India’s Growth Story and The Invisible Worker
Why ₹5 Crore Salaries Are Easy but ₹20,000 Wages Become Impossible?
The recent labour unrest in Noida has once again compelled India to confront an uncomfortable truth: economic growth and social justice are not moving together.
(NOTE: Arvind Shrouti, the author of this blog post, is a well known advisor and influencer of industrial relations in Pimpri-Chinchwad industrial region. His positive influence on industrial relations is unmistakable, and he has often proposed and implemented imaginative solutions to IR issues. He is a thinker par excellence in this arena. This article is his response to my blog on Noida unrest. He makes deep analysis of the issues and I recommend a careful perusal. Readers are requested to respond with their thoughts to enrich this discussion.)
In his insightful analysis, Vivek Patwardhan situates the Noida incident within a broader structural crisis of labour relations in India. Rather than treating the unrest as an isolated law-and-order problem, he examines the deeper forces shaping industrial conflict — wage stagnation, migration, weakening labour institutions, employer practices, and the changing aspirations of workers. His article performs an important public service: it shifts the conversation from violence to causation.
India proudly presents itself as a rising economic power. Stock markets reach new highs, corporate profits expand, and executive compensation packages grow steadily year after year. Economic growth figures dominate public discourse. Yet, beneath this narrative of progress lies a disturbing contradiction — millions of workers who actually produce wealth continue to struggle for wages that barely ensure survival.
Recent labour unrest in industrial centres like Noida is not an isolated incident. It is a symptom of a deeper structural imbalance within Indian society: wealth is being generated collectively but distributed unequally.
Modern industry functions through complex supply chains. Raw materials are mined, components manufactured, goods assembled, transported, marketed, and serviced through the coordinated effort of thousands of workers performing both physical and mental labour. Without labour, capital remains idle. Machines do not operate themselves. Technology does not produce value independently.
Yet when profits emerge, they do not flow back proportionately to those who create them. Instead, wealth moves upward: Executive salaries expand dramatically, Shareholder returns multiply and corporate valuations rise. Meanwhile, workers remain trapped in low wages, insecure employment, and rising living costs. This raises a fundamental question: Why can a CEO’s salary increase from ₹3 crore to ₹5 crore without debate, while raising workers’ wages from ₹12,000 to ₹20,000 is described as economically impossible? The answer lies not in economics but in how society values labour and power.
One of the most significant yet under-recognized developments in India’s political economy is the fragmentation of the working class itself. Today, workers exist in three broad layers: The Deprived — migrant workers, contract labour, gig workers, and informal employees without job security or social protection. The Exploited — semi-secure workers facing stagnant wages, rising productivity pressures, and constant fear of replacement. Unionized Permanent Workers — a shrinking group enjoying relatively better wages and benefits.
Over time, management strategies have successfully redistributed a small portion of economic surplus to permanent unionized workers. This limited sharing often converts sections of organized labour into silent participants within a broader system of inequality. The working class becomes divided against itself. Solidarity weakens. Structural inequality strengthens.
Industrial regions attract workers from poorer states not because conditions are fair but because alternatives are worse. Workers accept: 12-hour workdays, wages below legal standards, unsafe workplaces, simply because unemployment leaves them with no real choice. Earning less becomes preferable to earning nothing. This economic compulsion allows exploitation to appear voluntary.
India does not lack labour laws. Minimum wage notifications are issued regularly. Regulatory mechanisms formally exist. Inspection systems are legally empowered. Yet violations continue openly. Factories operate without compliance. Minimum wages remain unpaid. Working hours exceed legal limits. Government institutions often intervene only after protests erupt. Enforcement becomes reactive rather than preventive.
When institutions fail to ensure fairness, workers return to the streets — not as agitators but as citizens seeking recognition and justice. The problem is not absence of law; it is absence of political will and administrative accountability.
Under the banner of promoting “ease of doing business,” labour regulation has gradually shifted from enforcement to facilitation. The dismantling of inspection systems has unintentionally granted impunity to non-compliant employers. In many industrial clusters, legality now depends less on compliance and more on administrative discretion. Corruption, weak enforcement, and institutional silence together create an environment where violating labour laws becomes economically advantageous. Honest employers struggle. Exploitative practices flourish.
Indian workers today aspire to dignity — education for their children, healthcare security, and upward mobility. Parents enroll children in English-medium schools hoping for a better future. Urban living costs rise steadily. Social expectations evolve. However, wages remain stagnant. Economic growth has raised aspirations without ensuring income security, producing frustration instead of inclusion.
Employers frequently argue that higher wages threaten business viability. Evidence across industries suggests otherwise. Fair wages lead to: higher productivity, lower attrition, stronger domestic consumption, stable industrial relations. Living wages are not economically destructive; they are economically stabilizing.
Resistance to wage increases therefore reflects an attitudinal problem — labour is still viewed primarily as a cost rather than a partner in value creation.
If one studies the entire supply chain, a clear pattern emerges: Costs are pushed downward — through contract labour, outsourcing, and wage suppression. Profits flow upward — through executive bonuses and high salaries, financial returns, and capital accumulation. India’s inequality is not accidental. It is structured into the economic system itself. Wealth is produced at many locations but appropriated at very few.
The debate over wages ultimately transcends economics. It is a moral question. Can a society claim progress when those who build its industries cannot afford dignified living? Can economic growth be called development when prosperity remains concentrated while insecurity spreads?
Every building constructed, every product exported, and every corporate profit declared carries the invisible imprint of labour. Without human effort — physical or intellectual — wealth cannot be created. The real question before us is: what kind of society are we building when those who create wealth remain excluded from its benefits?
PS: The Feature Pic is representative.
Arvind Shrouti
“What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others.” All matter copyrighted.
The issue is the focus of capitalism- optimising returns – cutting costs where feasible (contract workers) and investing for returns – CEO salaries esops etc. communism and socialism have had their own flaws so I don’t know any real answer – even in the west lower level wages are disproportionately lower than CEO salaries!
Very well put, sir. The data suggests that post-globalization, average productivity has nearly doubled, yet the system has largely failed to translate those gains into fair improvements in workers’ incomes and living standards. In effect, a significant share of the value created by workers has not flowed back to them in the form of a decent quality of life.
KBS has rightly pointed finger at the way Capitalism functions. Answer lies in redesigning it. This is now being highlighted globally. Communism or Socialism will not solve the problem but modifying and refocusing Capitalism will. It will encompass the elements of the two ‘isms’. Progress and benefits to the larger society should be at the centre of it. Often quoted and almost never practised ‘just ratio of salaries’ at the top most and the bottom most levels must be urgently moderated. Theorising issues can wait. The solution must begin with ‘ratio’ adjustment.
Labour is still viewed primarily as a cost rather than a partner in value creation – very well articulated article Sir and so correctly stated upfront. How, now in management, can we bring about this huge attitudinal change. Sir, knowing you and your approaches, you could be the path breaker in the furure to come.
Dr Suchita Krishnaprasad wrote:
Very well expressed. A system that crushes labour cannot flourish in the long run. But in this world where greed is considered good, nobody wants to think of the long run. Maybe that’s the challenge.
We’ve socialised private gain at the cost of community interests. What we help create sustains. Whether resolved by activism, self-enlightened sacrifice or by modeling restraint for genuine consistent pro-social actions, the perceived insecurity of loss persists as the most significant psychological barrier to equity. And we’re yet to create the psychological security in sharing gains. Long haul ahead, if at all ecological systems in Nature have allowance for our species’ weaknesses. Wonder if we will see better times in our lifespans.
Why do you say “It is not a question of law “? Is it not a fact that laws and rules have been amended to replace enforcement by facilitation ?
Can we ignore the recent policy statement of the Modi government titled the Shram Shakti Neeti which extols the Manusmriti as a Foundation for labour laws ?
Yes it is administrative and political log jam & industrial lords unwillingness to pay fairly with work dignity BUT don’t forget that the most responsible chain is most corrupt / ineffective and ideologically influenced, biased rather than fair are self styled Union leaders. The double faced TU leaders sell themselves with few shillings. They can honestly / impartially play a very positive & progressive role with out violence.
Yes it is administrative and political log jam & industrial lords unwillingness to pay fairly with work dignity BUT don’t forget that the most responsible chain is most corrupt / ineffective and ideologically influenced, biased rather than fair are self styled Union leaders. The double faced TU leaders sell themselves with few shillings. They can honestly / impartially play a very positive & progressive role with out violence.
Sir, The journey continues, and your blog Iis another reminder of the growing disparity. What stands out is your fearless voice in raising these issues and being that catalyst. Salutes again. The dream of an equitable society can only be realized when we stop exploiting the weakest sections. May the voices of Arvind Shrouti and yours reach the right ears and drive change.
This is a powerful reflection – Every building constructed, every product exported, and every corporate profit declared carries the invisible imprint of labour. Without human effort ,physical or intellectual , wealth cannot be created. The real question is: what kind of society are we building when those who create wealth remain excluded from its benefits?