While the salary earners have every reason to rejoice, their employers may be feeling a trifle uncomfortable. Assocham's (Association of Chambers of Commerce of India) latest survey has found that the staff cost of India Inc is increasing at a faster rate than the growth in net profit and total income.

While the net profit of 100 companies, tracked by the chamber's Eco Pulse analysis of the second quarter results, went up by 18 per cent, income was up 20 per cent, salaries rose 22 per cent.

However, this comes as no surprise, as according to the 9th annual salary increase survey by Hewitt, India had the best average pay increase in the Asia-Pacific region in 2004 at 13.7 per cent, and the party is expected to continue in 2005 with an expected hike of 14.2 per cent.

Predictably, the information technology and the IT-enabled services sector led the pack in the Assocham survey, with a 36 per cent increase in staff costs against a bottomline growth of 29 per cent and topline rise of 30.5 per cent.

The trend is worrying quite a few in India's IT outsourcing industry, which has thrived so far because of the low employee costs in the country.

Besides, countries like the Philippines, China and Vietnam have already started eroding India's competitive advantage on this account.

The remaining part of the article can be read at http://in.rediff.com/money/2005/nov/04guest.htm

Bye

Meera