Have TCS started letting people out of the project due to Budget Issues?

Yes we are instructed but mostly due to non performance or people who received C band

They always do that unless that person is very critical to the project.

It is either dump a lot of work on that person so they can get maximum value out of that person for their pay or gradually reduce the dependency and release them later. Also depends on how easy it is for them to work with that person.

Yes

Yes

Yes, soon you will receive communication from your higher management stating "do not expect promotion or significant hikes for next 2 years, if you want to leave, you are free to go" and you will be shown the way out.