Cut pay but save jobs, says Pranab

Anil Anand & Agencies. New Delhi

Amid huge layoffs in certain sectors owing to the economic meltdown, the government on Friday sent out a strong message to industry that jobs must be retained even it meant going in for pay cuts.

“Jobs must be protected even if it means some reduction in compensation at various levels,” finance minister Pranab Mukherjee said at the International Labour Conference in New Delhi.

Mukherjee’s remarks came as labour minister Oscar Fernandes admitted in Parliament that far more jobs had been lost nationwide than the figure of 5,00,000 quoted in a survey by the National Labour Bureau.

Responding to a calling-attention motion by CPI MP Gurudas Dasgupta and two other leftist members, who had claimed that the government’s figure was wrong and over 20 lakh jobs had been lost, Fernandes said, “I agree that it is only a sample survey. It is not a report of the entire country. It does not reflect the total job loss in the country.”

The sample survey in certain sectors had indicated that 5,00,000 workers had lost their jobs in October-December 2008.

The finance minister’s recommendation to cut pay if it would help to save jobs found resonance with manpower consultants. Aneesh Laikar, CEO of the recruitment arm of HR solutions company Ikya Human Capital Solutions, said it was a sensible suggestion.

“Due to restructuring, some involuntary separation [job cuts] might happen,” he said. “But companies should take a benevolent approach and retain jobs.”

Both Fernandes and Mukherjee said the government was going all out to meet the challenge.

Fernandes said a crisis group had been set up to monitor the situation and the labour ministers’ conference was discussing the issue threadbare.

Discussions are also on to extend the National Rural Employment Guarantee Scheme (NREGS) to urban areas.

Fernandes said the government was providing unemployment allowance equivalent to six months’ salary in 12 instalments to workers in the organised sector.

The finance minister said the government was ensuring flow of credit to boost trade, investment, and consumption and to stimulate additional demand through public and private expenditure.

Mukherjee later told reporters that in the interim budget he had talked of boosting investment in infrastructure and in housing and real estate, adding that the government was providing adequate resources for programmes like NREGS and Bharat Nirman.

“If the work can be stepped up to a considerable extent, these are directly linked with employment creation and also demand creation. (If) more and more good roads are constructed, cement, steel, everything will be required. They will get jobs. These type of programmes should be expedited and adequate resources will be provided,” he said.

Hit by the global financial meltdown, India’s economic growth in the current fiscal is expected to be a moderate 7.1% from 9% in the previous fiscal.

Exports, one of the worst-hit sectors, started shrinking in October after seven years. Industrial production too moved into the negative zone in October. The latest data show that output in December declined 2%.