Wages Failing to Keep Up with Inflation, Says NITI Aayog Member

Employment Rising, But Real Wages Lag Behind
NITI Aayog member Arvind Virmani has stated that while employment in India has increased over the past seven years, wages for regular workers have not kept pace with inflation. This growing disparity highlights the need for policy intervention to enhance earnings and improve skill development programs.
Key Observations from Virmani's Statement
•    Employment has risen, but wage growth has not matched inflation.
•    Improving the quality of education and vocational training is essential.
•    The government must focus on upskilling the workforce to increase wages.
Mismatch Between Inflation and Wage Growth
According to the Periodic Labour Force Survey (PLFS), India’s employment figures have increased significantly in the past seven years. The workforce participation rate (WPR) rose from 34.7% in 2017-18 to 43.7% in 2023-24, indicating a strong rise in job opportunities.
However, despite this increase in employment, real wages have failed to keep pace with inflation. Virmani emphasized that many jobs created in recent years lack sufficient wages to meet the rising cost of living.
Need for Skilled Jobs and Policy Reforms
Virmani pointed out that in many sectors, low-skilled jobs dominate, limiting wage growth. Comparing global trends, he noted that countries focusing on skill-based industries see higher wage growth.
To address this issue, he urged:
•    Governments at all levels (central, state, and district) to take action.
•    State governments to improve their investment attractiveness index, which measures how well they create business-friendly environments.
The Way Forward
While India’s economy continues to grow, ensuring that wages rise in proportion to inflation is crucial for economic stability and improved living standards. Investing in skill development, education, and vocational training can bridge this gap and create higher-paying jobs.