Employees' salaries grew at 11% CAGR in 10 years

In India, during the first ten years of Prime Minister Narendra Modi's administration, the compound average growth rate (CAGR) of employee salary was 11.1%. This number includes the post-Covid era, which saw substantial changes in job arrangements, as disclosed by Finance Minister Nirmala Sitharaman in Parliament.

A fundamental change in workforce participation was brought about by the Covid-19 epidemic, as flexible and distant work became more popular. "One of the long-term impacts of Covid has affected the nature of work itself," Sitharaman said, highlighting these developments. Individuals either decide not to work full-time or opt to work from home.

This change has pushed industries to adopt automation and digital solutions, changing the labor market, corporate employment practices, and productivity models.

The latest Economic Survey shows that the gap between business profitability and wage increases is widening. According to the analysis, maintaining domestic demand and guaranteeing consistent corporate revenue over the medium to long term depend on matching pay increases with profit growth.

Sitharaman addressed concerns on India's household debt-to-GDP ratio, pointing out that it is still much lower than that of its peer group and developed economies.

"People are talking of it (household debt) as though India's is high because of the way we handled Covid," she said, dismissing claims that pandemic-related economic measures had caused household debt to reach alarming levels. I apologize that they are incorrect.