Ten Key Points to Note in Congress’s 'Real State of the Economy' Report
New Delhi: The Congress party’s latest white paper, Inequality on the Rise, Welfare in Retreat: Real State of the Economy 2026, offers a critique of the Indian economy under the Narendra Modi government. Drawing on official data, international reports, and sectoral analysis, the paper challenges headline growth claims and argues that India is experiencing a growth in joblessness, historic inequality, and a systematic rollback of welfare and labour protections.
Ten key points emerge from the report.
1. GDP growth masks economic distress
The Congress paper argues that India’s headline GDP growth figures do not reflect ground realities. While official estimates peg growth at over 7% for FY26, several indicators: industrial output, private consumption, investment levels, household savings, and employment, tell a different story. The International Monetary Fund’s decision to give India’s statistical system a “C” grade has further fuelled concerns over data credibility. According to the report, growth numbers increasingly diverge from people’s lived economic experiences.
2. Inequality has reached historic extremes
India today is among the most unequal countries in the world. The top 10% of earners capture nearly 58% of national income, while the bottom half receives just 15%. Wealth concentration is even starker: the top 1% alone owns about 40% of total wealth. The Congress paper notes that income inequality in India is now worse than during British colonial rule, with a third of the population surviving on less than Rs 100 a day.
3. Growth has become 'jobless' and exclusionary
Despite years of high growth, employment generation has lagged sharply. Manufacturing and services; the sectors expected to absorb surplus labour, have seen their share of employment decline. Instead, more workers are being pushed back into agriculture and informal self-employment, reversing structural transformation. Secure, salaried jobs are shrinking, and informal, low-paid work dominates the labour market.
4. Young Indians are bearing the brunt
The employment crisis is most acute for youth. In 2023–24, around 2.8 crore educated young people were unemployed, while nearly 10 crore stopped looking for work altogether. Urban youth unemployment has climbed steeply, particularly among women. The report warns that India is failing to capitalise on its demographic dividend at a time when the working-age population is expected to peak within the next two decades.
5. Corporate profits have soared without sharing gains
One of the paper’s central critiques is that economic gains have accrued disproportionately to large corporations. Corporate profits touched a 15-year high in FY24, growing over 22%, while employment grew by just 1.5%. Wage growth has stagnated, and workers have not shared in rising productivity or profitability. The Congress argues that policy choices have favoured capital over labour, suppressing demand and deepening inequality.
6. The middle class is under severe strain
Contrary to claims of a thriving middle class, the report documents widespread income stagnation, falling savings, and rising debt. Household financial savings fell to a five-decade low in FY23, while household debt rose to over 40% of GDP. Salaried workers now spend a significant portion of their income on EMIs and essentials, leaving little room for savings or upward mobility. The middle class, the paper argues, is shrinking rather than expanding.
7. Tax policy has shifted the burden onto people
The Congress paper highlights a major shift in India’s tax structure. Corporate tax cuts, the abolition of wealth tax, and rising reliance on indirect taxes have increased the burden on ordinary citizens. For the first time, personal income tax collections now exceed corporate tax revenues. High GST rates and repeated hikes in fuel excise duties have disproportionately hurt the poor and middle classes, while large corporations have benefited from fiscal concessions.
8. Welfare and rights-based schemes have been dismantled
A major focus of the report is the rollback of welfare protections. The repeal of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is described as a turning point. Once a legally enforceable right to work, it has been replaced by a centrally controlled, budget-capped scheme that removes workers’ entitlements. Even before repeal, budget cuts, delayed payments, and technological barriers had weakened the programme. The Congress warns that this will deepen rural distress and distress migration.
9. Spending on public health, education, and food security are low
Public spending on health and education remains among the lowest globally. The report links low investment to rising disease burdens, increased privatisation, school dropouts, and student distress. Food security has also weakened, with cuts to nutrition schemes and outdated population data excluding millions from ration coverage. Pension support for the elderly and informal workers remains grossly inadequate, eroding basic income security.
10. Market concentration and crony capitalism are deepening inequality
Finally, the paper points to rising monopolisation across key sectors such as telecom, aviation, ports, digital payments, and infrastructure. A handful of corporate groups dominate markets, driving up prices and limiting competition. The Congress argues that this concentration, aided by policy choices, fuels inflation, suppresses wages, and entrenches inequality, undermining broad-based growth.
Speaking to The Wire, Congress president Mallikarjun Kharge said the economy was being “run on hype, not honesty,” adding that “data suppression has replaced accountability.”
Responding to questions from The Wire, Bharatiya Janata Party (BJP) national spokesperson Sudhanshu Trivedi dismissed the Congress’s criticism as “selective pessimism,” saying India remains the world’s fastest-growing major economy. He added that global agencies continue to project strong medium-term growth and pointed to recent income tax cuts and GST rationalisation as measures aimed at easing the burden on middle-income earners.
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