Why India’s growing religiosity is an economic challenge
Growing religiosity may boost the tourism sector but may hurt the overall economy
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Over the past decade, the proportion of religious people has either declined or stagnated in most countries. India seems to have been an exception, according to data from the World Values Survey (WVS), the largest global repository of data on attitudes and beliefs of individuals across the world.
More than 90% of Indian respondents said religion was either ‘very important’ or ‘rather important’ in the latest round of the WVS (2010-14). As the chart below shows, apart from Kyrgyzstan, India is the only country where the proportion of people who considered religion to be an important part of their lives grew by more than 10 percentage points over the past decade.
The WVS data seems to complement data from studies conducted by Lokniti, a research programme at the Delhi-based Centre for Study of Developing Societies (CSDS), which also point to rising religiosity in the country.
While this may be good news for the tourism industry, it may not be great news for the Indian economy as a whole. The WVS data seems to suggest that rising religiosity is typically associated with poverty, not with prosperity.
As the charts below show, the influence of religion tends to be extremely intense in the poorer parts of the world and fairly mild in the richer parts of the world. The correlation between religiosity and per capita incomes is negative and significant, and holds even when one excludes smaller economies from the analysis.
With the level of religiosity breaching the 90% mark as per the latest WVS, India today has countries such as Zimbabwe, Pakistan, and Tunisia for company in the select club of highly religious nations.
Does the data suggest a causal link between religiosity and poverty?
Some economists have indeed argued in favour of such a link, highlighting the importance of religious pluralism and openness in driving innovation but according to others, the causal link may instead run the other way, with rising incomes reducing the import of religion in a society.
The German sociologist Max Weber famously argued that a ‘Protestant work ethic’ contributed to the rise of capitalism in the West but others have argued that the seeds of capitalism were sown even before the Protestant reformation. Besides, in most bastions of capitalism, religion declined in influence as capitalism began to grow.
To be sure, religion is far from being the sole determinant of prosperity in an economy. Nonetheless, the strong link between religiosity and poverty should make us worry about the growing religiosity in India.