Why companies force people to switch - thoughts of a junior 'Indian IT' developer

Okay, so you got campus placed. A major Indian service firm has hired you along with thousands of others. You get trained before they post you and is offered something like 3.5 LPA. But why we get hired in the first place? 2 reasons, growth and attrition.
Let's take a look at attrition. Just like how you were hired, some years back, your seniors were hired. Post training and getting allocated to projects, they started contributing to the team in say 6 months (the eagerness of a fresher 😁). Let's assume 10 people who were hired like this for simplicity sake. Of these one is highly aspirational and is contributing big whereas 4 are pretty intelligent and dedicated although not as break neck dedicated as the first. Remaining 2 are not so bright but yet dedicated and lets think the last 3 have other plans (studies or so). After the initial 6 months, the first 5 gets more assignments which are more challenging and they learn more and more. This has a compounding effecy on their quality of work. In about 1 year and the first exceptional performer fellow catches up with the quality of work done by a similar 4 year experienced hire from a same tier college. And in 6 more months the remaining 4 catch up. Once it is almost 3 years the aspirational one gets another offer and switches while the remaining 4, has developed a comfort zone, attachment etc to their place of work and feel hesitant to leave because everything is fine. A lateral is brought in to replace the first guy who does similar work to the remaining 4 but he is paid 1.5 times more as he is a lateral. Our 4 friends take home, let's say 28000 per month while the lateral gets 45K. Now what do we have here? We have 4 good performers who are not rewarded for their work and a new guy who is equal comes in and gets paid more? Wth??
Let's look at from capitalist's perspective, how much it would have cost if they were rewarded. Let's assume that all of the 5 got a raise to 40K per month which is equal to the lateral hire pay in the market for their experience. Cost of keeping 5 developers is 40K * 5 which is 800K per month. This is definitely higher than handling an exception scenario of an exit by substitution with a higher paid lateral. By this time the last 3 have left company for their alternate plans and new freshers are brought in. They get to work with the 4 seniors who have right now some sort of attachment too with this working environment (contributes to building employee morale in the new guys). The freshers start contributing in 6 months and the cycle continues.
Thats my theory. If any one would like to add or discuss, please feel free to do so.