The government has raised concerns over the country’s slowing economic growth, which dropped to 5.4 percent in July-September, citing the gap between corporate profits, which have grown four-fold over the past four years and the stagnation of employee wages.
A report prepared for the government by FICCI and Quess Corp has sparked discussions in corporate boardrooms and economic ministries. The report shows that from 2019 to 2023, annual wage growth across six sectors ranged from 0.8 percent in engineering, manufacturing, and infrastructure to 5.4 percent in FMCG companies, The Indian Express reported.
The situation has worsened for workers even in formal sectors due to low or negative growth in real incomes, as wages have not kept up with inflation.
Over the past five years, from 2019 to 2023, retail inflation rose by 4.8 percent, 6.2 percent, 5.5 percent, 6.7 percent, and 5.4 percent, reducing workers’ purchasing power, the news report added.
Chief economic advisor V Anantha Nageswaran mentioned the FICCI-Quess report in several of his addresses at corporate gatherings, suggesting that India Inc needs to introspect and take action on the issue.
Quoting government sources, The Indian Express also reported that weak income levels are one of the reasons for subdued consumption, especially in urban areas.
“Post-Covid, consumption rose with pent-up demand, but slower wage growth has raised concerns about a full economic recovery to pre-Covid levels,” the source said.
The FICCI-Quess survey has also revealed that the compounded annual growth rate (CAGR) for wages from 2019 to 2023 was lowest in the EMPI sector at 0.8 percent.
In contrast, the FMCG sector saw the highest wage growth at 5.4 percent. Wage growth in other sectors included 2.8 percent for BFSI, 3.7 percent for retail, 4 percent for IT, and 4.2 percent for logistics.
The average wage in 2023 was lowest in the FMCG sector at ₹19,023 and highest in the IT sector at ₹49,076.