Fri Jan 31 16:22:21 UTC 2025: **India’s Economic Survey Highlights Growing Disparity Between Corporate Profits and Wages**

**New Delhi, January 31, 2025** – India’s Economic Survey 2024-25, tabled in Parliament today, revealed a widening gap between surging corporate profits and stagnant wage growth, posing a significant risk to the nation’s economic stability. The survey highlighted that while corporate profitability reached a 15-year high in fiscal year 2024, fueled by growth in sectors like finance, energy, and automobiles, wages have lagged significantly.

The profit-to-GDP ratio for Nifty 500 companies soared to 4.8% in FY24, the highest since FY08, compared to 2.1% in FY03. Large corporations, particularly in the non-financial sector, significantly outperformed smaller businesses in profitability. However, this growth wasn’t mirrored in wages, which increased by only 13%—down from 17% in FY23—despite a 22.3% rise in corporate profits. An SBI analysis of 4,000 listed companies showed only 6% revenue growth.

The survey emphasizes that sustained economic growth requires a more equitable distribution of income between capital and labor, suggesting that the current situation, with a higher profit share and stagnant wages, risks curbing demand and slowing economic expansion. It cites Japan’s post-World War II economic recovery as an example of a successful social contract between government, businesses, and workers, leading to sustained industrialization.

To address the imbalance, the survey recommends several measures, including fostering a flexible labor environment that allows for increased working hours and overtime pay, thereby boosting both business growth and worker earnings. It also emphasizes the need for a layered skills strategy to address diverse industry demands and prepare the workforce for a dynamic job market, including initiatives like internships and public-private partnerships for skill development.

The survey notes positive developments in the Indian labor market, including a decrease in unemployment and increased participation rates, driven by post-pandemic recovery and formalization. It highlights the potential of sectors like the digital economy and renewable energy to create high-quality jobs, particularly for women, and advocates for policies to encourage women’s entrepreneurship. Several government initiatives aimed at supporting women-led businesses are already underway, the survey states. Ultimately, the survey concludes that bridging the gap between corporate profits and wages is crucial for achieving long-term economic stability and realizing the vision of a “Viksit Bharat” (developed India).

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