It is relative, while some singers are paid little or nothing some are paid too much. Eventually, it's a demand supply scenario. I believe that increased competition has made the situation much more cutthroat but it has also created many more opportunities.
Honestly, I don't think film singers are such an exploited lot. It's the non-film music circuit in India that needs more attention and encouragement.
Dhruv Dhalla, composer
Besides other things, remuneration for a singer also depends on how popular and experienced the singer is. For instance, a new singer takes home anywhere between R 15000-30000 and established ones take above a lakh.
But frankly, even if singers are paid less, they pretty much make up for that with their live performances. Musicians don't really get any royalty from their shows, so I don't think it's unfair for singers at all.
Mika, singer
I don't think singers are underpaid. Not me at least. If someone offers me less than R 5 lakh for a song, I prefer to sing it for free. The problem with singers is that they don't know their worth. They are willing to work for peanuts for well-known musicians like A R Rahman.
Sneha Khanwalkar, composer
Unlike in advertisements, where there is a standard rate for singers, for films it fluctuates depending on a lot of aspects.
A big budget film would obviously fulfill the demands of a singer better. Also the money is not going out of their own pockets. So I don't know why a composer would deliberately not remunerate someone who deserves to be.