First, Ramesh pointed to a significant decline in private sector investment. After a brief resurgence in 2022-23, new project announcements fell 21% between FY23 and FY24.
This trend reflects declining investor confidence in India’s consumer markets.
Ramesh criticized the government’s inconsistent policies and what he termed “Raid Raj”, suggesting that companies now prefer to use profits to pay off debt rather than invest in growth.
“India Inc. is focusing on stock market valuations rather than revenue growth, indicating a worrying trend,” he said.
Secondly, he highlighted the stagnation of India’s manufacturing sector, which continues to have the same proportion of GDP as a decade ago.
Employment in the manufacturing sector has declined slightly and India’s share of global merchandise exports is stagnant.
“In labor-intensive sectors like garments, exports have fallen from $15 billion in 2013-14 to $14.5 billion in 2023-24,” Ramesh said.
He attributed this decline to the government’s trade policies, which he said discourage participation in global value chains due to high tariffs, while allowing massive imports from China.
Lastly, the Congress The leader drew attention to the worrying results of the Annual Survey of Industries (ASI) for 2022-2023, which indicated a decline in real wages and productivity among Indian workers.
Gross value added (GVA) growth per worker fell from 6.6% in 2014-15 to just 0.6% in 2018-19. Post-COVID, worker productivity contracted again in FY23. “Stagnant real wages will suppress consumption, leading to a persistent low-investment environment,” Ramesh warned.
Furthermore, he emphasized that these problems, along with growing oligopolization, mass unemployment and high inflation, have persisted over the last decade.
Ramesh accused the Prime Minister and his administration of making “grandiose claims” about the economy that mask the real challenges ahead.
He urged a spirit of humility in addressing these critical points that could strangle growth if not taken seriously now.
First published: October 6, 2024 16:47 IS
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