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According to sources, the Finance Ministry is set to initiate regular consultations with Indian industry, with a special focus on MSMEs, to address concerns over slowing wage growth and its impact on consumption and job creation. "Wages are an area of concern. While it is a private sector issue, th
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The Ministry is holding consultations with MSMEs to understand their incentives and challenges regarding wage growth and to explore how policy support can help them scale up, hire more, and contribute to job creation.
The main concern is that wage growth has been slowing down, particularly in urban areas, despite record corporate profits. This stagnation could negatively impact consumption and job creation.
No, the government cannot directly dictate wages. However, it aims to 'nudge' the private sector through dialogue and by removing regulatory bottlenecks to encourage growth and hiring.
An inter-ministerial task force is already working with state governments to streamline compliance processes and reduce operational hurdles for MSMEs, making it easier for them to expand.
Projections suggest real wage growth is expected to slow to 6.5% in FY26, and global consultancy Aon projected Indian salaries to grow 9.2% in 2025, continuing a downward trend.
Recent concerns have been amplified by Tata Consultancy Services (TCS) announcing plans to reduce its workforce by 2%, affecting over 12,000 employees.
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