Employees in India will see bigger pay rises next fiscal year as firms expect to emerge from lockdowns and the supply of applicants lags demand, according to recruiters. Paychecks could rise about 8 per cent in the financial year starting April 2022, especially if authorities avert a third wave of the virus, according to Michael Page and Aon Plc.

That's higher than the 6-8 per cent surveys predicted for the current year. India has historically always reported Asia's highest increases - and is expected to do so for at least the next two years - but the magnitude has been declining in recent years after double-digit inflation earlier in the decade eased.

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Consumer prices have risen again during the pandemic, but have been mainly attributed to short-term supply issues.

Not enough of qualified

The forecasts are focused on the organized labor sector, which accounts for less than 20 per cent of the workforce. Much of the informal labor isn't captured in surveys. The low availability of qualified applicants for the organized sector will also prop up salaries, according to Roopank Chaudhary, chief commercial officer for human capital solutions at India and South Asia at Aon.

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"India's number have always been pushed up not necessarily by GDP or inflation - there is no perfect correlation there - but largely because of the fact that there is a demand-supply mismatch of talent," he said. The e-commerce, pharmaceutical, information technology and financial services sectors are predicted to offer relatively larger salary hikes in India, while retail, aerospace, hotels and hospitality will be laggards.