IT salaries on the rise: Karnik

Jobs seekers in the information technology industry have it good with both Indian and multinational companies hiking salaries across the board, said Nasscom president Kiran Karnik.

Unlike previous salary revisions, this time around, entry-level salaries have not been ignored.

Beginners are being offered 15 per cent over earlier wage levels, while the hike goes up by around 25 per cent -30 per cent for the middle and top management levels.

But Karnik also added that inflated wage bills could be a cause for concern for the domestic IT companies as this could erode their competitive advantage.

"Cost advantage is still one of India's most important selling proposition but this is not sustainable in the long term. We can already see salaries on an upswing and this could be a cause for some concern," said Karnik. Karnik was speaking at a session on 'Is India a $ zero IT market'.

Karnik also added that the focus is rapidly shifting from low costs to the superior quality that Indian IT companies bring with them.

Domestic software exports grew by 30.5 per cent in the previous year and it is now the largest export industry above textiles and gems and jewelry.

This has come at time when Indian software industry's largest customers the US and Europe have cut down on their IT spends substantially.

But Karnik pointed out that in comparison the domestic IT spends and penetration are dismal. Indian companies have failed to see the huge opportunity that exists within the domestic market while multi nationals have been quick on cashing in on the burgeoning local IT needs.

Almost all major domestic IT deals in the recent past have been bagged by multi national companies like the computerization of the income tax department, which is believed to be one of the largest e-initiatives undertaken by the government, which was bagged by Hewlett Packard(HP) and Microsoft or the Bank of India 10-year outsourcing contract with HP.

There is still huge untapped potential in areas like telecom and textiles where further deregulation will intensify the competition and increase their IT needs.