A more recent post on this topic is available from April 2024. Read more here.
A commentary on the topic of average income, wages & salaries in India.
The average annual gross wage in Germany is just over 30.000 euros. This number gives a good and realistic feeling for that Average income in the Federal Republic. The answer to the question “what is the average income in India” is much less meaningful. In purely mathematical terms, the arithmetic mean in India is the equivalent of just 1.000 euros!
Actual labor costs in India
But you shouldn't be fooled. This value allows virtually no conclusions to be drawn about the wage level in India. The salaries of the broad masses of agricultural workers, day laborers and unskilled factory workers, e.g. Sometimes only a few cents per hour, this is compared to the salaries of highly qualified workers with several years of professional experience. These have already reached a considerable level in some sectors.
Since highly qualified specialists are rare, they are paid accordingly for their performance. “If expert knowledge is required that only a few skilled workers in India have, in exceptional cases you even have to pay “super-European” wages,” says Werner Heesen, head of the “Human Resources Consulting” department at Dr. Wamser + Batra GmbH.
A supposedly low wage level is no longer a reason to settle in India. In other Asian countries, personnel costs are significantly lower!
Average Salary India
There are significant regional differences in income. The highest salaries are generally paid in the large metropolises: Mumbai, followed by New Delhi and Bangalore. Not only is there the highest demand for qualified personnel, but also the highest cost of living. Therefore, different salaries for the same job with comparable qualifications are common even within a company at different locations. As the distance to (large) cities increases, incomes also decrease (exponentially).
There are also large salary differences depending on professional experience or hierarchy level. An example: As a graduate (a so-called “fresher”) of a technical university, you earn a starting salary of perhaps less than three hundred euros per month. After three to five years of experience, you can expect twice as much. If you are a project manager with around ten years of experience, you can earn 1.500 euros; correspondingly more in leadership positions. Managing directors earn annual salaries of between 50 and 100.000 euros.
Economic dynamism and high inflation rates led to annual salary increases of over ten percent, even for lower and middle salaries; In management positions, 15 to 20 percent per year is not uncommon.
The salary & its components
However, the basic salary often only makes up a part of the gross salary. There is a clear trend across all levels towards paying variable salary components linked to operational success and direct personal performance. These performance-dependent salary components are particularly pronounced in sales. However, there is an annual bonus in almost all jobs; This is sometimes even regulated by law.
For senior employees, the allowances represent a significant part of the salary. They often make up half of the salary. In addition to the performance bonus, the so-called “allowances” can include the total or partial financing of accommodation costs, medical care for the family, insurance and pension contributions, a company car including a chauffeur, as well as the assumption of the costs for domestic servants, the fees for the private telephone or the Travel costs for the whole family to their hometown. In the case of highly qualified top employees, the bonus package often decides whether they stay in one company or move to another company.
It is extremely difficult for foreign investors to obtain reliable information about how much potential and existing employees are worth in order to be able to assess who is overpaid or underpaid or what salary increases and bonuses are appropriate.
In our department WB HUMAN RESOURCES® Our human resources experts are available to answer any questions you may have about these topics Wages & Salaries available without obligation.
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PS: You can find out more about wages and salaries in the Indian IT and software industry on the website Indian economy
