The Congress on Saturday launched a scathing attack on the government, accusing it of ignoring the country’s economic slowdown and its long-term consequences.
In response to the latest GDP figures, which showed India’s growth slumping to a near two-year low of 5.4% for the July-September quarter of 2024, Congress general secretary Jairam Ramesh claimed that India’s medium and long-term economic potential was “eroding rapidly.”
Ramesh, addressing the grim economic outlook, questioned how long the government would overlook stagnant wages affecting crores of workers. He pointed out that while the growth rate was lower than anticipated, the consumption growth had also been unimpressive, standing at just 6%.
“The non-biological PM and his cheerleaders are wilfully blind to the causes of this sharp slowdown,” Ramesh stated, referencing a report by India Ratings and Research that identified stagnant wages as the root cause of the economic woes. The report, released on November 26, 2024, highlighted that real wage growth in India has been negligible, at 0.01%, over the past five years.
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Ramesh further slammed the government’s handling of wages, citing data from the Periodic Labour Force Survey (PLFS) that showed workers in states like Haryana, Assam, and Uttar Pradesh had experienced wage declines. He argued that this stagnation in real wages was a key factor in the overall economic slowdown, noting that the average Indian’s purchasing power had diminished over the last decade.
Using additional data from the Labour Bureau and Ministry of Agriculture, Ramesh compared the wage growth under former Prime Minister Manmohan Singh, when agricultural laborers saw a growth of 6.8% annually, to the current decline of 1.3% annually under Prime Minister Narendra Modi.
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Highlighting the stagnation in wages across various sectors, including brick kiln workers, Ramesh warned that this wage stagnation was directly affecting consumption, which in turn, was stalling economic growth. He argued that the private sector, lacking confidence in a strong domestic market, was reluctant to invest, further compounding the problem.
Ramesh concluded by expressing concern over India’s eroding economic potential and posed the question: “How long will this grim reality continue to be ignored?” He slammed the Prime Minister’s emphasis on generating hype instead of addressing the real issues at hand.
Despite the slowdown, India remains the fastest-growing major economy, with the country’s GDP still outpacing that of China, which recorded a growth rate of 4.6% for the same quarter.
