Concern in govt: Pvt sector profit at 15-year high but salaries stagnant

● From services to manufacturing, wages show marginal growth

- AANCHAL MAGAZINE & SANDEEP SINGH

THE SHARP SLUMP in economic growth rate to 5.4% in July-September this year has sparked concerns among policymakers that low single-digit income growth in the corporate sector despite 4x (four-times) growth in profits over the last four years, is one of the reasons for slowing demand.

What has triggered conversations within corporate boardrooms, key economic ministries, and between the two, is a report prepared for the government by industry chamber Ficci and Quess Corp Ltd, a tech-enabled staffing firm with 3,000-plus clients, which showed that the compounded annual wage growth rate across six sectors between 2019 and 2023 ranged between 0.8% for the engineering, manufacturing, process and infrastructure (EMPI) companies and 5.4% for fast-moving consumer goods (FMCG) firms.

What has made matters worse for workers even in formal sectors is a meagre or negative growth in real incomes i.e., wage growth when adjusted for price rise or inflation. Over the five years from 2019-20 till 2023-24, retail inflation rose 4.8%, 6.2%, 5.5%, 6.7% and 5.4%, respectively.