Real estate and infrastructure majors, including DLF, GMR, Larsen & Toubro (L&T) and Lanco, are set to tighten their budgets this appraisal season.
The sector saw average salary hikes of around 11% last year, with expectations high in the wake of the new NDA government taking charge at the Centre. But much of that sheen has been lost with the recent slowdown in the economy.
“The lull in projects and slow movement of already-existing contracts are leading to poor performance. It is the prime reason behind low salary hikes,” said the head of human resource at one of India’s leading listed infrastructure companies.
Aman Singh Gehlot, director of Delhi-based Ambience Group, said the sector is projected to see a drop in salary hikes this year, but felt this would be marginal. “We do expect some hike in remunerations in the next year due to several initiatives, including rapid urbanisation of smaller cities and towns.”
“The year 2015 proved to be a subdued period for the economy as a whole and the real estate sector in particular,” a DLF spokesperson said.
GMR, Lanco, L&T and Reliance Infra did not reply to HT’s requests for comments.
Real estate and infrastructure contribute around 6% to India’s gross domestic product (GDP). A recent survey by American HR consultancy Aon Hewitt found that the sector is likely to witness the biggest fall in average salary hikes this year.
“While last year, real estate and infrastructure was among top three sectors doling out hefty hikes, it has dropped to 14th rank in the list of companies,”Anandorup Ghose, partner at Aon Hewitt India, told HT.
According to the survey, real estate and infrastructure is likely to see an average of 9.8% salary increase this year. DLF, GMR, L&T and Lanco, among others participated in the survey.