The latest data on annual average pay hikes in Indian IT firms reveals a concerning trend that many professionals may not even fully realize. While salary hikes continue to happen, their growth rate is visibly slowing year-on-year, especially when adjusted for inflation. This essentially means that for many, the real purchasing power of their salary is shrinking, even though their nominal salary is increasing.
According to data sourced from UnearthInsight, IT giants like TCS, Infosys, HCLTech, and Wipro have offered moderate pay hikes over the past five financial years. In FY25, TCS is offering hikes in the range of 4-8%, Infosys 6-8%, and HCLTech a mere 1-2%. Wipro's data for FY25 is not available. Compare this to FY22, where TCS gave an average hike of 10.5%, Infosys offered a robust 14.6%, HCLTech 6.8%, and Wipro 10%. The decline is evident. Even in FY21, hikes were slightly better, with TCS at 6.4%, Infosys at 6%, HCLTech at 4%, and Wipro at 10%.
Now, if we factor in inflation — which in India has been hovering between 5-7% in recent years — the picture becomes even bleaker. A nominal salary hike of 4-8% effectively means that many employees are barely keeping up with rising costs of living, and some may actually be losing purchasing power.
Unfortunately, a large portion of Indian youth employed in IT and other sectors are not fully aware of this slow erosion of real income. Many focus on getting an annual hike without considering how inflation silently chips away at their financial stability. This complacency can have serious consequences in the long run, especially when long-term financial goals like home ownership, child education, healthcare, and retirement planning are considered.
The key takeaway here is simple yet powerful: increasing income should be the primary financial goal, not just securing small annual hikes. To achieve meaningful financial growth, individuals must focus on continuous personal and professional development. Upskilling, reskilling, and cross-skilling are no longer optional; they are essential. Learning new technologies, obtaining industry-relevant certifications, or even exploring leadership and management roles can open doors to better-paying opportunities.
Moreover, diversifying income streams is crucial. Relying solely on a monthly salary may not be sufficient in today’s dynamic and volatile economy. Side hustles, freelancing, investing, and building passive income sources like stock dividends, rental income, or online businesses can help cushion financial shocks and accelerate wealth accumulation.
Time is a critical factor. The earlier one recognizes the need to act, the better positioned they will be to secure a stable financial future. The job market is evolving rapidly, and those who sit idle risk being left behind as newer skills and technologies take center stage.
In summary, while pay hikes are still happening, their diminishing pace in real terms is a silent warning for India’s workforce. The goal must shift from just expecting an annual hike to proactively taking steps that will significantly increase one’s total income. The world is changing fast, and so should the approach towards career and personal finance.
Disclaimer:
The information provided in this blog is for informational purposes only and reflects the author's personal analysis based on available data. Readers are advised to conduct their own research and consult with financial advisors before making any career or financial decisions.
