India Inc has been able to give reasonably high pay increases despite the economic slowdown. And, with the economy expected to grow at over 6 per cent, industry is estimated to see average 8 per cent salary rise for 2009, according to a new Mercer India report.

More, half of all Indian companies plan to add employees over the next three months, states the Mercer India Monitor quarterly survey. Sector-wise, the survey shows pay increases in the pharmaceutical, consumer and manufacturing sectors have been in excess of 7 per cent.

However, the information technology sector, the worst hit, has had almost no increase this year across most companies. Telecom, however, did fairly better.

With a sample of 93 companies, the survey noted the majority forecast a double-digit pay increase for 2010. Most companies do not include variable pay in the salary increment definition but link it to fixed compensation and have a separate budget for the latter.

"The salary increase forecast shows an optimistic sentiment with the overall forecast for 2010 at 10.9 per cent, compared to 8 per cent this year. Most sectors are forecasting double-digit increases for next year.

"The IT sector is showing improved sentiments, with increases expected to leap back to a few percentage points next year, after a long lull of near-zero increase this year," said Gangapriya Chakraverti, India leader of Mercer's information product solutions business.

About 90 per cent of companies review salaries once a year, with April being the most prevalent month, followed by January and July. The majority do not have a formal mid-term review policy.

On bonuses, 90 per cent of the survey respondents say they have an institutionalised variable pay plan, mostly in the form of performance-based bonus plans, while a few companies also have a profit sharing scheme.