Congress leader P. Chidambaram releases 'Real State of the Economy 2025' report, in New Delhi, Thursday, Jan. 30, 2025. (PTI Photo)
NEW DELHI — Ahead of the Union Budget, the Congress Thursday slammed the government's handling of the economy, asserting that there is a slowdown with "no jobs, raging inflation, stagnating wages and huge income inequality".
The Congress on Thursday came out with a 'Real State of the Economy' report, compiled by AICC Research Department chairperson Professor M V Rajeev Gowda and his team, claiming the Modi government is marching India forward into the middle-income trap, which will make the country uncompetitive, underproductive and unequal.
The opposition party also said that India's GDP growth for 2024-25, as per government data, is expected to be 6.4% but this rate of growth is not a cause for celebration as the country needs a sustained GDP growth of 8 per cent if it wants to encash its historic demographic dividend.
Addressing the press conference after releasing the 'Real State of the Economy 2025' report, senior Congress leader and former finance minister P Chidambaram said no matter how much the government may try to deny it, the economy is in a slowdown and it has fallen up to two per cent of the previous year's growth.
Asked whether the economy could go into recession, Chidambaram said the economy would not go into a recession even if there is no government in India and it will continue to grow at 4-5% because there are farmers, workers, and small industries that produce food grains and other things and services.
"The real question is how much more than 4-5% the government can grow the economy. This government's policies added about 1.5-2% to the inherent growth rate, but that's not sufficient.
"We are indeed the fastest-growing economy in the world, but please remember this: Growing at 2.7% last year, the US added USD 787 billion to its GDP in that one year. Meanwhile, China grew last year at 4.91%, and it added USD 895 billion to its GDP. We are growing at a faster rate but we add only USD 256 billion to our GDP. So, we actually need to see the addition to the GDP and not compare the growth rates," he said.
Asserting that the economy is indeed facing significant challenges, Chidambaram said the high unemployment rates among youth and graduates, which are nearly 40% and 30%, respectively, are alarming.
"This is exacerbated by stagnant wages, which have remained unchanged for four to five years, making it difficult for people to make ends meet. Meanwhile, inflation is on the rise, with food, education, and healthcare inflation increasing by double digits," he said.
"There is a huge inequality gap, with 70% of the population living on a meagre Rs 100-150 per day. The rich-poor divide is growing," Chidambaram said. "The economy is in a slowdown... that cannot be denied at all. However, much the government may try to do that the economy is in a slowdown and this may be fallen up to two per cent of the previous year's growth."
"There are no jobs despite the PM handing out letters to people from time to time. That is just filling of vacant posts and does not involve creation of new jobs," he said at the press conference.
Chidambaram said wages have stagnated for the last four to five years.
"Inflation is raging, with food, education and healthcare inflation in double digits. Inflation has been raging for 2-3 years," the Congress leader said.
Chidambaram said many of the facts mentioned in the report released by the party are conveniently buried by the Union government.
The report titled 'What happened to growth?' said, "GDP growth in the 6% range is insufficient to create jobs for our growing youth population, especially when rapid technological change is disrupting the future of jobs."
"It will keep India stuck in a state of high inequality, where two-thirds of our population remains dependent on free grains from the government, while the prime minister’s favoured few accumulate wealth rapidly."
The Congress said such economic under-performance robs millions of the Constitution's promise of a more just, prosperous and equal future.
Detailing what it said were different dimensions of "India’s economic malaise", the report listed the unemployment crisis, uninspiring and unequal GDP growth and stagnant incomes, low household consumption and declining savings.
The report also highlighted other issues plaguing the economy under the heads -- decline in manufacturing and a "devastating hit" to trade and investment, an "eroding welfare state", "attack on MGNREGA", agrarian crisis and farm distress, inflation, crony capitalism, the BJP's "attack on institutions" and suppression of critical data.
Sharing the report, Congress general secretary in-charge communications Jairam Ramesh said, "The forthcoming Union Budget will be preceded by the Economic Survey. As is the tradition under this Government, the Survey will be divorced from the realities of the Indian economy: slowing growth, stagnant wages, high inflation, and mass unemployment. "
"To document the painful reality of the economy, Professor Rajeev Gowda and the AICC Research Department have produced the Real State of the Economy Report, 2025. This 116-page report is a truthful, unvarnished look at the economy as the common man is experiencing it," he said.