Coronavirus: No layoffs, no salary cuts, Modi government’s advisory to companies

By Ramarko Sengupta|23rd Mar 2020
However, the Narendra Modi government is yet to announce any fiscal or monetary stimulus, in the wake of the COVID-19 or novel coronavirus crisis.
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The Narendra Modi government has issued an advisory to both private and public companies to not lay off employees or cut their salaries, in the wake of the COVID-19 or novel coronavirus crisis


The advisory from the Ministry of Labour and Employment, dated March 20 reads: “In the backdrop of such challenging situation, all the employers of public/ private establishments are advised to extend their coordination by not terminating their employees, particularly casual or contractual workers from job or reduce their wages. [sic]”


Narendra Modi



The government’s advisory goes on to add, “If any worker takes leave he (/she) should be deemed to be on duty without any consequential deduction in wages for this period.”


The novel coronavirus has so far killed eight people in India and infected 425. Across the world, the virus has taken more than 15,000 lives and infected over 3,51,000, according to real-time population data tracker Worldometer


Millions of people across India have been put under lockdown, in a bid to contain the spread of the novel coronavirus. A total of 80 districts across the country, including major cities such as New Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, and Kolkata have been placed under strict lockdown restricting movement, travel, and work till March 31.


The government’s advisory to employers also highlights the fact that job cuts and wage cuts would “further deepen the crises and will not only weaken the financial condition of the employee but will also hamper their morale to combat” the pandemic. 


The World Health Organisation declared the novel coronavirus a global pandemic on March 11.


The Indian economy has been going through its worst slowdown in a decade. The coronavirus crisis will only compound the country’s economic troubles. India's unemployment rate rose to 7.78 percent in February, the highest since October 2019, according to data from the Centre for Monitoring Indian Economy (CMIE).


The country’s GDP (Gross Domestic Product) growth fell to 4.7 percent in the third quarter of the current fiscal year. The coronavirus crisis is likely to drag growth further down, in the fourth quarter.


The Modi government is yet to announce any fiscal or monetary stimulus to deal with the coronavirus crisis or the economic slowdown. 


India Inc. through industry associations such as CII (Confederation of Indian Industry) and Assocham (The Associated Chambers of Commerce and Industry of India) has written to Prime Minister Modi and Finance Minister Nirmala Sitharaman, seeking measures such as a year-long moratorium by banks on debt repayment, tax cuts, and fiscal stimulus amounting to Rs 2 lakh crore to needy citizens through Aadhaar-based direct benefit transfer.


"Fiscal and monetary stimulus measures need to be announced urgently," CII Director General Chandrajit Banerjee said.


Last week, Canada announced a fiscal-stimulus and tax-deferral package amounting to nearly 4 percent of its gross domestic product, in a bid to contain the economic damage caused by the novel coronavirus.


The CII has written to PM Modi seeking a fiscal stimulus of one percent of India’s GDP amounting to Rs 2 lakh crore to needy citizens through Aadhaar-based direct benefit transfer.


(Edited by Suman Singh)

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