Raghav Chadha, the Aam Aadmi Party (AAP) Rajya Sabha member, has ignited a fierce debate in Parliament, advocating for an 'Inflation Linked Salary Revision Act' to shield salaried Indians from eroding purchasing power. Between FY18 and FY26, real wages for these workers plummeted by 16 per cent as salary hikes failed to match soaring inflation, turning economic growth into a personal pay cut for millions.
Wage erosion crisis exposed
Chadha highlighted how inflation silently strips salaried earners of hard-earned gains, with pay revisions lagging far behind rising costs. While government employees enjoy Dearness Allowance hikes and Pay Commission protections, 85% of India's formal private workforce lacks any statutory buffer, relying solely on employer goodwill or individual bargaining power.
Global models for India to follow
Other nations offer blueprints for reform: the US employs Cost of Living Adjustments (COLA) for automatic revisions, Germany mandates wage updates every 18-24 months, Japan's annual Shunto system ties raises to inflation, and Belgium enforces quarterly indexation. Chadha argues India must enact similar laws mandating minimum wage increases pegged to inflation indices to restore fairness.
Raghav Chadha's bold Parliamentary push
Raising the issue in Parliament, Chadha declared inflation should never act as India's "silent pay cut," demanding statutory protections for all formal workers. This call gains urgency amid FY26's economic pressures, positioning the proposed Act as essential for equitable growth and worker dignity in the world's fastest-growing major economy.