IT sector job woes may pull down overall consumer demand in India

Historically, there is a strong positive correlation between the growth of compensation (salary, wages, etc) in the IT sector and the growth of PFCE in the economy

A reduction in headcount and subpar salary increments by information technology (IT) service exporters, including Tata Consultancy Services (TCS), Infosys, and HCL Technologies, could negatively impact overall consumer demand in India.

The IT sector is the largest employer in the corporate sector, accounting for nearly a third of the salary and wage expenses of listed companies in FY23, up from a 22 per cent share a decade ago.
 

Historically, there is a strong positive correlation between the growth of compensation (salary, wages, etc) in the IT sector and the growth of private final consumption expenditure (PFCE) in the economy. For instance,