Private consumption in the country is likely to be affected because of a cutback in fresh hiring and lower pay increments given by domestic IT companies, whose salary bill continues to grow faster than that of the rest of Indian Industry.
Any slowdown in their employee expenses is expected to weigh on income growth in the economy. This can adversely affect demand for big-ticket consumer goods such as cars, high-end mobiles, home appliances, and new homes.
Listed IT companies reported a sharp cutback in net hiring in the third quarter, or October-December (Q3), of FY23 as against the July-September quarter (Q2) and even the corresponding year-ago period. The top five listed of them together added just 1,940 people (on a net basis) to their rolls in Q3FY23, down sharply from 28,836 in Q2FY23 and 61,137 people in Q3FY22.
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