Click to play videoCommerce and Industry Minister Kamal Nath says there will be lesser jobs on offer in the Indian industry but existing jobs won’t be affected. In an exclusive interview with CNN-IBN’s Karan Thapar, Kamal Nath also said Indian companies must learn to live with lower profits, instead of thinking about laying off employees.
Karan Thapar: Wipro, Infosys, Satyam all of them could begin to suffer, they could find contracts be cancelled, they may be under pressure themselves to contract and therefore may lay off people.
Kamal Nath: I don't think so. What could perhaps happen is, and what they have said is, that they may not be able to create the same number of jobs.
Karan Thapar: So growth in jobs may be checked.
Kamal Nath: Growth in employment generation will be affected
Karan Thapar: But you are saying actual levels of employment that exist should not be affected.
Kamal Nath: Will not be affected.
Karan Thapar: Regardless of whether you are talking about exports, manufacturing, or services.
Kamal Nath: We must remember that the curve which we were on was very sharp. Now the curve will not be that sharp, that’s the only difference. It's not that we are going to start going down.
Kamal Nath also said that Indian companies must learn to live with lower profits, instead of thinking about laying off employees.
Kamal Nath: We must recognise, that in the last four years companies have made 50-60 per cent profits. In the West and in other parts of the world they are struggling with five to 10 per cent profits. So if their profits are coming to 30 per cent, the Indian industry must live with this 30 per cent. You can't have those huge profits for ever.
Karan Thapar: What happens when a captain of industry turns around and says to you, this doesn't make economic sense, my business is to boost profits, I am not in the business of social engineering.
Kamal Nath: I think it makes a lot of economic sense when you make 30 per cent profit, and if you compare internationally with any profits, those made by Indian companies are highest in the world.
The Minister has also promised the Government will pump in Rs 25,000 crore into the economy in the next six months. He said there will be no printing of new money, it will be entirely generated by reallocation of Government’s revenue earnings
Kamal Nath: Well, we will definitely have to pump in close to Rs 1,000 crore on an annual basis in definitive projects - in power sector Rs 1,000 crore, in roads 1,000 crore. Totally I think we would need to pump in Rs 20,000 to 25,000 crore in the next six months to keep this machine moving.
Karan Thapar: Where's this money going to come from? Rs 25,000 crore in six months is a huge sum of money.
Kamal Nath: It has to be reallocated between existing Goevrnment revenues, and we are very cautious of printing notes, we are very conscious of financial management, let’s be very clear on that.
Karan Thapar: So you are saying there will be no printing of notes?
Kamal Nath: Within the confines of good financial management.
Karan Thapar: How confident are you, that you can still achieve 7.5 per cent or at least 7 per cent growth, or is that a slight overstatement?
Kamal Nath: No, I don't think it's an overstatement at all - we are on track to achieve 7.5 and excess of 7.5 per cent this year.
Karan Thapar: Politicians usually say that when questioned. Do you really mean it, or you are simply saying it because you need to boost morale and speaking the truth is too difficult?
Kamal Nath: No it's not. It's reflected in figures.
(For updates you can share with your friends, follow IBNLive on Facebook, Twitter, Google+ and Pinterest)
More on IBNLive Right Now
MOST SHARED
PHOTOGALLERY
