development in this authentic sense would not only have been more faithful to the goal of the Indian national movement but it would also have resulted higher income through a more productive population.What the psychiatrist saidIf the construct “Hindu rate of growth” is an empty economic box, how could it have travelled at all, it may be asked. It travelled because it served the interests of the Western political establishment during the Cold War, which as I have already stated was essentially an argument over which economic system is superior. Its intent was to shame Indians into accepting an economic regime that grants unrestrained freedom to the private sector. In his speech at the Hindustan Times Summit, the prime minister had queried, somewhat emotionally, how Indian economists could have adopted the expression ‘Hindu rate of growth” to describe the predicament of a people struggling to make their way in the world. He had missed the performativity inherent in its use, which was not concerned with either achieving a credible description of reality or ensuring a better life for Indians.However, Modi was not entirely wrong in espying gulami ki mansikta in the shibboleth beloved of a small group of Indian economists trained in the west. A clue to what lies beneath this mindset is found in the work of Franz Fanon, the West Indian psychiatrist, who proposed that mental slavery leads colonised elites to hide their “black skin (behind) white masks”. Only a slight leap of imagination is needed to see that the speech act “Hindu rate of growth” may be described as “white faces speaking through brown masks”. The irony is that many of those who uttered it had shared Modi’s economic ideology, and the prime minister is himself prone to projecting the unequalising growth of its economy over all other aspects of life in India.Pulapre Balakrishnan is Honorary Visiting Professor, Centre for Development Studies, Thiruvananthapuram.