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Pvt sector salaries logged slowest growth in a decade

August 21, 2019 06:25 AM

COURTESY HT AUG 21

Vineet Sachdev letters@hindustantimes.com ■
Pvt sector salaries logged slowest growth in a decade
NEW DELHI: Hit by decelerating sales growth, Indian companies are tightening spending on their wage bills. Private sector salaries recorded their worst growth in 10 years in fiscal year 2018-19. It was also the first time in seven years that the share of salaries in sales revenue came down.

These results are based on an HT analysis of the Prowess database compiled by the Centre for Monitoring Indian Economy (CMIE). Prowess has 4,953 companies which have sales and salary data for the 10 years ending 2018-19. Not all of these companies have data on number of employees. However, just 3,353 of these 4,953 companies employed 8.2 million people in 2018-19.

Nominal wage and sales revenue growth of these 4,953 companies was 6% and 9% in 2018-19. Adjusted for inflation (using the Consumer Price Index for Industrial Workers), these figures are 0.53% and 3% for salary and sales growth.

See Chart 1: Real salary and sales growth

What has led to this slump in wage growth in the private sector? Business has not been good for a long time. The companies listed in the Prowess database had negative real sales growth for four consecutive years beginning

 
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