Congress: Decline in Household Income Ignored

New Delhi: The Congress on Sunday criticised the government for ignoring what it called the “most fundamental challenge” facing the Indian economy: the decline in real household incomes. Comparing the government’s stance to that of the “proverbial ostrich,” Congress accused it of being blind to the economic hardships faced by the country’s working class.

Congress general secretary Jairam Ramesh pointed to a new report by a prominent brokerage firm, which he said confirms the persistent decline in real wages — a trend the government has consistently denied. “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,” Ramesh said in a statement.

He cited various 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), which indicate growing financial distress among working-class Indians. Ramesh noted that multiple sources, including government statistics, show that workers can purchase less today than they could a decade ago.

According to the Labour Bureau’s Wage Rate Index, real wages for labourers have stagnated between 2014 and 2023 and even declined between 2019 and 2024. Ramesh contrasted this with data from the Ministry of Agriculture’s “Agricultural Statistics at a Glance,” which shows that under former Prime Minister Manmohan Singh, real wages for agricultural labourers grew at 6.8 per cent annually, while under Prime Minister Modi, they declined by 1.3 per cent per year.

Ramesh also referenced data from the Centre for Labour Research and Action, highlighting that the real wages of brick kiln workers—a group representing some of India's poorest and most labor-intensive workers — have stagnated or declined between 2014 and 2022.

In a speech delivered in the Rajya Sabha on August 8, 2024, Ramesh posed several pointed questions about the state of the economy, which he claims have yet to be addressed by the Prime Minister. These questions include why private investment remains sluggish, why the private sector’s share of overall investment has declined to its lowest level in four years, and why consumption growth is weak, with private final consumption expenditure — the largest component of GDP — growing by only around 4 per cent in FY24. Ramesh also questioned why real wages and incomes are stagnant or falling, why manufacturing as a percentage of GDP has decreased from 16.5 per cent under the UPA to 14.5 per cent under the current government, and why India's garment exports have declined from $15 billion in 2013-14 to $14.5 billion in 2023-24. The Congress leader’s remarks reflect the party’s ongoing efforts to hold the government accountable for economic issues ahead of the upcoming elections.