Mandated exercise, regardless of its health benefits, is way down the slippery slope. But it would make a great free time slot to pump in pro-state propaganda and jargon on the loud speakers, waste not, want not.

You know, the usual argument I hear from pro-choicers is that it's their body and they can do with it as they please, surely this applies to smoking, eating candy, and not exercising. As for exercise making people better workers, it's true enough, we do mandatory exercise in the US military, very few people like doing it and many think that making it mandatory actually makes a lot of people in worse shape than they otherwise would be. But being in good shape is beneficial, it even cuts your stress levels, unless staying in good shape becomes one of your main sources of stress.

Just to attack this at a very specific level, at implementation, as soon as it happens you will have people going to the doc to find any possible way they can to get out of it. You will have many people who would otherwise be okay with it who now object on moral grounds and won't do it. You will have people ask for fitness tests, so they can avoid doing it during worktime, you will have people asking that those fitness scores be used as part of promotion system, so someone who is more fit gets promoted over someone who is an otherwise equal worker. You will have people who find ways to slide around the exercise without punishment who stir resentment in others. You will have people who literally stand next to a treadmill the whole time or put it on it's lowest setting, and you will have to employ people to monitor them or enforce it. And for those who out right refuse, you will have to fire them, and that will cause all sorts of problems.

I don't think you thought this part through too well, nor many of the others. Sound good in practice, horrible in implementation.