India Inc on Monday appeared to heed Prime Minister Manmohan Singh's call to avoid large-scale lay-offs following the slowdown that is impacting industrial production and overall economic growth.
"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. Industry must bear in mind its societal obligations in coping with the effects of this global crisis," Singh told captains of Indian industry at a meeting in New Delhi on Monday.
Meanwhile, the government also decided to set up a high-powered committee within the next two days to work on ways to ensure that the credit and liquidity crunch and other problems that industry faces are resolved and the growth momentum is sustained.
"The committee may be headed either by the prime minister or the finance minister," a senior government official told reporters after the meeting.
This will be the second such committee that the government is setting up.
Earlier, the finance ministry had constituted a committee of bankers and officials to examine the liquidity crunch. Many of the committee's suggestions were implemented.
Singh assured the assembled business leaders that his government would take necessary monetary and fiscal steps to boost economic growth.
Pointing to increased investment in infrastructure, he said the government will review projects in order
to ensure they are implemented faster.
Those who attended Monday's meeting included Ratan Tata, Mukesh Ambani, Sunil Mittal, K V Kamath, Shashi Ruia, Deepak Parekh and KP Singh among others.
Finance Minister P Chidambaram, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Reserve Bank of India Governor D Subbarao also attended.
Hours after Singh called on industry to avoid retrenchment, Bharti Enterprises Chairman Sunil Mittal said he agreed with the prime minister.
"We have given the government a commitment that we will not lay off people for at least three quarters. If things get worse and pressure mounts then this question could be laid on the table, but at present there is no such proposition," Mittal said.
He added the recent incident in civil aviation was an isolated case. Mittal was referring to Jet Airways' recent attempt to lay off 1,900 staff, a decision that was reversed after employees held public protests.
Federation of Indian Chambers of Commerce and Industry president Rajeev Chandrasekhar said: "Industry has a social and moral responsibility and it will be responsible by not resorting to such measures."
On his part, Sajjan Jindal, president, Assocham, said India would never favour a 'hire and fire policy like in the West'.
Confederation of Indian Industry president KV Kamath said the Indian government is aware of challenges facing industry and is active in trying to resolve them.