India’s blue-collar wage revolution

To repeat a well-worn cliché, India is best described as a land of paradoxes. For instance, although economic growth sagged in the past two years, house prices rose by 26% year-on-year (y-o-y) in the third quarter of the fiscal year 2012-13 (3QFY13), with annual increases being recorded at in the range of 20% y-o-y over the past two years. On the external account front, while a deteriorating current account deficit (CAD) is typically a feature of a country experiencing high growth, India’s CAD stood at an all-time high level of 6.7% of gross domestic product (GDP) in 3QFY13 even as the GDP growth rate fell to a low level of 4.5% y-o-y in the same quarter.

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