Fatter pay packets, more jobs for India Inc this year

Fatter pay packets, more jobs for India Inc this year
Calcutta Telegraph - Calcutta,India

GARIMA SINGH
Good times are here again

New Delhi, Feb. 9: The economy is booming; and industry is reporting robust growth this year. As India Inc rakes in the moolah in 2004-05, there are signs that pay rises at the end of this year could be handsome in several sectors.

A study by Hewitt and Associates said India had the best average pay increase in the Asia-Pacific region in 2004 at 13.7 per cent. Its forecast for 2005: the entertainment, communications and publishing sector will see the highest salary growth of 15.4 per cent.

Does India Inc concur with the findings of the ninth annual survey put out by the global consultancy?

“We have seen a lot of downsizing in the automobile industry in the past. Considering that the sector has achieved a double-digit growth, overall employment generation will go up. However, this will not be in proportion to production and sales. Pay rises will go up on the finance and marketing side,” says Rahul Bajaj, chairman and managing director of Bajaj Auto Ltd.

Ramesh C. Jain, chief executive officer of Eicher Tractors, is more forthcoming. “In the automotive industry, salary increases could be in the region of 6 to 20 per cent for senior management. High performers with promising potential can expect an excellent increase of 20 per cent over last year. At the middle and junior management level, pay hikes may vary from 6 to 15 per cent,” he says.

“I don’t see a large number of recruitment at the very senior level. At the lower levels, fresh blood will always make for a better tomorrow,” adds Jain.

N. Srinivasan, director general of the Confederation of Indian Industry (CII), says, “The economy will continue to see robust growth in 2005. Due to global economy doing well, we feel salary hikes will be good, especially in the manufacturing and services sector.”

B. D. Narang, chairman and managing director of Oriental Bank of Commerce, reckons that “the white-collared jobs will see sharp increases in salary. This will be in the region of 13 per cent or more. However, the maximum recruitment will take place in IT, steel, textiles and infrastructure.”

Arun Bharat Ram, vice-chairman and senior managing director of SRF Limited, isn’t sure that the surge in the manufacturing sector — the Central Statistical Organisation (CSO) is projecting an 8.9 per cent growth in 2004-05 against 6.9 per cent last year — will translate into massive pay rises. “There will be some increase in employment generation given the way that the demand and supply equation is poised. While I can’t say about salary hikes in other sectors, it will definitely be below 10 per cent in the manufacturing sector this year.”

Biotech diva Kiran Mazumdar-Shaw, who heads Biocon India and is reputed to be the richest woman in India, says: “The life sciences sector is projecting huge employment generation. It will recruit about a million people by 2010. However, the pay package might not increase significantly at least for the next 2-3 years, until the industry matures.”

The consumer durables and the financial sectors are, however, expecting to see some sharp pay increases this year. Says Rajeev Karwal, CEO of Electrolux Kelvinator Limited: “Pay slips in consumer appliances and durables sector may rise by 4 to 20 per cent. However, on the employment generation side, the maximum recruitment will take place in sales followed by marketing. Head counts may, therefore, go up by 10-15 per cent.”

S. Krishnamurthy, managing director and CEO of SBI Life Insurance, said: “Wage levels in this industry will grow 10-15 per cent on a year-on-year basis. Since, it is a sunrise sector, both direct and indirect employment generation will also happen. In the private insurance industry, head counts will go up by as high as 25 per cent over the next two to three years.”

The housing finance business can also look forward to fatter wallets. Says Renu Sud Karnad, executive director of HDFC: “Clearly, the information technology sector will be the leader both in employment generation and salary hikes. As for the housing finance industry, the banks who hire people to sell home loans can hope for an increase of 15 to 16 per cent in their pay slips in 2005 over the last year.”

However, not everyone seems so optimistic. Onkar Kanwar, chairman and managing director of Apollo Tyres, says, “The time has now come to set up greenfield projects. This will increase production. However, salaries in 2005 might only increase by 1 per cent.”