No layoffs even at seven percent growth: Ahluwalia (Lead)

November 19th, 2008 - 10:10 pm ICT by IANS  

Manmohan SinghNew Delhi, Nov 19 (IANS) Even as fears of large-scale job cuts grip all major economies around the world, a top government official said here Wednesday that the total number of jobs in the country will not go down even if economic growth slips to seven percent.”It is possible that in some sectors of the industry, which were badly affected, there could be some contraction. But the total employment will not go down,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters.

If the economic growth comes down from nine percent to seven percent, less jobs will be created than expected, but there would not be layoffs, he said.

Panic struck the job market last month when the Associated Chambers of Commerce and Industry (Assocham) said Indian firms would likely lay off a quarter of their employees.

The chamber said the job cuts would be across the steel, cement, construction, real estate, aviation, IT-enabled services and financial services sectors. The industry lobby, however, withdrew its statement later.

The government is trying hard to figure out what it can do to mitigate the impact of the financial crisis. On Nov 3, Prime Minister Manmohan Singh asked the industry to refrain from any “knee-jerk” reaction such as large-scale layoffs, which might lead to a negative spiral.

He said “industry must bear in mind its societal obligations in coping with the effects of this global crisis”.

Global financial services giant Citigroup, which announced about 52,000 job cuts globally, said the downsizing would have a limited impact on India. Citigroup has about 22,000 employees currently working in the country.

The aviation sector too continues to reel under the threat of lay-offs. Some airlines have already laid off pilots and duty crew members besides effecting salary cuts.

Leading private carrier Jet Airways last month announced termination of its 1,900 employees after it entered into a strategic alliance with the Kingfishers airlines. It later reversed the decision after the government’s intervention.

The aviation sector has now assured the government against lay-offs. Other sectos like telecom and software too have assured the government that they would not resort to layoffs as of now.

But small and medium scale enterprises, hit by the economic downturn, have cut jobs marginally to adjust costs.

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