Recruiters have opined that employees in India will see bigger pay rises next fiscal year as firms expect to emerge from lockdown.
According to an exclusive report by Bloomberg, monthly salaries could rise about 8 per cent in the financial year starting April 2022, especially if authorities avert a third wave of the virus. That’s higher than the 6%-8% surveys predicted for the current year.
The e-commerce, pharmaceutical, information technology and financial services sectors are predicted to offer relatively larger salary hikes in India, while retail, aerospace, hotels and hospitality will take some time to recover.
Meanwhile, after the implementation of the new wage code, it is being estimated that the take-home salary of the employees will decrease. However, there is also a discussion that the basic minimum salary of the employees may be increased.
According to the new Wage Code rules, the basic salary of the employees should be 50 per cent of the total salary or the Cost to Company (CTC). At present, most companies keep the basic salary of the employees low and the number of allowances remains high.
The Finance Ministry has recently issued an order to implement the Union Cabinet decision to hike Dearness
Allowance (DA) for central government employees from July 1. After over one-and-half-year, the Union government has increased the Dearness Allowance and Dearness Relief (DR) of central government employees and pensioners. The move comes at a time when retail inflation has remained over 6 per cent for the two straight months. The surge in allowance will help millions of beneficiaries to cope up with rising food and oil prices amid corona virus pandemic.
The DA payable to central government employees shall be enhanced from the existing rate of 17 per cent to 28 per cent of basic pay. The increase subsumes the additional installments arising on January 1, 2020; July 1, 2020, and January 1, 2021,” said the department of expenditure under the finance ministry.
As the dearness allowance is linked to the basic salary, a hike in DA will also raise the monthly provident fund (PF) and gratuity amount of the central government employees. So, PF, Travel Allowance and gratuity will go up for the employees and the pensioners.