{"id":239641,"date":"2025-07-05T08:32:00","date_gmt":"2025-07-05T08:32:00","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/239641\/"},"modified":"2025-07-05T08:32:00","modified_gmt":"2025-07-05T08:32:00","slug":"the-great-indian-salary-crisis","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/239641\/","title":{"rendered":"The Great Indian Salary Crisis"},"content":{"rendered":"

\"\"<\/p>\n

Each month begins with hope and ends with compromise. In Noida, a software engineer watches EMIs pile up while stress-related ailments creep in, until she finally quits her job. In Delhi, a public relations executive juggles rent and groceries, praying her landlord doesn\u2019t raise the rent again. In Chennai and Ahmedabad, a techie and a young professional wrestle with ballooning costs after what once felt like promising salary hikes. In Nashik, a 26-year-old anxiously waits for his next job opportunity, even as savings dwindle and replies don\u2019t come. And in Pune, rising rents chip away at an IT engineer\u2019s paycheck, month after month.<\/p>\n

\"\"<\/p>\n

These are the everyday struggles of white-collar employees in India. Professionals are caught in a salary spiral where costs keep climbing, pay moves slowly, and financial stability slips further away.<\/p>\n

On paper, the economy is booming. India is the world\u2019s fastest-growing major economy, with steady GDP growth, soaring corporate profits, and a bullish stock market. But the paycheques of working middle-class Indians tell a very different story\u2013one of financial strain, dwindling savings, and rising dependence on debt.<\/a><\/p>\n

\"\"<\/p>\n

\t\t\t\t\t\t\t SALARY HIKE ILLUSION \t\t\t\t\t\t\t <\/p>\n

For many professionals, salary hikes arrive too late or fall too short to make a difference.\u00a0<\/p>\n

Kratika Sharma, a software engineer in Noida in her 30s, knows the feeling all too well. \u201cMy last hike came in August 2024, almost a year late. By the time my salary is credited, I\u2019m already using it to clear dues from the previous month,\u201d she says.\u00a0<\/p>\n

Her relocation brought better job prospects but also steeper costs. \u201cEarlier, I was living at home. Now, between rent, food, and other expenses, I\u2019m barely able to save anything.\u201d<\/p>\n

Education loans and credit card EMIs are a constant squeeze. \u201cIt\u2019s depressing,\u201d she adds. \u201cI\u2019ve had stress-related health issues like cervical pain and hormonal imbalances.\u201d\u00a0<\/p>\n

\"\"<\/p>\n

Eventually, she quit her job without another offer in hand. \u201cThere was no financial growth. And professionally, the company couldn\u2019t retain seniors I could learn from.\u201d Even leaving wasn\u2019t easy. \u201cCompanies want candidates who can join in 15 days or less. That makes switching even harder.\u201d<\/p>\n

Susmita Pakrasi, 34, who works in communications in Delhi, left journalism for better pay, but stability remains elusive. \u201cI earn more on paper now,\u201d she says, \u201cbut between rent, groceries, my EMI, and healthcare, I feel poorer than I did five years ago.\u201d<\/p>\n

The stress is as emotional as it is financial. \u201cEarlier, financial security meant being able to save and occasionally splurge. Now, it means being able to manage basic expenses, pay EMIs, and still have a cushion for emergencies,\u201d she says. \u201cIt\u2019s hard to stay motivated when financial anxiety builds in the background.”<\/p>\n

\"\"<\/p>\n

\t\t\t\t\t\t\t BIGGER PROFITS, SMALLER PAYCHEQUES \t\t\t\t\t\t\t <\/p>\n

India Inc. continues to reward its shareholders generously, and its top brass are riding a wave of soaring pay. But for employees lower down the ladder, even a modest increment feels increasingly out of reach.<\/p>\n

Aon\u2019s 2024\u201325 Salary Increase and Turnover Survey, covering over 1,400 companies, projects an average salary hike of 9.2% this year. That\u2019s a slight dip from 9.3% in 2024 and well below the post-pandemic high of 10.6% in 2022. The modest rise comes despite healthy profit margins and top-line growth.<\/p>\n

\"\"<\/p>\n

While attrition has declined from 21.4% in 2022 to 17.7% now, it isn\u2019t necessarily a sign of happy workers. If anything, it points to a workforce stuck in place \u2014 professionals who want to move up or move out but feel like they can\u2019t.<\/p>\n

\"\"<\/p>\n

That sense of being undervalued runs deep. A survey by job portal foundit (formerly Monster APAC & ME) found that nearly half of over 5,000 salaried professionals across different sectors, experience levels, and functions believe they are underpaid. Only 28% say they\u2019ve seen meaningful salary growth in the last three years. For the rest, any gains were eaten away by inflation.<\/p>\n

And that erosion goes deeper than official numbers suggest. \u201cOver the last two decades, inflation has been a weak determinant of pay growth,\u201d says Anandorup Ghose, Partner at Deloitte India. \u201cEconomic performance, organizational profitability, and competitiveness within an industry have been far stronger drivers.\u201d<\/p>\n

He adds that India faces a persistent mismatch between measured and perceived inflation. \u201cFelt inflation is usually significantly higher than the officially quoted CPI figures. Companies try to stay ahead of headline inflation, but rarely match the inflation employees actually experience.\u201d<\/p>\n

Data backs up this stagnation. \u201cThe Economic Survey showed the decline in real wages since 2017\u201318 for salaried employees,\u201d says Anandorup Ghose, Partner at Deloitte India. \u201cInternational Labour Organisation (ILO) data places India in the bottom quartile among 130 countries in terms of real wage growth.\u201d<\/p>\n

\"\"<\/p>\n

And while headline figures may suggest decent average hikes, the distribution tells another story.<\/p>\n

\u201cNot everyone receives the same level of salary increase anymore,\u201d says Sonica Aron, founder of HR consultancy Marching Sheep. \u201cIndividuals in tech or analytics roles get better raises, but others don\u2019t.\u201d<\/p>\n

Recruiters see this firsthand. \u201cCompanies are being more selective. Many now offer performance-linked hikes or skill-based incentives,\u201d says Priyanka Bisht, partner at Tejomaya Ventures LLP. \u201cBut for many roles, especially at the entry and mid-levels, base pay just hasn\u2019t grown much.\u201d<\/p>\n

\"\"<\/p>\n

On top of flat salary bands and mounting expenses, many professionals also feel short-changed by the tax system. \u201cEven a small change in tax slabs or standard deductions can give middle-income earners real breathing space,\u201d says Bisht. \u201cFrom what I\u2019ve seen in my experience, the middle class is often caught in a tough spot. They are educated, employed, and hardworking, but their income doesn\u2019t always match the rising cost of living.\u201d<\/p>\n

Siddharth Jain, a financial advisor and co-founder of MinEMI, agrees. \u201cThere should be tax relief beyond Rs 7 lakh,\u201d he says, suggesting CPI-linked PF and gratuity adjustments, along with subsidies for housing, childcare, and transport. \u201cWage-linked ESOPs or inflation-indexed bonuses could also help sustain purchasing power.\u201d<\/p>\n

\"\"<\/p>\n

\t\t\t\t\t\t\t DEBT IN, SAVINGS OUT \t\t\t\t\t\t\t <\/p>\n

Even those who received pandemic-era salary bumps are now feeling the pinch. Chennai-based tech professional Shafeeque Suhail says, \u201cThat post-Covid hike helped me start investing, but rising medical costs, rent, and life changes have made financial stability harder to hold on to.”<\/p>\n

The How India Spends report by Perfios and PwC India finds that salaried Indians now allocate over a third of their income to EMIs. Another 39% goes to essentials, leaving just 29% for everything else.<\/p>\n

\u201cA mid-level employee earning Rs 90,000 in 2015 might now earn Rs 1.5 lakh. But essentials like rent, school fees, and insurance have seen 40% plus inflation,\u201d says Jain.<\/p>\n

\"\"<\/p>\n

That squeeze is showing up in national trends, too. A recent CareEdge Ratings report noted that household savings fell to 18.1% of GDP in FY24, the lowest since FY2017. Gross domestic savings also declined to 30.7% of GDP, down from 32.2% in FY15.<\/p>\n

\"\"<\/p>\n

Meanwhile, household financial liabilities surged to 6.2%, nearly doubling over the past decade \u2014 a clear sign that more Indians are relying on credit to fund basic consumption.<\/p>\n

For Ahmedabad-based Priyanka Deb Sarkar, rising costs have steadily outpaced her income. \u201cIn five years, my expenses have doubled. I bought a car, shifted to a more expensive rental, and took on a home loan. Marriage also changed the equation. While my income has grown, I\u2019ve barely been able to save in recent months,\u201d she says.<\/p>\n

Her credit card dues have risen sharply. \u201cPaying them back has become difficult. I haven\u2019t had to cut back drastically, but the savings have shrunk.\u201d<\/p>\n

\"\"<\/p>\n

\t\t\t\t\t\t\t JOBS, BUT FOR WHOM? \t\t\t\t\t\t\t <\/p>\n

India\u2019s economy grew 6.5% in FY25<\/a> and is set to retain its position as the fastest-growing major economy in FY26<\/a>. But the average salaried employee isn\u2019t feeling it. Hiring is still happening, but only in niche areas like AI, analytics, and cybersecurity. For everyone else, the job market feels fragmented and unforgiving.<\/p>\n

\u201cIndia\u2019s salaried professionals have experienced low single-digit or even stagnant real wage growth over the past decade,\u201d says Dr Vidya Mahambare, Professor of Economics at Great Lakes Institute of Management. \u201cAI is replacing many skill sets. During high-growth years, skill scarcity created wage premiums. That\u2019s no longer the case.\u201d<\/p>\n

\"\"<\/p>\n

Several sectors are now dominated by a few large firms, marking a shift toward oligopolistic structures. \u201cAnd when such firms wield monopsony-type power in the job market, they get an upper hand in salary negotiations,\u201d Mahambare explains.<\/p>\n

\"\"<\/p>\n

Even though wage growth may appear to outpace inflation on paper, experts warn against drawing comfort from averages. \u201cThe structural wage crisis is evident as voluntary attrition has been hovering in the range of 15\u201320%,\u201d says Dr Kirti Sharma, Associate Professor \u2013 Accounting and Finance at Great Lakes Institute of Management. \u201cEmployees feel their compensation doesn\u2019t match their contribution value.\u201d<\/p>\n

She notes that while some recent budget measures, like raising the basic exemption limit, are welcome, deeper relief is needed. \u201cMore meaningful deductions for healthcare, education, and housing costs are urgently required. The new tax regime, too, can incorporate these.\u201d<\/p>\n

A 2025 IIM-Ahmedabad survey found that six in ten executives believe AI will significantly displace white-collar roles within five years<\/a>. That shift is already underway. The ILO estimates that nearly 70% of existing jobs in India are at high risk of disruption due to automation and AI.\u00a0<\/p>\n

Meanwhile, a Bank of Baroda research suggests that 20 to 25 million jobs could be displaced by 2030, especially in IT services, customer support, retail, and finance<\/a>.<\/p>\n

\"\"<\/p>\n

Globally, tech giants like Google and Microsoft have already begun cutting jobs<\/a> as they pivot toward AI-led efficiencies. In India, major IT and tech firms are following suit, laying off employees as part of wider cost-cutting efforts.\u00a0<\/p>\n

A CareEdge report shows labour cost growth for large IT companies fell sharply, from 26% in Q3FY23 to just 4% in Q3FY25<\/a>. The message is clear: companies are streamlining in preparation for an AI-heavy future.<\/p>\n

Suhail feels it firsthand. \u201cI have the skills. I work hard. But between AI anxiety and rising costs, it\u2019s like the ceiling is getting lower every year.\u201d<\/p>\n

\u201cWhile the cost of living affects every household, most companies don\u2019t offer salary hikes that beat inflation,\u201d Aron adds. Dr Sharma notes, \u201cIndia had 6.1% inflation but 10.2% hikes. But even here, only some employers factored inflation into compensation decisions.\u201d<\/p>\n

\"\"<\/p>\n

\t\t\t\t\t\t\t SURVIVAL IS THE NEW SUCCESS \t\t\t\t\t\t\t <\/p>\n

For workers earning Rs 50,000 to Rs 1,00,000 a month, life isn\u2019t about aspirations anymore, especially if they are based in tier-1 cities. It\u2019s about staying afloat. And this isn\u2019t lifestyle inflation<\/a>. It\u2019s survival inflation.<\/p>\n

\u201cFive years ago, a 1-BHK near IT parks in Pune cost Rs 12,000 to Rs 15,000. Today, it goes for Rs 20,000,\u201d says Shital Karnani, an IT engineer in Pune. \u201cI expected more growth after working this hard.\u201d<\/p>\n

The Home Credit India Wallet Study from 2024<\/a> pegs the average income of India\u2019s lower-middle class at Rs 33,000. In metros, it hovers near Rs 35,000. In Hyderabad, it touches Rs 44,000, but even that barely covers rent and groceries.<\/p>\n

Promotions often offer no escape. \u201cMy expenses are three to four times higher than they were five years ago,\u201d says Nandita Talukdar, a former corporate worker turned entrepreneur. \u201cThere was no significant change in savings or liquid cash.<\/p>\n

\"\"<\/p>\n

Living in Delhi with her partner, even a modest lifestyle feels out of reach. \u201cBuying a house feels nearly impossible now,\u201d she says. \u201cSame with cars. You can buy one, but maintenance is super expensive.\u201d<\/p>\n

She\u2019s now debt-averse. \u201cI once used a credit card, but it became a headache.\u201d<\/p>\n

\"\"<\/p>\n

Minimal hikes eroded motivation. \u201cIt\u2019s one of the biggest reasons attrition is so high,\u201d she says. \u201cI\u2019ve recently taken a conscious call to take a break from my job and begin my entrepreneurial journey.\u201d<\/p>\n

\u201cBecause loans, EMIs, and buy-now-pay-later options are available, many people are managing their expenses,\u201d says Bisht. \u201cBut this hides the real issue that incomes are not growing fast enough.\u201d She believes government and corporate policies must go beyond headline GDP growth and address realities by rewarding skill upgrades, ensuring portable social security, and creating quality jobs outside the metros. \u201cThat feeling of protection improves both morale and spending capacity,\u201d she says.<\/p>\n

And for some, the ongoing crisis has meant complete stasis.\u00a0<\/p>\n

Saurabh Pingalkar, 26, worked with the government\u2019s Tele MANAS mental health project at NIMHANS. Since early 2024, he\u2019s been jobless. \u201cYou send in your resume, you\u2019re asked to wait, and then everything fades into silence,\u201d he says. \u201cI\u2019ve had to dip into savings, cancel personal plans.\u201d<\/p>\n

His biggest fear? \u201cReaching a point where I stop believing in myself. The uncertainty is hard, but the fear of being unseen is worse.\u201d<\/p>\n

\u201cWe are real people, often skilled, motivated, and eager to contribute. If you can\u2019t offer a job, at least offer clarity,\u201d he says.<\/p>\n

\"\"<\/p>\n

\t\t\t\t\t\t\t A SILENT CRISIS \t\t\t\t\t\t\t <\/p>\n

Salary stagnation is quietly becoming one of the biggest threats to India\u2019s economic momentum.<\/p>\n

For all the talk of GDP highs and stock market rallies, wage growth for working Indians has barely kept up with inflation. This mismatch isn\u2019t sustainable. When salaries stall, so does spending. And when spending slows, the entire consumption engine that drives India\u2019s economy starts to sputter.<\/p>\n

Credit card defaults are rising. Savings are at historic lows. And the psychological toll of working harder without moving forward is quietly reshaping the workforce.<\/p>\n

If real incomes continue to stagnate, India\u2019s much-celebrated demographic dividend could weigh down India\u2019s economic ambitions. A salary crisis left unaddressed doesn\u2019t just dim household futures and dreams. It puts the brakes on national growth.<\/p>\n

Credits<\/p>\n

x<\/p>\n

Development : Mankeshwar and Naeem<\/p>\n","protected":false},"excerpt":{"rendered":"Each month begins with hope and ends with compromise. In Noida, a software engineer watches EMIs pile up…\n","protected":false},"author":2,"featured_media":239642,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[93248,51,93240,93242,1700,93244,93243,93239,93250,93246,93238,93236,93245,16,15,93241,93249,93237,93247],"class_list":{"0":"post-239641","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-ai-and-white-collar-jobs","9":"tag-business","10":"tag-cost-of-living-india","11":"tag-economic-inequality","12":"tag-economy","13":"tag-emi-burden","14":"tag-india-job-market-2025","15":"tag-indian-middle-class-crisis","16":"tag-middle-class-debt-trap","17":"tag-pay-vs-inflation","18":"tag-real-wage-growth","19":"tag-salary-stagnation-india","20":"tag-shrinking-savings","21":"tag-uk","22":"tag-united-kingdom","23":"tag-urban-affordability-crunch","24":"tag-urban-survival-inflation","25":"tag-white-collar-financial-stress","26":"tag-youth-unemployment-india"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114799703258841188","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/239641","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=239641"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/239641\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/239642"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=239641"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=239641"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=239641"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}