1991 Liberalisation Crushed Workers

The latest government data show that the 1991 economic reforms increased inequality dramatically. Factory workers, whose real wages increased at 2.3% in the 1980s, saw a mere 0.5% annual growth in their wages post-liberalisation. The share of wages in terms of value added dropped from 39% in the 1980s to just 19% in the post-reforms phase. That means the reforms not only made India’s economy more unequal but also made things worse for the working class.