Budget 2024 has arrived and through that India’s economy is sending mixed signals in 2024. While headlines celebrate corporate profits hitting 15-year highs, a quieter crisis brews: salaries for workers—especially freshers and mid-level employees—are stuck in 2014. The latest India Economic Survey 2024 reveals a stark contradiction: listed companies’ profits grew 22.3% last year, but jobs expanded by a paltry 1.5%. Even more jarring?
CEOs now earn 40% more than pre-pandemic levels, while entry-level tech salaries barely budged.
This isn’t just about fairness—it’s economic math. As Japan proved post-WWII, shared prosperity between companies and workers fuels long-term growth. But can India replicate that model? Let’s dissect the data.
1. Corporate Profits in India are Soar to 15-Year Highs – But Where’s the Worker Share?
Let’s face it—corporate India is booming. Nifty 500 companies hit a 4.8% profit-to-GDP ratio in FY24, the highest since 2008. Sectors like energy, automobiles, and financials drove this surge, with non-financial giants outperforming smaller players by miles.
But here’s the kicker: profits grew 22.3%, while employment inched up just 1.5% creating more Economic inequality in India.
Why this imbalance in India wage growth 2024?
- Companies prioritized cost-cutting: Employee expenses grew 13% in FY24 vs. 17% in FY23. (Source: Economic Survey of India 2024-25)
- Stable EBITDA margins (22% over 4 years) didn’t translate to wage hikes.
Key Stat about Worker wages India 2024: For every ₹100 earned by large firms, only ₹6 went to employee wages.
2. IT Freshers: Stuck in a 2014 Salary Time Warp
The numbers don’t lie. Prasadh M S, Head of Workforce Research from staffing firm Xpheno reveals that Engineering freshers earned ₹3-3.4 LPA in 2013-14. A decade later? Just ₹3.8-4.5 LPA—barely keeping pace with inflation. Worse, salaries for niche skills like React.js and Machine Learning fell by up to ₹3 LPA due to oversupply of graduates.
Expert Insight:
“Companies are hoarding cash instead of talent. Why train freshers when you can poach seasoned pros?”
– Sarbojit Mallick, Instahyre Co-founder
Shock Factor: While freshers struggled, According to Deloitte India’s 2024 Executive Performance Survey, IT CEOs saw pay jump 40% post-COVID, with HCL’s CEO bagging ₹84 crore in FY24 (vs. ₹4.2 crore in 2014) (Annual report of HCL 2024).
3. The CEO-Worker Divide: A Recipe for Economic Disaster
Let’s talk brass tacks. When CEOs earn 1,000x more than entry-level employees, demand tanks. Workers can’t afford to buy the products their companies sell. The Economic Survey warns this imbalance could “slow the economy by curbing demand”—a lesson Japan avoided by sharing productivity gains with workers post-WWII. (As Matthew C. Klein and Michael Pettis explain in ‘Trade Wars are Class Wars’)
Japan’s Blueprint for Success:
- Workers accepted lower wages temporarily to fund industrial growth.
- Companies repaid them with steady pay hikes and infrastructure investments.
India’s Reality Check:
- Labor’s share of GVA rose slightly, but profits grew 4x faster.
- Without fair wages, India risks a “demand drought” in consumer markets.
4. How Stagnant Salaries Fuel Attrition (and What Companies Can Do)
Delayed appraisals and stagnant pay are driving IT talent to quit. As Aditya Narayan Mishra (CIEL HR) puts it:
“Top performers won’t stick around for empty promises. Recognition and upskilling are non-negotiable.”
Fix It Like Japan Did:
- Link CEO pay to worker wage growth.
- Tax incentives for companies that invest in fresher training.
- Transparent appraisal cycles to rebuild trust.
5. FAQs: Your Burning Questions Answered about India Economic Survey 2024
Only if companies realize underpaid workers = shrinking markets. On other hand Japan’s model proves shared growth is sustainable.
Not if India invests in industry-ready education (not just degrees) and startups disrupt hiring monopolies.
Enforce wage-profit ratio disclosures for listed firms and reward equitable companies with tax breaks.
India Economic Survey 2024:Final Take
India’s at a crossroads: replicate the West’s inequality mistakes or follow Japan’s path of shared prosperity. As the Economic Survey hints, “profits without wages are a bubble waiting to burst.” The fix isn’t rocket science—pay workers fairly, and watch demand (and profits) grow organically.
