Jairam Ramesh: ‘GDP growth figures worse than anticipated, ‘slowdown’ will have severe consequences’

Noting that GDP growth figures for the July-September 2024 quarter are “much worse than anticipated,” with India recording 5.4 per cent growth and consumption growing by “unimpressive 6 per cent”, Congress leader Jairam Ramesh on Saturday said the fundamental cause for this is “stagnant wages” for crores of workers.

In a statement, Jairam Ramesh accused the Modi government of ignoring the “grim reality” of stagnant wages.

He also accused Prime Minister Narendra Modi of “generating hype” while people continue to live in hope.

“The GDP growth figures released last evening for July-Sept 2024 are much worse than anticipated, with India recording a measly 5.4 per cent growth and consumption similarly growing by an unimpressive 6 per cent. The non-biological PM and his cheerleaders are wilfully blind to the causes of this sharp slowdown, but a new report on ‘Labour Dynamics of Indian States’ released by a leading Mumbai-based financial information services company, India Ratings and Research, on November 26, 2024 reveals its real cause: stagnant wages,” Jairam Ramesh said.

He said the report uses Periodic Labour Force Survey (PLFS) data to show that overall real wage (adjusted for price rise in each state) growth at the national level has been flat at 0.01 per cent over the last five years.

“In fact, workers in Haryana, Assam, and Uttar Pradesh have seen their real wages decline in the same period. This is hardly the exception – nearly every piece of evidence points to this same damning conclusion: that the average Indian can buy less today than they could 10 years ago. This is the ultimate root cause for India’s growth slowdown,” he said.

The Congress leader cited Labour Bureau’s Wage Rate Index, Ministry of Agriculture’s Agricultural Statistics at a Glance and Periodic Labour Force Survey Series and the Centre for Labour Research and Action and said multiple sources of data have now confirmed this wage stagnation.

He said the Ministry of Agriculture’s Agricultural Statistics at a Glance shows that “under Dr Manmohan Singh, real wages for agricultural labourer grew at 6.8 per cent each year while under Narendra Modi, real wages for agricultural labourers declined by -1.3 per cent each year”.

“When real wages stagnate or fall – as they have in the last few years – consumption will also be stagnant. The recent rush of statements by senior leaders from India Inc about slowing consumption are only the symptom of this deeper malaise,” he said.

“This slowdown will have severe consequences for us: without adequate growth in consumption to assure them of a market for their products, India’s private sector will be unwilling to invest in new production,” he added.

He said GDP growth numbers reveal that private investment “continues to be extremely sluggish”. “Not surprisingly, the quarterly GDP growth numbers reveal that private investment – which has to drives accelerated economic growth – continues to be extremely sluggish. Our medium and long-term economic potential is eroding rapidly. The fundamental cause for this is stagnant wages for crores of workers. How long will this grim reality continue to be ignored? The people of India continue to live in hope while the Prime Minister generates hype,” he said.

The Congress leader also posted on X about the GDP numbers. “The root cause of the disappointing GDP growth figures published yesterday evening lies in India’s decade-long problem of stagnant real wages for crores of our workers,” he said.