India is braced for a winter of discontent as the economy slows and millions of disgruntled workers, from Bombay's taxi drivers to the staff of the central bank, prepare to strike.

“Layoffs, closures and sackings have begun in a big way,” MK Pandhe, general secretary of the Centre of Indian Trade Unions, said. “We are preparing for co-ordinated action.”

In the wake of a global downturn, Indian companies in sectors that had been growing at breakneck pace, such as aviation and IT, are now shedding staff. However, the idea of mass lay-offs remains hugely controversial in a country where there is no welfare system. This week, in the highest-profile showdown between an employer and its workers so far, it was the former who blinked first.

After suffering massive losses and defaulting on fuel payments, Jet Airways, India's largest private sector airline, shocked the nation by sacking 1,900 cabin crew on Wednesday.

On Thursday, following a public outcry and a threat from one extremist political party to prevent Jet's planes from landing at Bombay, the airline made a stunning U-turn and took the laid-off staff back.

“The employees are like family members to me,” said Naresh Goyal, Jet's chairman, who claimed he had been out of town and unaware of the decision to cull 15 per cent of his company's workforce. “I was mentally disturbed when I saw tears in their eyes.”

Experts suggest such patrician attitudes are unlikely to impress Jet's investors, who have seen its market value tumble more than 75 per cent.

Jet says it still needs to cut costs, in common with many other Indian businesses. GDP growth predictions have already been slashed to about 7percent this year, from close to 9 per cent, and may fall further. Gurcharan Das, one of India's most respected business commentators, said: “Make no mistake, that 2 per cent fall is going to hurt. Jet has sent out the wrong signal. India is going to have to get used to people losing jobs in large numbers.”

So far, however, India's workers have given no indication that they will go quietly. Last week, for the first time in 13 years, staff at the Bank of India called for a strike over pensions. On Thursday, 55,000 taxi drivers brought Bombay to a halt when they challenged laws that would ban the use of taxis more than 25 years old and put thousands out of work.

Hundreds of disputes erupt every day and one led to the murder last month of Lalit Kishore Choudhary, the chief executive of the Indian arm of Graziano Transmissioni, an Italian car parts manufacturer, who was bludgeoned to death by a mob of sacked workers.

Oscar Fernandes, the Indian Minister for Labour and Employment, suggested that the murder “should serve as a warning for management”, a remark for which he later apologised.

However, the unions say that similar incidents can be expected. “The workers are growing angrier by the day,” Mr Pandhe said.

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