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    Question

    In the pre-1991 Indian economy, the “Hindu rate of

    growth” primarily reflected:
    A A fiscal policy focused on austerity Correct Answer Incorrect Answer
    B Rapid industrialization under the Mahalanobis model Correct Answer Incorrect Answer
    C Chronic inefficiencies due to import substitution and heavy regulation Correct Answer Incorrect Answer
    D Excessive dependence on foreign capital inflows Correct Answer Incorrect Answer
    E Large agricultural surpluses depressing prices Correct Answer Incorrect Answer

    Solution

    • The term “Hindu rate of growth” (coined by Raj Krishna) referred to low GDP growth of about 3.5% from the 1950s-80s. • Causes included license-permit-quota controls, protectionism, and state-led capital allocation that discouraged productivity and competition. • Liberalization in the 1990s broke this structural stagnation.

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