New Delhi: Congress leader Jairam Ramesh has criticized the Modi government following the release of India’s GDP growth figures for the July-September 2024 quarter, which came in at a disappointing 5.4 percent, lower than anticipated. He pointed to stagnant wages as the primary cause of the economic slowdown and accused the government of turning a blind eye to the issue.
Ramesh’s comments were based on a report titled Labour Dynamics of Indian States, which was released on November 26, 2024, by India Ratings and Research. The report, using data from the Periodic Labour Force Survey (PLFS), highlighted that overall real wage growth across India has remained almost flat, growing by only 0.01 percent over the past five years. Moreover, real wages for workers in states like Haryana, Assam, and Uttar Pradesh have actually declined.
“Workers in nearly every state are struggling with stagnant or falling wages, which is the root cause of the economic slowdown,” Ramesh said, pointing out that the average Indian now has less purchasing power than they did a decade ago. He also noted that this wage stagnation directly impacts consumption, which remains tepid, further hindering economic growth.
Ramesh also referenced data from the Ministry of Agriculture, which showed that under former Prime Minister Manmohan Singh, real wages for agricultural laborers grew at 6.8 percent annually, while under Modi’s leadership, those wages have declined by 1.3 percent per year.
The Congress leader warned that without adequate wage growth, consumption will remain sluggish, and private sector investment, which is essential for boosting production, will continue to lag. This, in turn, erodes India’s long-term economic potential.
“Private investment remains sluggish, which is evident in the quarterly GDP numbers,” Ramesh said. “This slowdown will have severe consequences for India’s economy, and the fundamental cause is stagnant wages for crores of workers.”
Ramesh’s remarks come as the government continues to promote optimistic projections for India’s economic future, including a forecast for robust growth driven by rising private consumption and investment. However, Ramesh’s critique suggests that the country’s economic woes are deeply rooted in wage stagnation and insufficient investment in workers’ welfare.
The GDP growth for the July-September quarter marks a significant slowdown from the 6.7 percent growth in the previous quarter, signaling ongoing economic challenges.