Salaries in India are projected to rise the highest in the world next year—7.3 percentage points above inflation—according to a recent survey by Mercer Human Resource Consulting, an employee benefits consultancy and services provider.

The survey also ranks Egypt and Lithuania to have the next highest increase, where employees are expected to receive pay rises of 7.1 and 5.5 percentage points above inflation, respectively.

The average pay in seven of the 10 countries surveyed including the U.K. and the U.S., is predicted to increase between 1 and 3.5 percentage points above inflation. Globally, salary increases are expected to be higher next year than they have been in 2005.

The average pay rise is expected to be 2.4 percentage points above inflation, compared with 1.9 percentage points this year. The study also predicts that some countries would experience rises that would be higher than double the global average.

Mercer’s Global Compensation Planning Report examines employment and pay trends in 70 countries. Data on projected pay are taken from a survey of multinational companies and inflation data from the International Monetary Fund and the Organization for Economic Co-operation and Development.

Last month, Hewitt Associates, another human resources firm, projected India as the runaway leader across the Asia-Pacific region in rewarding its workforce in 2006 with an average increase of 14 percent in salaries. According to the figures projected for the next year in the preliminary results of the annual Asia-Pacific Salary Increase Survey for 2006 conducted by Hewitt Associates, India is expected to maintain the lead.

In 2004, the average salary increase in the country is reported to be at 13.7 percent—the highest in the region. The increase was attributed to a rise in inflation during the year. China is seen as a distant second, with 8.1 percent, and shares the position with the Philippines. Japan was the most parsimonious of the lot, doling out just 2.8 percent increase in employee salaries–the lowest in the region.