India's workers get biggest pay rise

By siliconindia   |   Tuesday, 06 November 2007, 20:30 IST
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Mumbai: The employees of Indian companies are powered with the biggest salary increases in the world, according to a survey that is likely to fuel concerns over wage inflation in one of the fastest growing economies, reported The Business-Standard (BS). It is estimated that Indian employees have received an average salary increase of 14 percent this year. The rate is expected to be maintained with 2008 settlements forecast to average 15 percent. That compares with an anticipated annual inflation rate of 5.7 percent this year and 5.4 percent in 2008. The survey, which was conducted over two months by Towers Perrin, a human resources advisory company covered more than 4,000 companies worldwide. The survey revealed that Indian salary raised virtually across the board, from executive to production floor, far outstripping those in China, the other powerhouse of the Asian economy. This year, Chinese employees are heading for salary hike of eight percent and nine percent in 2008, based on projected annual inflation of 3.6 percent and 3.5 percent. The findings back growing evidence in India that management compensation here is now on a par with and sometimes higher than the global average, excluding the high-profile packages common in the U.S. or UK. The rise in Indian salaries comes amid growing concerns about a shortage of qualified staff, partly in information technology, a sector whose growth has made it one of the main engines of the Indian economy. Microsoft's Indian operation has also warned that a lack of computer science PhDs could threaten India's future as the world's IT services outsourcing hub.