Fewer jobs, smaller compensate hikes force Indian techie to cut back spends
The global economy has slow down and the Indian IT industry is in the pain of an uplift. A pall of gloom hangs over many of India’s three million IT executives. IT workers were once easy and big spenders but because of the slow down they are ruthlessly cutting back on discretionary spending.
IT professionals has managed to couple desirability with affordability. Arindam Chakraborty, 31, project manager with a Gurgaon based technology services and consulting company, is an avid gamer said that the mood is gloomy and job portals are also running dry. In 2004, he got an increment of 70 percent and an average of 12 percent to 15 percent in recent years. Now it has come down to six percent to eight percent a year, says Chakraborty.
Many IT professionals are feeling the pinch as there are no proper increment for which their finances are struggling to keep pace with their lifestyle. A few months ago a couple wanted to rent a property in Marathalli into a gated community but hesitated after poor hikes as they have to shell out more money on rent. And now, there is also the fear of a job loss.
This fear is silently reverberating across IT hubs in Bangalore, Gurgaon and Hyderabad and running down the chain. Restaurants and hotels are reporting thinner attendance, malls and reactors are finding it tougher to get customers. Once IT workers was a prime customer for the local reality broker. No longer.
According to real estate expert, overall property transactions has gone down by 40 percent in the past one year. Speculators lifted the market beyond sustainable level. Genuine buyer are there but because of job uncertainty it has also gone down.
Investors who made purchases also want to exit for two reasons- difficulty in paying hefty EMIs and little appreciation in value. Ashish Purvankara, joint managing director of Purvankara Properties, says that today, hardly he gets 37 percent of his business from clients in the IT sector in Bangalore which was nearly 70 percent few years ago.
Real estate are the worst hit as companies hold back on hikes and incomes are strained. Last year the IT industry grew barely 10 percent compared with 19 percent two years ago and hired 200,000 people, 20% less than two years ago.
The IT Industry has been caught in the midst of a two phase transformation. One as it struggles in a global slowdown with reduced spends, it is paying employees smaller hikes. Second it is pursuing non-linear opportunities, which require fewer employees and is causing companies to go slow on hiring.
Entry-level software engineers were paid as much as 50%-100% more than their peers in other industries. But in the past two years, with slowing growth and a squeeze on margins, people in the IT industry have begun to reduce and downgrade their consumption.
Earlier people use to look at IT jobs as an entitlement but that is no longer the case now. IT employees are cutting back spends that has resulted in lower interests towards buying a property.
Related Real Estate News:
Commercial real estate booming!
Commercial real estate demand going down
Commercial real estate, Gated community, home buyers, Marathahalli, Purvankara Properties, Real-estate market, Residential real estate, residential real estate market
