India has become one of the top countries in the world where employee compensation package is quite huge. Salaries in the country are expected to increase by 16 percent in the next year. The hike will be one of the highest in the Asia-pacific region, says a latest report by the Hong Kong-based compensation firm HR Business Solutions (HRBS).

According to the report, pay increases in the Asia-Pacific region are likely to grow even as the economies are expected to be impacted by the global slowdown. "The forecast pay increase in India averaging 16 percent is one of the highest among all the countries," the report stated.

Though the Indian economy is reported to be cooling, it is still expected to achieve a growth rate of 7-8 percent in 2008, the report added.

"In addition, it has the fourth highest inflation rate of over 12 percent in 2008, which increases pay rise pressures on employers.

Labor demand is still robust and there is a lack of sufficient supply of the skills-set required by India's rapidly growing services, manufacturing, construction and retail industries to boot," the report said.

The HRBS 2009 pay increase forecast is based primarily on four economic factors - GDP growth, inflation, unemployment, manpower demand and past pay increase trends.