Inequality and Wage Stagnation: Threats to India's Economic Growth

The Congress warns that inequality, wage stagnation, and inflation threaten India's long-term economic growth. It urges the government to address financialisation concerns. Corporate capital gains are shifting towards financial investments due to weak demand. Congress criticizes the government's economic management, highlighting unemployment and inflation issues.

Amid rising concerns about India's economic trajectory, the Congress on Friday emphasized the peril posed by inequality, wage stagnation, and inflation to the country's growth sustainability. The party urged governmental action to tackle the increasing financialisation of the economy.

According to Jairam Ramesh, Congress general secretary in-charge of communications, enhancing private investment rates relative to GDP is crucial for sustained economic progress. However, these rates have diminished from 33.4% in 2004-2014 to 28.7% in 2014-2023.

An article shared by Ramesh from a well-known public finance economist underscored the shift towards passive income, which rose from 16% in 2016-17 to 24% in 2023-24. This inclination towards financial assets over productivity-enhancing investments raises serious concerns, largely driven by subdued post-Covid demand.

(With inputs from agencies.)