New Delhi, Feb 20, 2009: Don’t cut jobs, Pranab Mukherjee to India Inc. India’s part time finance minister and foreign minister Pranab Mukherjee has asked the industry not to cut jobs at the time of recession. Instead he asked the companies to opt to cut salaries instead.
For recession hit companies the proactive behaviour of Pranab Mukherjee must be very annoying thought. For more than a decade corporate sector in India has been spared much pressure from the government.
But as recession makes its impact felt across industries and sectors, and as election time comes, the government is sure to become more proactively involved in issues that were left to the companies themselves till just a few months ago.
For middle class families who are sure to be hit hard if companies are given a free hand to fire their employees it must be a sweet music to their ears. A number of employees in different sectors especially in realty, IT, BPO, textile and other export oriented industries are waiting with baited breath the arrival of pink slips to their tables.
A large number of companies across different sectors have experienced huge losses recently. Before the crisis erupted, there were more than 1500 software firms in the country, while the employee base of the sector had grown to 553,000 (from 415,000 in FY 06). More than 1300 IT companies were operating in Bangalore alone. This sector has been adversely affected by the global crisis-a fact acknowledged by Bangalore-based Infosys Technologies Co-Chairman, Nandan M. Nilekani. He believes that even though the tech sector would see the impact of the economic slowdown in terms of growth rate, the IT industry will continue to grow and recruit manpower.
A survey of 125 companies by the commerce department in New Delhi has revealed that Indian companies lost export orders worth Rs.1,792 crores during August-October 2008 and were forced to lay off 65,000 workers. The manufacturing sector, especially the auto industry, has also sustained a severe hit. As a result, the global credit rating agency, Standard &Poor’s (S&P) has downgraded Tata Motors rating for the foreign market. The company witnessed a 30 % drop in sales in India compared to last year.
