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Jessica Durrum, a policy director with the Los Angeles Alliance for a New Economy, a pro-union advocacy group, said business leaders also issued dire warnings about the economy when previous wage increases were approved — only to be proven wrong.

Alliance for a New Economy, a pro-labor advocacy group that produced a report on that phenomenon.

He said that it was critical not only “to our economic health” but also for families, “because it influences their capacity to manage what is new in the New Economy: not least, the fact that people are living much longer than before.”

Ms Sengupta, an associate professor at Mumbai-based Indira Gandhi Institute of Development Research, told the BBC that the ongoing crisis was borne out by the fact that India's economy was operating on a "two-speed trajectory", driven by diverging performances in its "old economy and new economy".

In contrast, the new economy, defined by the boom in services exports post-Covid, experienced robust growth in 2022-23.