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Employees on rolls must not be sacked: Nath

Source: PTI
November 10, 2008 10:28 IST
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Concerned over a number of companies resorting to job cuts to curb their losses due to the global economic turmoil, Commerce and Industry Minister Kamal Nath has asked India Inc not to boost profits by resorting to firing staff.

Within a week of Prime Minister Manmohan Singh speaking his mind to the captains of industry, Nath said, "Employees on the rolls must be retained."

When asked in a talk show whether he was telling industry not to boost profits by retrenching people at this moment and live with smaller profits, Nath replied, "Absolutely, I am saying that."

He did not agree that IT firms like Wipro, Infosys and Satyam could come under pressure to lay off people. However, fresh creation of jobs might be impacted, he said.

"Maybe, they are not going to create the same number of jobs they have been creating. Yes, growth in employment generation will be affected," he said.

Amid fears of a global economic crisis spilling over to India, Singh had asked the industry leaders to refrain from large-scale lay offs.

"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," the prime minister had said in his interaction with the corporate honchos on November 3.

Reports suggest firms in automobile, steel and real estate sectors are resorting to lay-offs in the midst of a slump in demand.

Nath said the government would have to pump in Rs 25,000 crore (Rs 250 billion) in the next six months into the economy without creating an adverse impact on the fiscal deficit.

"We will definitely have to pump in. Rs 25,000 crore to keep this (economy) oiled, to keep the machine moving," Nath said, adding, "It is going to happen within the confines of good financial management." He said the money would be raised from re-allocations and greater efficiencies.

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