To beat slow growth, India needs to create better-paying jobs at scale

The combination of slower productivity and a shrinking formal sector has substantially restrained wage growth, undermining both worker income and domestic demand

A slow increase in wages can have troubling implications for economic growth and equity. The Annual Survey of Industries (2023-24), recently released, underscores this concern: Profits per factory rose 7 per cent, while wages per worker increased only 5.5 per cent. Profits grew faster than wages for several years in the recent past. The Economic Survey for 2024-25 also flagged weak wage growth, while corporate profitability increased to a 15-year high in 2023-24. The data shows that gains in labour productivity too have faltered, with output per worker showing weaker growth after 2013-14 than earlier years did. At