‘Proverbial ostrich’: Congress attacks govt over decline in real wages

The Congress on Sunday, 25 August, claimed that a combination of slow wage growth and "back-breaking" inflation has caused an unprecedented decline in real wages and said that like the "proverbial ostrich", the government continues to remain blind to the most fundamental challenge faced by the Indian economy.

Congress general secretary in-charge communications Jairam Ramesh said a new report by a noted brokerage firm has once again shed light on the truth that the Union government has consistently denied - real household incomes in India are facing a persistent decline.

"A combination of slow wage growth and back-breaking inflation has caused an unprecedented decline in real wages (wages adjusted for price rise) and therefore incomes," he said in a statement.

Ramesh pointed out that several surveys and data sets - including the Annual Survey of Unregistered Enterprises (ASUSE), the Reserve Bank of India's KLEMS data, and the Household Consumer Expenditure Survey (HCES) - have demonstrated financial distress among working class Indians.

Multiple data sources, including the government's own official statistics, have even shown clear evidence that workers can buy less today than they could 10 years ago, he said.

"Labour Bureau's Wage Rate Index (Government Data): Real wages for labourers stagnated between 2014-2023, and in fact declined between 2019-2024. Ministry of Agriculture's Agricultural Statistics at a Glance (Government Data): Under Dr Manmohan Singh, real wages for agricultural labourers grew at 6.8% each year. Under Mr. Modi, real wages for agricultural labourers declined by minus 1.3% each year," he said.

Citing periodic labour force survey series, Ramesh said average real earnings over time have stagnated between 2017 and 2022 across all employment types - salaried workers, casual workers, and self-employed workers.

Citing Centre for Labour Research and Action data, he said real wages of brick kiln workers have stagnated or declined between 2014 and 2022.

Brick kilns involve intensive labour and are a low-paying work of last resort for India's poorest, he added.

"In my intervention on the Finance Bill in the Rajya Sabha on 8 August, 2024, I had asked four straight questions on the state of the economy," he said.

"The non-biological PM hasn't yet broken his silence on them, so they are worth repeating: Why does private investment continue to be sluggish? Why has the private sector's share in overall investment declined to its lowest level in four years?" Ramesh said.

"Why is consumption growth so weak and why did private final consumption expenditure - the largest component of the GDP - grew at only around 4% in FY24," he asked.

Why are real wages and incomes stagnant or falling, Ramesh further asked.

"Why has manufacturing as percentage of GDP fallen from 16.5% in UPA to 14.5%? Why has this decline been particularly sharp in labour-intensive manufacturing like textiles? Why have India's garment exports fallen from $15 billion in 2013-14 to $14.5 billion in 2023-2024?" the Congress leader said.

"The Union Budget has come and gone, but like the proverbial ostrich, the government and the non-biological PM continue to remain blind to the most fundamental challenge faced by the Indian economy," Ramesh said.