Calling the current global financial crisis “abnormal”, and admitting that it had impacted the Indian economy, Prime Minister Manmohan Singh on Monday asked India Inc to refrain from “knee-jerk” reactions like lay-offs.
“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 during a meeting with leading industrialists at his South Block office in New Delhi.
“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 lay-offs which may lead to a negative spiral,” he said.
“Industry must bear in mind its societal obligations in coping with the effects of this global crisis. Government and industry must act in a true spirit of partnership to meet the challenges that lie ahead.”
The prime minister's comments came against the backdrop of a analysis by an apex chamber last week - but withdrawn later - that seven industries including steel and IT were looking at 25 per cent reduction in job cuts over the next 10 days.