However, not all industries will experience a cut in wage increases. Some sectors, including hospitality, travel, tourism, consumer goods/FMCG and energy, are outperforming others and will give employees better pay increases than FY22, according to data from about 300 companies, most of which are multinationals.

Service sectors, which have been hardest hit during the pandemic, will see larger increases as they benefit from the opening up of the economy.

In contrast, tech companies, which peaked during the pandemic as the world went online, are forecasting a drop in wage increases, reflecting the global tech slowdown. “Wage increase forecasts are trending down compared to FY22 as demand for talent wanes in certain sectors and more importantly, for certain skills,” Anandorup Ghose, partner at Deloitte India, told ET. “However, not every sector will see a reduction in wage increases. So while on average there may be a 50-75 basis point (basis point) drop in pay rise forecasts compared to actual FY22 figures, a single figure does not largely reflect the differing realities across industries.”

Across tech subsectors, there is a 40-80 basis point fall in FY23 pay rise forecasts compared to actual FY22 numbers. One basis point is 0.01 percentage point.

Information technology products companies are forecasting increases of 11.3% in FY23 compared to 12% in FY22, while IT services are forecast to be at 8.8% compared to 9.4% in FY22. IT- Third-party services will be at 7.8% in FY23 versus 8.7% in FY22, while in-house services are expected to see a smaller decline to 10.4% in FY23 versus 10.5% in FY22.

In the service sectors, wage increases are forecast at 9.4% in FY23, compared to 8.9% in FY22. Wage in the hospitality, travel and tourism sectors is expected to rise by 9.6% in FY23 , compared to 8.5% in FY22, although retail is widely expected to remain flat at around 8.0%.

The Consumer Goods/Fast Moving Consumer Goods (FMCG) segment recorded growth of 9.8% in fiscal year 23 compared to 9.0% in the previous fiscal year.

Total manufacturing is expected to decline from 10.2% in FY22 to 9.8% in FY23. However, in segments such as electricity – conventional and renewable energies – an increase in the remuneration budget is expected. Renewable energy is expected to increase from 9.6% to 11%, while conventional energy is expected to increase from 9% to 9.5%. The pharma sector is expected to remain broadly flat at 8.9%, little changed from 9.1% in FY22

The data was compiled to assess sentiment toward pay rises. Companies that started the compensation review cycle in January are in an advanced stage of budget finalization. Most Indian companies tend to correct between April and June-July and thus for many of them this timeframe is too preliminary to have a clear line.