Senior Congress leader Jairam Ramesh on Wednesday said the country’s growth has slowed down in the past decade adding that there is a stagnancy of India’s consumer demand growth.
“In the last ten years, India’s consumption story has now gone in reverse swing and emerged as the biggest pain point for the Indian economy”, a statement released by the Congress leader said.
Ramesh highlighted three reasons for the slowdown namely stagnant wages, high inflation and inequality.
“Stagnant wages: Multiple data sources, including the Government’s own official statistics such as the recently released Annual Survey of Industries (ASI) 2022-2023, have shown clear evidence that workers can buy less today than they could 10 years ago. Worryingly, these stagnant wages may have to do with a decline in productivity for India’s labourers. As labour productivity falls and real wages stagnate, families will have less additional income to dedicate to consumption”, the statement read.
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“High inflation: As Dr. Viral Acharya, former Deputy Governor of the Reserve Bank of India, has noted, the last decade has seen the emergence of 5 big conglomerates, including the Adani Group, who are building monopolies in 40 sectors (including cement, chemicals, petrol, construction, etc.)”, the statement added.
“In 2015, when a common man used to purchase Rs. 100 worth of goods, he was paying 18% to the industrialist owner. Today, he is now paying Rs. 36 in profits to the same owner. The price rise of the last few years is directly attributable to the Government’s cronyism and patronage of these conglomerates. This relentless increase in the cost of goods and services has eroded the common man’s ability to increase consumption, especially given stagnant wages”, he said.
Ramesh went on to criticise PM Narendra Modi-led government adding that inequality has peaked under him.
“Inequality: India’s recovery from the COVID-19 pandemic has been highly unequal and K-shaped, with rural India and the poor left behind. The sales of 2-wheelers in rural areas – a leading indicator of economic growth – are still lower than they were in 2018. Across geographies, inequality has peaked, with data showing that Narendra Modi’s Billionnaire Raj is more unequal than the British Raj in its heyday”, he wrote.
Ramesh further said the country is in its most precarious and difficult economic situation in many years.
“Wage stagnation, inflation, and inequality are not just political issues – they are structurally corrosive to India’s long-term growth prospects. They undermine India’s consumption growth and deprive the private sector of its single-most important incentive to invest. These chokepoints will strangulate growth in the years to come if not taken seriously now, in a spirit of humility”, he said.