If you plan to expand your business operations to Indian shores or want to outsource certain tasks to the land, getting the answer to “what is the average salary in India?” is crucial. Though the answer varies widely and depends on multiple factors, some sources put it to INR 31,900 per month as of 2021. Some others say it’s INR 32,840 per month or INR 3,87,500 annually.
Considering the average monthly salary to be INR 31,900, the total annual earnings come to INR 3,82,800. In other words, the average monthly salary comes to around $428.49 per month (based on the exchange rates that were applicable in July 2021). The average salary range varies from INR 8,080 (which is the lowest on the spectrum) to INR 143,000 (the highest on the spectrum, though the real maximum salary is higher).
Does this mean the nation’s actual highest salary is just 1.43 lakhs? No, it’s not!
The average Indian salary range takes into account the salaries that fall between the nation’s average lowest salary and average highest. When you talk about the average monthly salary in India, the data mentioned above include transport, housing, and other benefits. However, salaries can vary drastically between different industries and careers.
According to The Economic Times, India’s leading business-focused newspaper, an individual whose average salary in India is INR 3,00,000 per annum (or INR 25,000 per month) will feature in the nation’s top 10% of the wage earners.
Similar to other regions across the world, the average salary in India is influenced by multiple factors, including the industry, nature of work, location, and the employee’s education and work experience. At times, gender (and even age too) could factor in determining the average wages to be paid though such discrimination is minimal in the corporate sector. However, in the unorganised sectors, the average hourly wage or average salary continues to be driven by these factors. As a result of such gender pay gap in India, females in the workforce are often at a disadvantage.
When you take a look at the average salary in India, you will notice it to be considerably lower than average salaries in developed countries like the USA or the UK. For instance, the gross average wage (annual) for a full-time employee in the USA stood at $74,738 in 2021 or approximately $6,228 per month. Compare this to the measly $428.49 per month in India and the picture will become clearer.
The Median Salary vs. the Average Salary in India
In terms of average salary, India shows a state of inequality. According to the ‘State of Inequality in India’ report, which was prepared by the Indian chapter of a global competitiveness initiative by using government data, 90% of the country doesn’t earn even INR 25,000 per month.
To understand the disparity in average income prevalent in India, it will be wise to consider median salary as well, along with average salary and salary range, both of which we have discussed above. Not sure what a median salary refers to?
It stands for the borderline between the highest and lowest (50:50) pay of employees engaged in a particular occupation or position. Median salary value gives you a better understanding of the earnings of workers as it represents a precise reflection of the average wage by cutting the extremes at either end of the spectrum. In other words, the median symbolises the middle salary value.
In India, the median salary stands at INR 29,400, which indicates that 50% of the population is earning below the INR 29,400 mark while the other half is earning more than INR 29,400. If you are an employee in India, you would definitely want to sit on the side that earns more than the median salary.
Now that you have a fair idea of what the average salary and median salary stand for, let us understand how they are different.
Though median salary and average salary are both indicators of the central tendency of a set of salary figures, they use different approaches to arrive at the value. Let’s take a hypothetical situation to understand it better.
Three employees A, B, and C earn INR 20,000, INR 30,000, and INR 40,000. The total of INR 90,000 is divided by 3 to give you an average salary of INR 30,000.
Thus, the average salary corresponds to the amount earned by the “standard employee” and can be dragged down or up by low or high salaries at the distribution’s extreme ends.
Since the median salary represents the middle value in a dataset of salaries, you need to arrange the figures in descending order and then find the salary that represents the midpoint of the distribution. For the example above, INR 30,000 is the salary in the middle or the median salary.
Since the median salary represents a particular point in the distribution, it can’t be pulled up or down by salaries at the extreme ends of the distribution. As a result, it’s believed to be a more neutral indicator of central tendency, particularly when you are working with a small set of salaries where the computation of an average can be disproportionately influenced by a solitary extreme value.
Factors Playing a Decisive Role in Average Salary
The average salary of an employee varies based on location. For example, software developers in Bangalore tend to get paid more than their Kolkata-based counterparts. Browsing multiple data from various sources and surveys also show that average salaries in locations like Goa, West Bengal, or Chandigarh are lesser than that of Bangalore by INR 32,000 to INR 28,000.
Experience and education are other vital factors that drive what an employee earns. Surveys show an individual with a Bachelor’s degree will earn an average of 24% more than those with a diploma or certificate. In case you have a Master’s degree, you can look forward to earning up to 29% more than those holding a Bachelor’s degree. Average salaries of Ph.D. holders are higher, about 23% more than those with a Master’s degree for the same job title.
As you gather work experience, your salary goes up, and this happens in India as well. On average, your starting salary will typically double by the time you have 10 years of experience in the specific field or industry.
Based on what profession you choose, your salary could again vary widely. In India, average salaries differ drastically across different sectors, such as retail, customer care, manufacturing, education, IT, etc. The salaries also differ based on the type of job you hold (freelance, part-time, hourly, full-time, etc.) and your job profile (team leader, project manager, director, etc).
All these factors can affect your average salary increase or salary increments. White-collar jobs, especially in India’s IT and ITES sectors, still pay much better than what many other sectors offer. These employees usually don’t need to worry about getting a minimum salary as their employers are guided by certain stringent rules and regulations, unlike employers in the unorganised sectors.
With some employers considering a 4-day work week in India and the central government pushing for it, the average salary in India could get affected by the move. However, Indian employers still need to go a long way when it comes to offering workers paid vacations or minimum wages (especially the ones engaged in the unorganised sectors). They also need to change their outlook to allow employees their rightful maternity leaves and paternity leaves.
The average salary in India leaves a lot to be desired. Unless employers realise their employees’ worth and the government strongly-handedly implements rules and regulations to ensure everyone gets paid the minimum wage, work-life balance for most will continue to be a utopian dream.