While India's economy continues to expand, real incomes for millions of workers—especially men—are stagnating or declining. The Economic Survey 2024-25 reveals that inflation is outpacing wage growth, eroding purchasing power and deepening economic inequality.

Despite a post-pandemic recovery in employment, real wages tell a different story. In 2023-24, real monthly wages for male salaried workers were 6.4% lower than in 2017-18, showing a significant loss of purchasing power. For self-employed men, real incomes dropped by 9.1% over the same period.

The squeeze is even more apparent in rural India. From April to September 2024, real wages for male agricultural workers grew by a meager 0.6%, while those in non-agricultural jobs saw an increase of just 0.4%. Women, however, fared slightly better, with 1.8% growth in agricultural wages and 2.6% in non-agriculture.

Even within India’s formal workforce, wage growth is lagging behind corporate profits. In FY24, corporate profits surged 22.3%, but employment grew by only 1.5%. While companies focused on cost-cutting, employee expenses rose by just 13%, down from 17% in FY23, according to an SBI report.

Employment is rising, but what about quality jobs?

India’s labour force participation rate (LFPR) has climbed to 60.1% in FY25, up from 49.8% in 2017-18. Unemployment has fallen to 3.2%, and the manufacturing sector has added 22 lakh jobs since FY19.

However, a major employment shift is underway. Self-employment now accounts for 58.4% of total jobs, up from 52.2% in 2017-18.

The share of salaried employment has declined, raising concerns about job security and stable incomes.

Even in India’s factories, which have seen a 7% increase in employment, the benefits are uneven. While large factories (100+ workers) now employ 80% of the manufacturing workforce, wage growth remains slow despite the sector’s recovery.

Women in the workforce: Progress with pay gaps

A bright spot in the data is the rising female labour force participation rate (FLFPR), which has increased from 23.3% in 2017-18 to 41.7% in 2023-24. Government schemes like Mudra Yojana and Start-Up India have boosted women’s self-employment, especially in rural areas.

But deep pay disparities remain. Salaried women earn ₹16,498 per month, compared to ₹22,092 for men.

Among casual workers, men earn ₹450 per day, while women make just ₹296—a striking 34% gap.

India’s push to formalize the workforce has seen EPFO net payroll additions double from 61 lakh in FY19 to 131 lakh in FY24. The 18-25 age group accounts for 47% of new jobs, reflecting a youth-driven shift in formal employment.

However, the informal sector—still employing a vast majority of Indians—remains largely undocumented in official wage statistics. Real wage declines in this segment could be even more severe than reported.

India's wage crisis demands swift action. Taming inflation is key to protecting real incomes, while creating better-paying jobs will drive true economic growth. Bridging the gender pay gap and strengthening social safety nets can ensure fairer wages for all. Without bold reforms, more jobs won’t mean more money—just more struggle.