An anxious government weighed down by possible political backlash and impending elections, sent a message to India Inc on Monday: No job cuts.
<b1>"While every effort needs to be made to cut costs and raise productivity, I hope there will be no knee-jerk reaction such as large scale layoffs which may lead to a negative spiral,” Prime Minister Manmohan Singh said in a meeting with leading business honchos at his South Block office in New Delhi.
The country’s top macroeconomic managers confabulated for over two hours with industry leaders — including Mukesh Ambani (of Reliance Industries), Anand Mahindra (auto major Mahindra & Mahindra Ltd), Nandan Nilekani (IT giant Infosys), YC Deveshwar (ITC Ltd) and Sunil Mittal (Bharti Group) — on ways and means to tide over the current global economic meltdown that have forced many companies to defer planned expansion.
"The financial crisis has exacerbated a global downturn that was expected earlier but is now likely to be more severe and prolonged,” the Prime Minister said in the meeting.
The meet included Finance Minister P Chidambaram, RBI Governor D Subbarao and Planning Commission Deputy Chairman Montek Singh Ahluwalia from the government’s side.
“Industry must bear in mind its societal obligations in coping with the effects of this global crisis,” Singh said. “Government and industry must act in a true spirit of partnership to meet the challenges that lie ahead.”
Industry leaders came out satisfied. “We have got an assurance that the government and the industry are on one side and the government will work with the industry to see that any challenge that industry faces will be alleviated,” said Kamath, president, Confederation of Indian Industry and CEO, ICICI Bank.
“More money will come into the system and this is good for the industry,” said KP Singh, chairman, DLF.
FICCI president Rajeev Chandrashekhar, JSW managing director and ASSOCHAM president Sajjan Jindal also attended the meeting.