Wage gap between public and private sector jobs widened in financial year 2022 by nearly a percentage point, The Economic Times reported citing data on employee compensation.
According to the ET report, the wage bill of private sector was 12.7 per cent of GDP for the year ended March 2022 compared with 11.8 per cent for the public sector.
10 years ago the publiuc sector had higher share of 12.4 per cent in the GDP as against 9.8 per cent for the private sector. Private sector surpassed public sector in wage bill in financial year 2020 ahead of the pandemic.
"Private sector salaries are increasing at a faster rate than the government and the job growth is also higher," ET report quoted Madan Sabnavis, chief economist at the Bank of Baroda as saying while explaining the widening gap.
Subdued job growth in the government sector could also be a reason for widening gap, Sabnavis added.
The lag in implementation of seventh pay commission by some states also caused widening of gap between the wage bills.
Private sector compensation increased 20.3 per cent from FY20 to FY22, whereas growth for the public sector was 12.5 per cent. The nominal GDP grew 16.8 per cent during the period, ET report concluded.
