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The government on Monday urged the captains of industry not to cut jobs in light of the economic slowdown to which industry seems to have agreed but has entered a caveat — it would not retrench people if the crisis did not become any worse but, at the same, it was not likely to hire more people.

At a special meeting with top corporate leaders, including Reliance chief Mukesh Ambani, ICICI boss K V Kamath, Airtel chairman Sunil Mittal, Essar chief Shashi Ruia, DLF head K P Singh, Videocon’s Rajkumar Dhoot and Ficci president Rajeev Chandrashekhar, Prime Minister Manmohan Singh announced that a six-member committee was being set up to daily monitor the financial crisis.

In a related move, Raghuram Rajan, professor of finance at the University of Chicago’s graduate business school, was appointed as honorary economic adviser. Rajan was previously economic counsellor and director of research at IMF and his appointment is seen as a move to bring in improved understanding of the global aspects of the crisis. The expert group is clearly part of the government’s bid to signal that it is serious about insulating the economy to the extent possible.

The PM signalled that banks would lower interest rates to make credit more easily available. He urged industry not to resort to “knee jerk” reactions like job cuts while pointing out that high savings and investment rates had been a strength in the past. He said large scale lay offs would lead to a negative spiral and that industry must bear in mind its social obligations while dealing with the crisis. read at times of india