New Delhi, February 28 — Highlighting grave concerns over India's stagnating consumption expenditure and widening economic disparity, the Congress party has urged the government to move away from crony capitalism and adopt bottom-up economic empowerment. The party emphasized that revitalizing rural incomes through increased wages under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is crucial to addressing these issues.
Congress general secretary and communications chief Jairam Ramesh raised these points, referring to findings from the Indus Valley Annual Report 2025, published by venture capital firm Blume Ventures. The report provides an in-depth examination of India’s economic scenario and start-up environment.
India's Consumption Crisis: Alarming Statistics Revealed
Ramesh pointed out that India's per capita consumption expenditure stands at just USD 1,493, less than one-third of China's, underscoring a deeply concerning gap in living standards. The consumption levels for lifestyle essentials such as two-wheelers, air conditioners, footwear, and Fast-Moving Consumer Goods (FMCG) remain strikingly low compared to global standards. Specifically, India accounts for merely 7 percent of global air conditioner sales, starkly contrasted with China’s commanding 55 percent share.Furthermore, India's economic activity is driven primarily by a relatively small "consuming class," which consists of only around 30 million households—roughly 10 percent of the total population. Supporting this demographic is an "aspirant class" of 70 million households whose purchasing power remains limited. Alarmingly, nearly 205 million households, representing around one billion individuals, are unable to afford discretionary goods, surviving solely on essential items.
"The consuming class in India is not expanding," Ramesh emphasized, noting signs of stagnation in key sectors such as air passenger traffic and two-wheeler sales volumes. Economic growth primarily hinges on the existing consuming class, as demonstrated by the significant rise in Sports Utility Vehicle (SUV) sales—from 23 percent in FY19 to 50 percent in FY24—indicating increased purchasing power confined within a small elite.
Persistent Economic Inequality: A Stark Reality
Ramesh warned of an alarming economic divide, highlighting that multiple sources and reports have consistently affirmed growing inequality. "Most Indians can't afford anything beyond their most basic necessities. They appear in the Union Government’s vision merely as beneficiaries ('labarthis') of welfare schemes rather than as empowered economic agents," he remarked.The report's implications for household finances are particularly troubling, according to Ramesh. On Thursday, he flagged the issue of rising household debt levels, identifying the root cause as the persistent stagnation of real wages—a reality he accuses the government of continuously ignoring.
Priyanka Gandhi Echoes Concerns Over Economic Injustice
Supporting these claims, Congress General Secretary Priyanka Gandhi Vadra stressed that nearly 100 crore of India's 140 crore citizens do not possess sufficient income for anything beyond essential expenditures. "Economic injustice during the BJP's tenure has become a curse for the country's poor and middle-class segments," she said.In conclusion, the Congress called on policymakers to adopt a strategy focused on grassroots economic empowerment, asserting that genuine economic progress hinges on enhancing rural incomes through robust wage increases under MGNREGA, effectively beating inflation.