Manya Rathore
Research expert covering India
Wages and salaries in India - statistics and facts
In a country with an employed workforce of over 500 million, remuneration is a crucial indicator for inclusive economic growth in India. Even though the country has successfully curbed the share of multidimensional poor from 25 to 15 percent between 2016 and 2021, it is one of the leading countries with high income and wealth inequality.
A testimony to this lies in the fact that post-pandemic, the annual incomes of the poorest 20 percent of households in India shrank by more than 50 percent. On the other hand, incomes of the richest 20 percent increased by almost 40 percent. However, the gap narrowed down in 2023. Given the high level of segmentation in the formal and informal sector, there is a wide range of wage rates based on industries, regions, sectors, and gender.
Apart from the sectoral wage gap, a wide gender gap persists. In 2022, women agricultural field laborers earned 68 rupees less than their male counterparts per day. However, the gap widens as women move up the corporate ladder. As per estimates, women, who are part of key management personnel are paid roughly half the amount of their male counterparts. Despite notable progress, there is still a long way to go to close the gender wage gap.
The IT services industry has also consistently been the highest-paying sector for CEOs in India. Although IT offers higher worker salaries as compared to other sectors, a wide pay gap exists between the CEO pay as compared to the median remuneration at leading IT companies. Between 2012 and 2022, IT CEO’s salaries rose by 835 percent, whereas the freshers’ salaries rose by a little over 45 percent. However, salary growth remains a bright spot. The country led the Asia-Pacific region in terms of salary growth in 2023 and the trend is expected to continue in 2024.
Behind low pay and wage gap
Most laborers in the country are still engaged in low-productive sectors is a key reason for unequal income distribution. This includes agriculture, followed by other low-productivity sectors like construction, trade, hospitality and food services. India’s economic paradox lies in that almost half of the country’s population is employed in agriculture and allied sectors, but their contribution to the nation’s GDP remains low. This means too many people are employed in a sector that creates too little wealth. Despite low wages in the agricultural sector, India’s labor force is shifting from cities to farms due to a lack of factory job creation and adequate education. Most of India’s workforce is self-employed, especially in agriculture. The government defines self-employment as becoming “own account worker and employer” or “helper in a household enterprise”. The latter is often referred to as a euphemism for unpaid workers.Apart from the sectoral wage gap, a wide gender gap persists. In 2022, women agricultural field laborers earned 68 rupees less than their male counterparts per day. However, the gap widens as women move up the corporate ladder. As per estimates, women, who are part of key management personnel are paid roughly half the amount of their male counterparts. Despite notable progress, there is still a long way to go to close the gender wage gap.
Digital landscape fuels high-paying jobs
In addition to traditionally lucrative sectors like BFSI (Banking, Financial Services, and Insurance), and medicine, professionals at the forefront of innovation and shaping the digital landscape of the country are in huge demand and highly paid in the country. This includes positions like Data Scientist, Blockchain developer, Machine learning expert, AI engineer, Software developer, and others.The IT services industry has also consistently been the highest-paying sector for CEOs in India. Although IT offers higher worker salaries as compared to other sectors, a wide pay gap exists between the CEO pay as compared to the median remuneration at leading IT companies. Between 2012 and 2022, IT CEO’s salaries rose by 835 percent, whereas the freshers’ salaries rose by a little over 45 percent. However, salary growth remains a bright spot. The country led the Asia-Pacific region in terms of salary growth in 2023 and the trend is expected to continue in 2024.
