StatsGuru: Decoding the recent slowdown in India's factory wage growth

Wages have long been a sticking point in India’s labour market. The Economic Survey for 2024-25 also flagged weak earnings growth across sectors. Factory wages, once seen as a marker of stable, formal employment, tell a story of strong gains in the first decade since 2004-05, followed by a slight slowdown. Taken together, the data suggests that falling real wage growth reflects not just cyclical shocks but deeper shifts in manufacturing productivity, growth, and formalisation.

 

Nominal factory wages rose sharply through the first decade (2004-05 to 2013-14), peaking in FY11 before settling into lower, steadier growth in later years.