The survey has been conducted among 2,326 Indian companies and has found that the salary hike is likely to decline from 11.89 per cent in 2011 to 11.54 per cent in 2012.
"After having grown at the rate of 8.4 per cent over the last two years the Indian economy slowed down considerably in the year ended March 2012 and the lower than expected growth in the economy at only 6.9 per cent is reflecting in the Indian corporate sector's lower outlook for compensation hikes for its employees," said, Vishal Bhargava, Right Step Consulting Director.
"Drop in salary hikes in the manufacturing sector was expected given that sector's estimated growth rate in 2011-12 at 3.9 per cent is a drop of almost 50 per cent as compared to 7.6 per cent in the previous year," Bhargava said.
According to survey, the prominent core sectors such as power, steel, mining and construction are also likely to witness lower salary hike.
"Besides, the drop in expected salary hikes, in services, is on account of a sharp drop in telecom and drops in sectors like retail, IT software, BFSI and travel/hospitality.
"Drop in foreign MNCs is marginally higher from 12.17 per cent in 2011 to 11.73 per cent in 2012, a decline of 44 basis points as compared to Indian companies which are expecting a drop from 11.71 per cent to 11.41 per cent a drop of 30 basis points," Bhargava added.