Congress slams govt for 'low consumption expenditure', inequality; calls for kickstarting rural incomes

Congress leader Jairam Ramesh said India's "consuming class" is only about 30 million households — about 10 per cent of India's population — who are able to purchase goods and services at scale

Flagging issues of low consumption expenditure and inequality, the Congress on Friday said the way out of this quagmire is to shift the focus of policymaking from cronyism to bottom-up empowerment and that it must begin with kickstarting rural incomes.

In a statement, Congress general secretary in-charge communications Jairam Ramesh cited the Indus Valley Annual Report 2025, an examination of India's economic landscape and start-up ecosystem by the noted VC firm Blume Ventures, to attack the government.

The report offers a granular look into the Indian economy, he noted.

Flagging India's consumption story and inequality, Ramesh said India's per capita consumption expenditure is only $1,493 — less than a third of China's.

India's consumption of several key lifestyle goods (e.g. two-wheelers, air conditioners, footwear, FMCG, etc.) is alarmingly low. India accounted for 7 per cent of global AC units sold, whereas China accounted for 55 per cent, Ramesh said.

He said India's "consuming class" is only about 30 million households — about 10 per cent of India's population — who are able to purchase goods and services at scale.

This "consuming class" is supported by an "aspirant class" of 70 million households that have limited purchasing capacity, he said.

Finally, there are nearly 205 million households, comprising 1 billion people who don't have any income to spend on discretionary goods, he added.

"Concerningly, the consuming class is not widening — key metrics such as air passenger traffic and two-wheeler sales reflect stagnancy in volume.

India's growth is largely coming from an increase in the purchasing power of India's consuming class. For instance, the proportion of SUVs in car sales rose from 23 per cent in FY19 to 50 per cent in FY24," he pointed out.

Nearly every source of data in recent years has confirmed the same reality that India is increasingly unequal, and that India's growth is coming only from its richest, the Congress leader said.

"The majority of Indians are unable to afford anything beyond the barest necessities. They reflect in the Union Government's vision only as mere labarthis, beneficiaries of schemes – rather than rights-bearing, empowered economic agents," he said.

"The way out of this quagmire is to shift the focus of policymaking from cronyism to bottom-up empowerment. It begins with kickstarting rural incomes, with a hike in MGNREGA wages that beats inflation," Ramesh said.

Flagging the issue of household indebtedness, the Congress on Thursday said the root cause of such a "deep-seated" malaise was the stagnation in real wages and claimed the government had failed to acknowledge the "crisis".

Ramesh cited the Indus Valley Annual Report 2025 and asserted that its most worrying implications were for India's household finances.

Citing the same report, Congress general secretary Priyanka Gandhi Vadra said around 100 crore of the country's 140 crore people did not have enough money for anything other than the most essential expenses of life.

The economic injustice prevalent during BJP rule has become a curse for the country's poor and the middle class, Priyanka Gandhi had said.