Congress criticises Centre over report of sinking GDP rate

The Congress on Saturday criticised the central government over the slumping gross domestic product (GDP) growth while denouncing stagnating real wages as the fundamental reason behind it. Citing the recent data from a research firm, the party attacked Prime Minister Narendra Modi for being “willfully blind to the causes of this sharp slowdown.”

“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,” Congress general secretary (communications) Jairam Ramesh said in a statement.

On Friday, a Mumbai-based information services firm reported a two-year low of 5.4% growth rate in India’s economy in the July-September quarter. The report said the slowdown was due to the poor performance of manufacturing and mining sectors. However, it said the country continued to remain the fastest-growing large economy.

Stagnation of real wages

The Congress leader cited multiple reports to claim that the stagnation of real wages in the last decade was the root cause of the disappointing GDP figures. He referred to the government data which reported a stagnation of real wages of labourers between 2014 and 2023 and a decline between 2019 and 2024. The Union agriculture ministry’s Agricultural Statistics at a Glance report said the real wages during the Manmohan Singh government grew at 6.8% a year, whereas, it went down by -1.3 % a year in the Modi government. Similarly, the Periodic Labour Force Survey report pointed out a stagnation of average real earnings across all employment types including salaried workers, casual workers and self-employed workers between 2017 and 2022.

Ramesh also cited the Centre for Labour Research and Action report which discussed the stagnation and decline of real wages of brick kiln workers between 2014 and 2022. It said that the employment in brick kilns is a low-paying work of last resort for India’s poorest.

He mentioned the consequences of the reported economic slowdown which include the unwillingness of India’s private sector to invest in new production amid the absence of adequate consumption.

“Not surprisingly, the quarterly GDP growth numbers reveal that private investment - which has to drive 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.