A commentary on average income, wages & salaries in India.
The average gross annual wage in Germany is just over 30,000 euros. This figure already gives a good and realistic feeling for the Average income in the Federal Republic. The answer to the question "how high is the average income in India" is much less meaningful. In purely arithmetical terms, the arithmetic mean in India is the equivalent of only 1,000 euros!
Actual wage costs in India
But you should not be deceived. This value allows almost no conclusions about the wage level in India. The salaries of the broad mass of agricultural workers, day labourers and unskilled factory workers of only a few cents per hour in some cases, contrast with 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 services. "If expert knowledge is required, which only a few specialists in India have, in exceptional cases it is even necessary to pay "non-European" wages," says Werner Heesen, head of the specialist department "Personnel Consulting" at Dr. Wamser + Batra GmbH.
A supposedly low wage level has long since ceased to be a reason to settle in India. In other Asian countries, personnel costs are significantly lower!
There are significant regional differences in income. The highest salaries are generally paid in the large metropolises: Mumbai, followed by New Delhi and Bangalore. Here there is not only 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 the same company in different locations. With greater distance to the (large) cities, incomes then also decrease (exponentially).
There are also large salary differences depending on professional experience or hierarchical level. An example: As a graduate (a so-called "fresher") of a technical university, you earn an entry-level salary of perhaps not even three hundred euros per month. After three to five years of experience, however, you can expect to earn double that amount. If you are a project manager with around ten years' experience, you can expect to earn as much as 1,500 euros, and more if you are in a management position. Managing directors can expect annual salaries of 50 to 100,000 euros.
Economic dynamism and high inflation rates have led to annual salary increases of more than 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 is often only a part of the gross salary. There is a clear trend across all levels towards the payment of variable salary components linked to operational success and direct personal performance. These performance-related salary components are particularly pronounced in sales. However, an annual bonus is available in almost all jobs; in some cases it is even regulated by law.
For senior employees, allowances represent a significant part of the remuneration. Often they make up half of the salary. In addition to the performance-related bonus, the so-called "allowances" can include full or partial financing of accommodation costs, medical care for the family, insurance and pension contributions, a company car including a chauffeur, as well as covering the costs of domestic help, private telephone charges or travel expenses for the whole family to the home town. In the case of highly qualified top executives, the allowance package often decides whether they stay in one company or move to another.
It is extremely difficult for foreign investors to obtain reliable information about how much potential and existing employees are worth in order to assess who is overpaid or underpaid, or what salary increases and bonuses are appropriate.
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PS: More about wages and salaries in the Indian IT and software industry can be found on the website of Indian economy