India Inc Sees 14.3% Jump In Salary Bill In FY23

New Delhi, Oct 3 (KNN) The total salary bill of India Inc went up by a 14.3% to about Rs 9.4 trillion in FY23, as per a latest study.

This is the fastest increase in 10 years and moreover the average salary in the organised sector rose by nearly 10%, an eight-year high and much above the rate of retail inflation in the country.

A study of 7.5 million employees across 1,800 listed entities by Jefferies revealed the increase has happened on the back of substantial pay hikes by the IT sector. Excluding for salaries in the IT sector, the rise in pay packets drops to 6.8%, which is in line with the 10-year average.

The estimated increase in salaries per employee is even higher at an effective 15.6%, also an eight-year high, when the data is adjusted for the recruitment of juniors and retirees.

In absolute terms, the numbers employed rose by a reasonably good 4% to 7.5 million, on the back of a 7% increase in FY22, a year in which the economy had not fully recovered from the effects of the pandemic.

The study by analysts at Jefferies showed that the deceleration in hiring by IT firms was by and large offset by more recruitment in the BFSI (banking, financial services and insurance) space. 

The headcount in this sector went up by 8% whereas the increase for the IT sector, was 6%. Between them, the two sectors contributed about 85% to the incremental jobs created in the year. Interestingly, the analysis showed that state-owned undertakings continued to shed jobs in FY23.

The rising incomes and the employment will boost consumption demand in the coming quarters, economists point out. While the significantly better growth in private consumption in the June quarter of 6% y-o-y compared with just 2.8% seen in the March quarter, was partly the result of easing inflation, fatter pay cheques have also helped. The growth in CPI inflation moderated to 6.83% y-o-y in August from a 15-month high of 7.44 % in July.  (KNN Bureau)