Forbes has an article highlighting the salary rise in India, wage inflation is being discussed as one of the key issues facing IT Services Firms in India, here are excerpts of the same:

It pays to be part of India's talent-hungry corporate world, where average salaries rose between 11% and 17% last year and are predicted to rise by an average of 14.5% in 2007, according to a new survey.

A Hewitt Associates annual survey found that India reported the highest wages in the Asia Pacific region, with average salary increases of 14.6% in 2006. The Philippines was a distant second on the list, reporting an annual average of 8.2%, while China saw an 8.1% salary hike.

It all boils down to the fierce competition for talent, says Sharad Vishvanath, joint leader of analytics consulting at Hewitt Associates India.

Local companies are doling out marginally higher wage hikes than multinationals, the study found. Local firms saw average hikes of 14.9% and foreign firms 14.3%.

Insurance company employees saw the sweetest deals in 2006, with the sector reporting the highest average wage increase of 17.1%. Close behind were banking and financial services at 17%. Software services saw an average increase of 15.6%. The industries with the lowest salary increases in 2006 were healthcare and medical products, 12%, and not-profits, 11%.

India's apex tech lobby Nasscom says the industry could face a shortage of 500,000 professionals by 2010 if measures are not taken to train potential employees.

Source: 1

Prashanth Rai