Hard times: Minister says accept layoffs

The country’s economy is under pressure and there will be layoffs, Union Labour Minister Oscar Fernandes has said.

“I would not like any layoffs but reality is reality. If there is no demand for things one produces and there is no market, he has to lay-off,” he told Pallavi Ghosh, CNN-IBN’s Chief Political Correspondent.

“Our growth is on the plus side, (but) because of the recession definitely impact will be felt by way of cut in exports and things like that,” he told CNN-IBN’s Pallavi Ghosh.

Fernandes appealed banks to give loans to the “small man” and not just concentrate on big businesses. “The small man should again get an entry into the banks, so that whatever they save also gets into the banks. Otherwise the small man doesn’t know where to invest.”

The minister’s statement may indicate a change in the Government’s stand on layoffs. Early November, Prime Minister Manmohan Singh had asked the Indian industry not to resort to layoffs.

“While every effort needs to be made to cut cost and raise productivity, I hope there will be no knee-jerk reaction such as large-scale layoffs, which may lead to a negative spiral,” Singh had said.

Finance Minister P Chidambaram, too, on Monday urged companies not to take extreme measures like cutting production and instead wanted them to slash prices of their products. "Hotels must cut tariffs; airlines must cut prices; real estate must cut rates of apartments and homes they sell; car makers and two-wheeler makers must cut prices," said Chidambaram.

Fernandes’ statement comes after international banking giants announced they are cutting hundreds of jobs. It is not clear yet whether the banks’ decision would affect India.