- In Q1 2024-25, India’s real wages grew by 0.7%, a modest improvement after an average contraction of 1.6% over the past 24 quarters.
- This growth, though uneven across sectors, is expected to accelerate, potentially boosting personal consumption.
- Rising real wages could boost household consumption, crucial for private investment momentum.
- However, urban consumption shows signs of weakness, with passenger vehicle sales dropping 18.8% in September 2023, and a slowdown in FMCG sales in urban areas.
- Despite India’s 8.2% economic growth in 2023-24, private consumption grew by only 4%, the slowest pace since 2002-03, excluding the pandemic year.
- The Finance Ministry highlighted declining urban unemployment and improving rural incomes as key factors in consumption growth but noted concerns over weakening urban demand.
Dig Deeper: Read about the Global Wage Report of ILO.
