The staff cost of 2,549 companies taken for the RBI study had risen by around 20 per cent in each of the first three quarters of 2008-09. However, with corporate India reducing its overall expenditure, the rise in manpower costs too was arrested.
As the impact of the global downturn became severe since September-October, the corporates were forced to cut down the pace of the total expenditure.
"Reflecting the impact of financial market turmoil, economic activity post-September weakened substantially," the study said.
The total business expenses, which grew by over 36 per cent in the first two quarters, contracted by 0.5 per cent during January-March period. The growth in October-December quarter had slowed to 12.6 per cent.
On an annual basis, manufacturing firms covered in the study posted 14.7 per cent increase on staff costs largely on account of higher pace of expenditure in the first half of 2008-09. In the services sector also IT firms registered a growth of 24.7 per cent on staff cost and non-IT companies posted an increase of 23.1 per cent.