Slower corporate wage growth impacts consumer demand in India

Effects of single-digit salary growth for 3 qtrs on consumer spending are now palpable

The slowdown in consumer demand in recent quarters can be traced to a deceleration in salary and wage growth across corporate India. Listed companies are now reporting wage growth in the low single digits, a sharp departure from the double-digit increases seen until the last financial year.

 

Historically, net sales growth for consumer goods companies has closely tracked the growth in salary and wage expenses of listed firms, making the current trend a potential drag on broader consumption.  

In the July-September quarter (Q2FY25), the combined salary and wage expenses of 3,515 listed companies in the Business Standard sample grew 7.7