Indian employees are likely to witness their monthly paycheck getting a bigger boost next year compared to 2020 as companies are betting on higher consumer demand due to enhanced government spending and bumper rainfall to neutralize the pandemic-led economic contraction, a survey showed.
Companies, spanning sectors including e-commerce, energy, financial institutions and pharmaceuticals, are projected to increase compensation by an average 7.3% in 2021 compared to 6.1% -- lowest since 2009 -- this year, Aon said in the survey released Wednesday. Around 87% companies are planning pay hikes compared to 71% in 2020.
The marginal increase in the forecast comes amid data from car sales and tax collections to factory output suggesting that a recovery in Asia's third-largest economy is underway. India is facing the biggest contraction among major emerging markets after the country was locked down to check the spread of the pandemic in March.
A good rainfall and stimulus-led retail spending are the primary reasons for tailwinds in salary increments, Navneet Rattan, director, Performance and Rewards Solutions practice, India, told reporters.
"The impact of COVID-19 has been varied on different sectors and organizations. We see high differentials in salary increases - both intra and inter-industry," Mr Rattan said.
Industries likely to provide the highest salary increases include technology, life sciences, e-commerce, chemicals and professional services while companies in sectors such as hospitality, retail and real estate -- severely battered by the pandemic -- are projecting an increase but trail other sectors, the survey said.
The survey covered more than 1,000 companies across over 20 industries, with two-third aiming to provide similar or higher increments in 2021.
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