The middle class is shrinking and India has a mass unemployment crisis, Congress leader Jairam Ramesh alleged on Wednesday.
On his X (formerly Twitter) handle, the senior Opposition leader posted an op-ed piece from The Indian Express, which said that the rupee’s weakness this time is different and the fallout of limited job creation and muted wage growth can be seen in the greater recourse to debt.
The article confirms the growing concerns on the Indian economy, Ramesh said.
“It is becoming clear that the disappointing Q2 GDP growth numbers aren’t a blip but a clear slowdown in the economy,” the Congress leader wrote.
“The Government’s attempts to pass the buck on to the RBI’s interest rate regime and foreign exchange market interventions is an attempt to escape responsibility. The post-pandemic bump in growth was driven by a service exports boom and its knock-on effects – but this is not broad-based enough to power long-term growth,” he wrote.
He alleged: “The middle class is shrinking. The shift in the automotive industry is clear evidence: the low-priced, small car markets (the sub Rs 10 lakh segment) earlier accounted for 73% of all car sales and now accounts for only 46% of cars sold. Growth is coming only from the premium end of the market, reflecting high inequality.”
He added: “The failure of Make in India and PLIs, the country’s mass unemployment crisis, and the decade-long wage stagnation is beginning to reflect in increasing household indebtedness, poor macro-economic outcomes, and sluggish investment.”
The Narendra Modi government maintains that global factors are responsible but the Indian economy is on track. The prime minister has said India will become the world’s third-largest economy in his third term.
Last week, the International Monetary Fund (FD) said that economic growth in India slowed more than anticipated and is projected to remain at 6.5 per cent till 2026.
The slowdown was led by a sharper-than-expected deceleration in industrial activity, the IMF said in its latest update of the World Economic Outlook, according to which the global economy is holding steady.
In 2023, India's growth rate was 8.2 per cent, which dropped to 6.5 per cent in 2024.
