A double whammy hit Indian workers in 2022. The real wages of workers recorded a drastic fall, especially after the pandemic. At another end, the unemployment rate, except in the case of skilled personnel to some extent, has witnessed an alarming growth. While the disturbing report on the falling wages came from the International Labour Organisaion (ILO) towards the fag end of last year, the report on the rising joblessness was put out by the Centre for Monitoring Indian Economy (CMIE). To get a clear picture of this harsh scenario, it is important to take a look at the data given out by both the agencies. According to ILO, India’s real wage growth in 2006 was 9.3 per cent, but it declined to -0.2 per cent in 2021. Ringing a warning bell, the report stated that the informal workers suffered a 22.6 per cent fall in wages and the formal sector employees suffered a wage cut of 3.6 per cent on an average.
 
Coming to the increasing unemployment, the CMIE report, released in December 2022, stated that urban joblessness grew from 8.14 per cent in January 2022 to 10.09 percent in December. In the same way, rural unemployment that was 5.83 percent in the beginning of the last year grew to 7.44 per cent by the end of the year. Thus, unemployment rate for the whole of India registered an increase in the last year. The combined impact of these double crises is that the economic development of the country has taken a beating. It has put millions of workers in dire straits and they are faced with increasing uncertainties.  
 
A direct consequence of this double whammy -- decreasing real wages and increasing unemployment rate -- will be its adverse impact on the purchasing power of people. Unless there is enough money in the hands of the people, their purchasing power will drastically fall. This will have a cascading impact on the economy as there will be less demand, forcing industries to lower their production. It will be a big blow to the worsening employment situation as producers and manufacturers will be forced to further cut wages and retrench employees. Thus, the overall impact of this vicious circle will lead the economy to move on weak crutches. Adding fuel to fire, according to the ILO report, inflation too will bite into the purchasing power of people. 

The worst victims of this double blow will be the unskilled and semi-skilled workers and low-income people. However, those in the upper echelons of the economy might not feel the pinch as their income will continue to grow even in this worsening scenario. A direct fall-out of this flawed economic development will be the widening income inequality. This will be a serious challenge to India in its march to the group of super powers or a $5 trillion economy as envisaged by Prime Minister Narendra Modi, and the 2024 deadline to achieve this target seems insurmountable by all means. Another of his deadline for doubling the income of farmers by 2022 has gone by, leaving the farmers no better off than they were, and the Prime Minister making no mention of it in recent days as if he had never made such a promise. Wild promises might sound appeasing, but they might prove hard nuts to crack, on the ground.