As per the 2016 Salary Budget Planning (Q3) report by Willis Towers Watson, a global advisory, broking and solutions company, salaries in India is expected to increase by 10% in 2017 which is same as the actual increase in 2016. 

 

When average inflation for India which is 5.7% is taken into account, this expected salary increase in real terms for next year will be 4.3%. 

 

The report also suggests that star performers will be attracting much more increments as such employees are on companies' priority list. Due to the tighter salary increase budget, companies are prioritising their top performers.  

 

The report indicates that 38% of the salary increase budget will go to the top performers. Another 34% will be shared by the above-average performers and the remaining 28% will go to average performers. 

 

Sambhav Rakyan, Data Services Practice leader, Asia Pacific, at Willis Towers Watson said, "The data clearly shows a greater emphasis on rewarding high performers rather than across-the-board increases for all workers. Without such differentiation, companies will face pressure in attracting and retaining talent, especially for in-demand areas." 

 

It has to be noted that salaries were projected to rise 10.8% in 2016, but in reality rose just 10% - the second time below projected increases since 2015.

 

"If that pattern continues in 2017, Indian employees could see a single digit salary increase for the first time since 2011," the report said.

 

When compared to developed and key emerging markets in the region, India's 2017 projected salary rise is the highest.

 

Salaries in developed markets such as the US and the UK are projected to increase by 3%.

 

In terms of sector, pharmaceutical continues to project higher salary increases as compared to most other sectors at 11%, while the finance sector will likely remain well below average at 8.5%.

 

The expected salary increase in the high-tech sector is likely to be the same as the previous year at 10% in 2017.

 

The 2016 Asia Pacific Salary Budget Planning Report is a bi-annual survey compiled by Willis Towers Watson's Data Services Practice. The survey was conducted in July 2016. Around 4,000 responses were received from companies across 22 markets in Asia Pacific.