The Congress party has leveled sharp criticism at the Indian government, accusing it of ignoring the significant decline in real wages that has severely impacted the nation’s workforce. Congress General Secretary Jairam Ramesh stated that a combination of slow wage growth and relentless inflation has led to an unprecedented decline in real incomes, leaving many Indian households in a state of financial distress. The party’s criticism comes as part of a broader discussion on the economic policies of the current administration, particularly its handling of wage-related issues, which have far-reaching implications for the country’s overall economic health.
Overview of Wage Stagnation and Economic Distress
In recent years, wages in India have increasingly become a focal point of economic discussions. The Congress party, in its recent statements, has underscored the seriousness of wage stagnation, highlighting that real wages—wages adjusted for inflation—are not just stagnating but, in many cases, declining. This phenomenon is causing widespread economic hardship among the working population, who find themselves unable to keep up with rising costs of living. Jairam Ramesh, the Congress General Secretary in charge of communications, has been particularly vocal about the government’s perceived failure to address these issues. According to Ramesh, the government has adopted an “ostrich-like” approach, refusing to acknowledge the gravity of the situation.
Ramesh’s criticism was bolstered by a recent report from a prominent brokerage firm, which highlighted the ongoing decline in real household incomes in India. This report aligns with several other data sources that have pointed to the same troubling trend. “A combination of slow wage growth and back-breaking inflation has caused an unprecedented decline in real wages,” Ramesh said in a statement. He argued that this decline is a clear indicator of the economic distress faced by Indian workers and called for immediate government intervention to address the issue.
Key Data Points on Wage Decline
Several data sources provide a comprehensive picture of the wage decline in India, supporting the Congress party’s claims. The Annual Survey of Unregistered Enterprises (ASUSE), Reserve Bank of India’s KLEMS data, and the Household Consumer Expenditure Survey (HCES) are among the most prominent. These sources collectively illustrate the financial difficulties faced by workers, with many finding it increasingly difficult to maintain their standard of living.
The Labor Bureau’s Wage Rate Index, a key indicator of wage trends in India, reveals that real wages for laborers have stagnated between 2014 and 2023. More alarmingly, this index shows a decline in real wages from 2019 to 2024. This stagnation is particularly acute in the agricultural sector, where workers are among the most vulnerable to economic shifts. According to the Ministry of Agriculture’s “Agricultural Statistics at a Glance” report, real wages for agricultural laborers grew at an average rate of 6.8% annually under the leadership of former Prime Minister Dr. Manmohan Singh. However, under the current administration, these wages have decreased by an average of 1.3% per year, highlighting a significant reversal in wage trends.
Ramesh also pointed to data from the periodic labor force survey series, which shows that average real earnings have remained flat across all types of employment—salaried workers, casual laborers, and self-employed individuals—between 2017 and 2022. This stagnation is not just a concern for individual workers; it reflects broader economic issues that could have serious implications for the country’s overall economic growth. The data indicates that workers’ purchasing power has eroded over time, leading to weaker consumption growth, which in turn hampers private investment and slows down economic development.
The Broader Impact of Wage Stagnation
The issue of wage stagnation is not just about numbers and statistics; it has real-world implications for millions of Indian workers and their families. As wages fail to keep pace with inflation, the cost of living continues to rise, leaving many households struggling to make ends meet. This economic pressure is particularly pronounced among low-income workers, who are most vulnerable to fluctuations in wages and prices.
For instance, the real wages of brick kiln workers—a group that represents some of the poorest and most marginalized laborers in India—have either stagnated or declined between 2014 and 2022, according to data from the Centre for Labour Research and Action. These workers, who are engaged in one of the most physically demanding and low-paying jobs, are often left with no other options but to endure the hardships imposed by declining real wages. The situation of these workers is emblematic of the broader trends affecting India’s workforce, where many are finding it increasingly difficult to achieve financial stability.
Moreover, the stagnation of wages has broader implications for the Indian economy. One of the key drivers of economic growth is consumption, which accounts for a significant portion of the country’s Gross Domestic Product (GDP). When wages stagnate or decline, workers have less disposable income to spend on goods and services, leading to weaker consumption growth. This, in turn, affects businesses, which see lower demand for their products, and ultimately slows down the economy as a whole.
Ramesh highlighted these broader economic issues in his criticism of the government. He argued that the government’s failure to address wage stagnation is symptomatic of a larger problem: a lack of effective economic policies that prioritize the well-being of workers and the overall health of the economy. He pointed out that the decline in real wages is not just a problem for individual workers, but a sign of deeper structural issues within the economy that need to be addressed.
Congress’s Call for Government Accountability
The Congress party has not limited its critique to the issue of wage stagnation alone; it has also raised broader concerns about the state of the Indian economy. In his intervention on the Finance Bill in the Rajya Sabha on August 8, 2024, Ramesh posed several pointed questions to the government, demanding answers on key economic issues. These questions included:
- Why does private investment remain sluggish?
Ramesh questioned why private investment, a critical component of economic growth, has not picked up despite the government’s efforts to boost it. He argued that the stagnation of private investment is a sign that the government’s economic policies are not working as intended. - Why has the private sector’s share in overall investment declined to its lowest level in four years?
This question highlights the declining confidence of the private sector in the government’s economic policies. A lower share of private sector investment suggests that businesses are hesitant to invest in new projects, which could have long-term implications for economic growth and job creation. - Why is consumption growth weak, with private final consumption expenditure—the largest component of GDP—growing at only around 4% in FY24?
Consumption growth is a key driver of economic activity, and Ramesh’s question points to the fact that it has been weaker than expected. This weak growth in consumption could be a result of stagnant wages, which reduce workers’ purchasing power and, by extension, their ability to spend on goods and services. - Why are real wages and incomes stagnant or falling?
Ramesh’s final question goes to the heart of the wage issue, asking why the government has not taken more effective measures to ensure that workers’ wages keep pace with inflation and the rising cost of living.
These questions reflect the Congress party’s broader concerns about the state of the Indian economy. The party has accused the government of failing to address the underlying issues that are holding back economic growth and contributing to the financial distress of Indian workers. Ramesh argued that the decline in real wages is not just an isolated issue, but a symptom of deeper problems within the economy that require urgent attention.
In addition to these questions, Ramesh also criticized the government for its handling of the manufacturing sector. He pointed out that manufacturing, as a percentage of GDP, has fallen from 16.5% during the United Progressive Alliance (UPA) era to 14.5% under the current government. This decline has been particularly sharp in labor-intensive sectors like textiles, where India’s garment exports have dropped from USD 15 billion in 2013-14 to USD 14.5 billion in 2023-2024. The decline in manufacturing and exports is another sign that the government’s economic policies are not delivering the results that were promised.
The Government’s Response and the Way Forward
Despite the mounting evidence and the pointed questions from the Congress party, the government’s response to the issue of wage stagnation has been largely muted. Ramesh accused Prime Minister Narendra Modi of remaining silent on these critical issues, describing him as the “non-biological PM” who has yet to address the economic challenges facing the nation. This lack of response has led to frustration among workers and opposition leaders alike, who are calling for more transparency and accountability from the government.
The Congress party’s critique is not just a political attack but a call for urgent action to address the declining real wages and the broader economic distress facing Indian workers. The party has urged the government to acknowledge the severity of the situation and take concrete steps to revive wage growth, boost private investment, and stimulate consumption. This, they argue, is essential for ensuring the long-term health and stability of the Indian economy.
As India grapples with these economic challenges, the debate over wage policies and economic strategies is likely to intensify. The Congress party’s focus on wages as a central issue reflects a broader concern about the direction of the Indian economy and the well-being of its citizens. The party has called for a comprehensive review of the government’s economic policies, arguing that more needs to be done to ensure that workers are not left behind in the country’s pursuit of economic growth.
Conclusion: A Call to Address Wage Stagnation
The Congress party’s criticism of the government’s handling of wage issues highlights the urgent need for a comprehensive review of India’s economic policies. The decline in real wages, coupled with rising inflation and sluggish private investment, poses a significant threat to the country’s economic stability and the well-being of its workforce. If left unaddressed, these issues could have long-term implications for India’s economic growth and development.
As the political debate continues, the focus on wages and economic distress will remain at the forefront of India’s policy discussions. The Congress party’s call for government accountability and action on these issues reflects a growing concern about the future trajectory of the Indian economy and the need for effective policy interventions to address the challenges ahead. The party has made it clear that it will continue to push for greater transparency and accountability from the government, and will not rest until the issues of wage stagnation and economic distress are adequately addressed.
In the coming months, as the political landscape evolves, the issue of wages is likely to become a central theme in the national discourse. The Congress party’s emphasis on this issue suggests that it sees wage stagnation as a critical factor that could influence the outcome of future elections. Whether the government will respond to these concerns with concrete action remains to be seen, but one thing is clear: the issue of wages is not going away, and it will continue to be a key point of contention in India’s economic and political debates.
Soumya Smruti Sahoo is a seasoned journalist with extensive experience in both international and Indian news writing. With a sharp analytical mind and a dedication to uncovering the truth, Soumya has built a reputation for delivering in-depth, well-researched articles that provide readers with a clear understanding of complex global and domestic issues. Her work reflects a deep commitment to journalistic integrity, making her a trusted source for accurate and insightful news coverage.
