3P Investment Managers’ Prashant Jain says rising blue-collar incomes are expanding India’s consumer base and offsetting pressure from weaker white-collar wage growth.
Concerns around artificial intelligence-led job losses in India’s IT sector impacting consumption growth may be overstated when viewed against the scale of the country’s broader consumption economy, according to Prashant Jain.
Speaking at the Dezerv Wealth Summit in Bengaluru on May 13, Jain argued that rising incomes among India’s blue-collar workforce are creating a much larger and more powerful consumption base, even as parts of the white-collar economy face slower wage growth and hiring uncertainty.
“India is a country of 140 crore people. What is the headcount of IT services? Five million? Even if there are some job losses, maybe a million, it will not really matter,” Jain said.
“In India, there are 350 million households. Never forget the denominator in India,” he added.
Jain argued that the rapid rise in blue-collar wages should be viewed as a structural positive rather than a concern, particularly because consumption growth increasingly depends on a broader base of earners rather than a narrow white-collar segment.
“It is a cause for celebration if blue-collar is earning as much as white-collar,” he said. A year ago, Jain called attention to the fact that rise in blue-collar salaries have sharply outpaced that in white-collar jobs, explaining the slump in demand in certain consumption baskets. For instance, driver salaries in big cities now equal entry-level pay in the IT sector, he had said.
Drawing comparisons with developed markets, Jain noted that service workers such as plumbers and electricians often command high incomes overseas. He said a similar shift is now visible in urban India, where occupations such as gym trainers, yoga teachers, chefs, plumbers, electricians and drivers are increasingly earning salaries comparable to entry-level white-collar professionals.
While weak real wage growth among salaried employees may have weighed on urban consumption trends in recent years, Jain said the impact is being offset by the sheer size of India’s blue-collar workforce.
“The number of blue-collar workers in India is probably much larger than the white-collar workers. Therefore, your consumption pool, the number of consumers in India, is expanding rapidly,” he said.
Jain also argued that many blue-collar workers may now enjoy stronger effective purchasing power than white-collar employees because of lower lifestyle costs and higher savings rates.
“Probably the purchasing power of a yoga teacher or a gym trainer or a plumber is more than that of a white-collar worker because inherently they are spending less…,” he said.
The comments come amid growing global concerns around AI-driven automation and the potential impact on white-collar employment, particularly in technology and outsourcing industries where India has historically been a major beneficiary.