"Just 0.01% jobs added between 2012 and 2019, while 70-80 lakh youths join the labour force every year."
The Congress sounded a dire warning about the state of the Indian economy, saying that “alarm bells” are being ignored by the Centre. Congress general secretary Jairam Ramesh raised concerns over the stagnant wages and soaring inflation that are compelling households to resort to loans merely to sustain themselves, plunging them deeper into debt.
He said that the Congress” “Nyay Patra” is a direct response to the government”s inadequacies, claiming that the era of “dus saal anyay kaal” will come to an end on June 4.
“All the alarm bells are ringing in the Indian economy, only Mr. Modi does not seem to hear them. Under his leadership, India has witnessed record levels of unemployment, high inflation, declining real wages, widespread rural distress, and dramatic increases in inequality,” Ramesh said in a statement.
Quoting a recent report from a leading financial services company published in the Business Standard, Ramesh elaborated on the distressing realities. He highlighted that household debt has surged to an alarming 40% of the Gross Domestic Product (GDP) by December 2023, marking a historic high. Additionally, he flagged the concerning statistic that net financial savings, at 5% of GDP, have plummeted to their lowest point in 47 years, as revealed by the same report.
Ramesh pointed out the report”s observation that this decline in savings is not an isolated incident, but rather a symptom of sustained weak income growth. He explained how this phenomenon has resulted in subdued private consumption and household investment growth throughout 2023-24.
“The authors make sure to point out that the “dismal” savings rate is “not an anomaly”, and that net financial savings have remained at 5% of GDP for the first nine months of 2023-24. Reduced savings means less capital available for business and government investments, and increased reliance on volatile foreign capital,” he said.
The report starkly refutes the Finance Ministry”s narrative, attributing the surge in household debt primarily to a rise in unsecured personal loans rather than traditional forms such as home or vehicle loans, as asserted by the Ministry, according to Ramesh.
“The share of housing in personal loans is actually below 50% for the first time in 5 years, and only high-end automobiles are doing well, while mass market cars and 2-wheeler sales have slumped,” the Congress leader argued.
Ramesh drew attention to the concerning uptick in gold loans in December, suggesting that households resort to these loans as a last resort, indicative of the financial strain imposed by stagnant wages and soaring inflation.
Dismissing attempts by the finance ministry to downplay the gravity of the situation, Ramesh asserted that the reality is evident to all: Indian households are slowly sinking into debt.
“The findings of this report add to the laundry list of the Modi government”s economic failures: Near-zero growth in employment – just 0.01% jobs added between 2012 and 2019, while 70-80 lakh youths join the labour force every year. Real wages of regular workers have declined between 2012 and 2022. Due to high inflation, workers can now afford less than they could ten years ago,” he said.
