FM hints at job cuts

CALCUTTA, Nov 5 (UNI, PTI) — The Union Finance Minister, Mr Yashwant Sinha, today hinted at more job cuts, slash in government subsidies and a string of other harsh measures to pave the way for the second generation reforms in the country.

Speaking at a seminar, organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) here, Mr Sinha called for bringing more flexibility in labour laws to ensure higher productivity.

"There has to be a clear-cut policy on hire and fire. The workers have to be productive. The existing laws protect the interests of labourers at the cost of productivity," he told reporters.

The minister also reaffirmed the government’s intention to go for partial privatisation in certain areas of government organisations and invite private participation in the insurance and banking sectors as part of the second generation reforms.

The Finance Minister said the government was gearing up for a strict financial management to minimise the fiscal deficit which was posing a great threat to the country’s future.

The Finance Minister said the government would initiate zero-based budgeting from next year and a notification had already been issued to the different ministries.

The decision had been taken to control expenditure which was going beyond limits.

Under the zero-based budgeting a fresh look is taken at all expenses planned to be incurred during a year and all relief and concessions given in the earlier period have to be justified afresh to be carried forward.

An attempt to introduce the concept was earlier made in the eighties, he said adding “however, it did not work out then”.

On fiscal deficit, the government was keen to limit its borrowings from the market which were expected to be around Rs 83,000 crore in the current fiscal.

Higher market borrowings crowd out private borrowers and push up interest rates.

Mr Sinha also hinted that the government might enact a legislation relating to financial responsibility in the next session of Parliament.

This year, the government would shell out Rs 90,000 crore as interests on loans taken in the past, he said.

On the forthcoming WTO ministerial conference in Seattle, Mr Sinha said the country’s interests would be protected and India would resist efforts for lowering the bound rates of duty.

The Finance Minister said the interests of the working class would be protected in the second generation reforms which were underway.

The results seven years of first generation of reforms, which began in 1991, had showed that employment creation had not increased. Instead more people were out of jobs as a result of the Voluntary Retirement Scheme.

Saying that there was little mobility among workers in India, the Finance Minister almost brushed aside FICCI President Sudhir Jalan’s suggestion that the industry should be given the right to “hire and fire” and also for recycling of the labour.

Admitting that there was a need for flexible labour legislations, Sinha also implied that till there was enough scope for self-employment, the chamber should not have any cause for cheer as far as labour was concerned.

He said the labour reforms would have to be ushered in by creating alternative employment opportunities in the services sector and knowledge-based industries.

Calling for a change in the mindset of the government, industry, trade unions and political parties, Mr Sinha said the second phase would be successful only if all four entities worked in cohesion.