Underlining the perception that India has remained comparatively immune from the global economic turndown, the country is projected to witness an average salary hike of 8.2 per cent this year, ahead of China's 8 per cent, according to estimates by human resources firm Hewitt Associates.

While this is much less than the 13.3 per cent hike in 2008, it is still the highest in the Asia-Pacific region, the company said on Thursday in its annual salary increase survey.

The increase forecast is among the highest globally. The pharmaceutical industry is expected to see the highest increase of 13 per cent in salaries, whereas retail, including wholesale and distribution, is anticipated to have the lowest hike of 5.3 per cent. The hike for the 'entertainment/communications/publishing' industry has been estimated at 7.5 per cent.

However, companies from the real estate sector did not participate in the survey. The survey also warned that plans of firms could change rapidly in the current climate. Hence, the expected salary increase of 8.2 per cent is not completely comparable with rest of the nations, Hewitt said.

In the Asia-Pacific region, the maximum pay hike after India would be in China (eight per cent) and Thailand (six per cent). Other countries in the region are Australia, Hong Kong, Korea, Japan, The Philippines, Singapore, Malaysia and Taiwan.

About 480 foreign-owned, domestic and joint venture companies spread across diverse sectors were surveyed. Of these, 60 per cent were multinational while 40 per cent were Indian. The survey was conducted from December 2008 to the end of January.

The survey pointed out that the estimated pay increase is in single digits for the first time since 2002, adding that around 16 per cent of companies in India have reported a salary freeze in 2009.

The survey said that more firms are expected to introduce performance-based incentive plans. It added that there would be a decline in salary hikes across all levels of management this year.

Current and continued economic turmoil have companies around the world grappling with ways to reduce costs and remain stable enough to ride out the downturn, which has prompted a majority of companies around the world to make significant reductions in their base salary spending in 2009.

In Europe, 69 per cent of companies are also planning layoffs, and nearly two-thirds (63 per cent) are contemplating hiring freezes. In Latin American, two-thirds (66 per cent) of companies are considering hiring freezes.

On the other hand, companies in Asia-Pacific and the US are focusing more on reducing variable pay budgets, or performance-based awards that must be re-earned each year.

Nearly two-thirds (64 per cent) of companies in Asia-Pacific and half of companies in the US are reducing variable pay budgets in 2009.