FICCI President rules out large scale lay-offs
Mr. Rajeev Chandrasekhar, MP and President, FICCI has ruled out any immediate threat of large-scale layoffs in the industry. FICCI is of the firm belief that the fundamentals of the Indian economy are strong and that we will be able to avoid any adverse development on the investment and employment front if concerns of the real economy are taken care of.
Reacting to the emerging situation, Mr. Rajeev Chandrasekhar, FICCI observed “I have been consistent over the last few months in saying that the Indian Economy is facing some serious challenges as a result of the many quarters of tight monetary policy and the more recent International Banking crisis! However we do not believe any immediate threats exist of the form that Assocham is alluding to.
We should not panic. This is a time for cool heads and a well-planned strategy that has as its twin objectives a) protecting our economy from any collateral damage from this international crisis and b) putting growth back as the primary focus of government policy.”
Given the existing situation, FICCI feels that there is a clear danger of fresh investments, incremental employment and additional exports getting affected in the months ahead. In fact signs of such a thing happening are already visible. FICCI's Business Confidence Surveys and Export Surveys have shown that Indian industry and the exporting community are apprehensive about their near term performance. However, while this situation certainly demands attention there is no need to panic.
Alluding to the recent steps taken by the monetary authority to enhance availability of liquidity in the system, Mr. Chandrasekhar said that these are clearly inadequate and what is needed is a comprehensive plan with simultaneous use of all measures available.
On sustaining the growth momentum of the economy and for generating additional employment, Mr. Chandrasekhar observed “We believe that a number of additional steps and policy initiatives are required to provide a systematic and steady path to putting the economy back on the growth track.
A steady, calm and complete approach is what is required at this very critical stage of expansion of our economy, which as you realize is being driven primarily by private investments. These private projects are all at a critical stage of investments / expansion and any mis-steps at this stage could prove extremely disruptive to the real economy in the future.”
On the issue of employment, FICCI observed that laying off people in the current situation is not an option that companies have. This is because the labour laws in the country prevent any sudden compression in the workforce. Further, as far as management and officer level people are concerned, for many companies these are assets in which huge investments have been made over time. As a result laying off people would adversely affect the companies.
FICCI strongly mentioned that in the present circumstances the critical question is not how many jobs would be lost, but rather how the growth momentum could be maintained to generate gainful employment for the additional 12 million people who would be joining the workforce annually. Feedback gathered by FICCI shows that it is fresh hiring that has gone into a slowdown mode and therefore steps must be taken to revive growth and higher growth will translate into higher employment.