Real Earnings Drop In India As Inflation Outpaces Salary Growth: Reports

India’s workforce is facing a tough economic reality as the real earnings in the country have taken a hit. As per a Deel report, despite a 3 per cent increase in nominal salaries, inflation has outpaced this growth, resulting in a 2.5 per cent decline in real earnings year-on-year (YoY).

This gap between salary growth and inflation is significantly impacting workers’ purchasing power and economic stability. While countries like the US, Canada and Great Britain continue to lead in compensation levels, India’s workforce is grappling with the dual challenge of stagnant pay increases and rising living costs.

The report also pointed to the growing trend of flexible work arrangements in India, particularly within the tech industry. For product and design roles, 56 per cent of positions are held by independent contractors, a shift that shows the demand for more adaptable work structures. This trend is seen as part of a larger global movement toward freelance and contract-based employment, which has become more prevalent in India’s fast-evolving tech sector.

Gender Pay Disparity

The report also revealed that in terms of gender pay disparities, India has made some strides, though challenges remain. The gender pay gap is narrower in technical roles compared to other markets such as the US. However, a noticeable discrepancy persists in engineering and data roles, where men earn a median salary of USD 35,000, while women in the same roles make USD 26,000.

In a statement, Sumit Sabharwal, Deel’s Country Leader for India, said, “Deel's data also shows that men and women still get paid differently around the world. For example, in India in engineering and data roles, men earn a median salary of USD 35K compared to USD 26K for women. While India's gender pay gap is smaller than other markets like the US and Canada, it highlights discrepancies that still exist despite progress in certain industries. These disparities not only affect individual workers but also have implications for the overall economic stability and growth of India.”