February 28, 2020
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Exit Policy

Exit Policy
THIS, of course, is arguably the most politically sensitive part of the economic reforms. Manmohanomics gave it a wide berth. "No country has given blanket power of dismissal or retrenchment," says Mukherjee. An NF-LF government will not countenance any talk of an exit policy, and the BJP is delightfully vague when it says that its government would "not allow an exit policy without fulfilling corresponding obligations to labour."

Though exit policy topped its agenda in the first flush of liberalisation, today Indian industry is divided on the issue. Narang and Modi present one view. Says Narang: "Without an exit policy, Indian companies will become unproductive and uncompetitive." Agrees Modi: "In a free market and competitive economy, the question of having surplus labour does not arise."

 Others point to the social responsibility of business. V. Balaraman, president of the Indian Leather Manufacturers Association, says that there is a clearer realisation today that the social costs of any change must be minimal. Bhargava of Eicher says that an exit policy does not make sense in the absence of a strong social security system like in the West.

Says Vinay Rai, chairman, Group Usha: "Instead of retrenchment, we should be working on upgrading skills to make manpower a formidable competitive advantage for our country." There seems to be some sort of politically-correct consensus evolving in industry that retraining and redeployment are preferable to retrenchment. All political parties agree with that.

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