PM Tells India Inc Not to Cut Jobs

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Nov. 4 – While assuring Indian companies that the government would take affirmative steps to reign in the global meltdown, Prime Minister Manmohan Singh requested industry leaders not to cut jobs in the near future. In order to prevent a drastic slowdown the government has already cut reserve requirements of banks and duties on aviation fuel and steel.

Recent changes taken to shore up the economy also had their effect on the Indian rupee which rose by the most in a decade. The rupee climbed 1.7 percent to 48.645 a dollar at the 5 p.m. close in Mumbai, according to data compiled by Bloomberg. That is the biggest advance since Jan. 19, 1998.

To prevent the economy from falling into a tailspin, Mr Singh told the Economic Times that the government would invest more in infrastructure, speed up social spending and take other steps to maintain growth and stability in the economy. “The government will take all necessary monetary and fiscal policy measures on the domestic front to protect our growth rates,” a government statement issued after the meeting quoted Mr Singh as saying.

India's GDP is expected to grow at 7.5-8 percent this year, lower than last years 9 percent growth. Inflation on the other hand has cooled 10.68% during the week to October 18, falling below 11 percent for the first time since May this year. It hit 12.76 percent in August.

According to Reuters, Foreign funds have sold nearly US$13 billion worth of Indian stocks in 2008 after buying a record net US$17.4 billion last year. India's import bill was up 43.3 percent in September from a year earlier to US$24.4 billion, and the trade deficit for April-September widened to US$59.8 billion from US$39.1 billion in the same six months last year.

Export growth in dollar terms slowed to an annual rate of 10.4 percent in September, the slowest pace in 18 months.