Private consumption likely to take a hit on India's IT sector squeeze

In all, listed IT companies accounted for 47 per cent of incremental growth in India Inc's salary and wages bill in the last 12 months

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