Engineering students aspiring to pursue a career in the IT sector have something to cheer now, as the top companies like Tata Consultancy Services (TCS) and Cognizant Technology Solutions (CTS) are reportedly looking to increase salaries for freshers after many years.

Employees selected through campus recruitments at engineering colleges for entry-level jobs will now see 10-12% increase in salaries compared to that offered last year, NDTV Profit reported.

Analysts say that salaries for freshers have remained stagnant in the past few years due to increasing focus on automation and "oversupply of qualified manpower".

In 2013, a report by Credit Suisse had said that "real wages of entry-level staffers in the IT sector was at the lowest in more than 15 years".

Major IT companies in the country, such as Accenture, Cognizant, Infosys, TCS and Wipro are automating some of their operations to improve productivity. The automation models have reduced the hiring activity in the outsourcing industry worth nearly $150 billion, with entry-level jobs being cut down significantly.

In April, Wipro CEO TK Kurien had said that the company's focus on automation would bring down its headcount by a third in the next three years.

The initiative by India's third largest IT firm could see about 47,000 employees losing their jobs, taking into account its employee strength of 1.58 lakh people as of 31 March, 2015.

However, IT firms may be compelled to offer higher salaries in the current placement season due to intensifying competition from start-ups, according to analysts.

Domestic start-ups are handing out attractive salary packages of over Rs 5 lakh per annum for junior level employees compared to Rs 3 to Rs 4 lakh offered by IT companies.