JACOB PEENIKAPARAMBIL - Haryana is the latest member to join the club of states that have taken the misguided course of reserving jobs for the locals in the private sector. ‘The Employment of Local Candidates Bill 2020’, passed by the Haryana assembly in November last year and notified by the government on March 2, requires companies, societies and Trusts to reserve 75% jobs with a gross monthly salary of less than Rs 50,000 for people born in the state or those who have lived there for at least five years. According to the government guidelines, the companies must register details of all employees receiving up to ₹ 50,000 a month, and the failure to do so within three months of the law coming into force will attract penalties.
Politicians have a tendency to adopt shortcuts to solve problems that require careful planning and hard work. Job creation has been a huge challenge for the governments, as more than 12 million young people enter the working-age population every year in India. The pandemic Covid 19 accompanied by lockdown for months worsened the employment situation. The politicians often make overly ambitious promises to electorally influence people without thinking much about the feasibility and viability of the promises. One such promise is reservation of jobs in the private sector.
Veteran journalist Pratap Bhanu Mehta in an article qualified the Haryana law “constitutionally dubious, economically myopic, socially divisive and politically cynical”. First of all, the bill violates the letter and spirit of the constitution of India. The Constitution prohibits discrimination based on place of birth. The Haryana law goes against the right to move freely in the country and reside and settle in any part of it, the right to carry out any trade or profession. Hopefully, the Supreme Court will decide on the constitutionality of the law.
Secondly, job reservation for the locals is an emotional issue and it can fuel the flames of localism. Hence it can cause damage to the unity and integrity of the nation. Thirdly, as indicated by Pratap Bhanu Mehta, there is patent class discrimination. If a person is rich, privileged or highly skilled, there are no entry barriers in accessing any labour market. But entry barriers are put only on lower-skilled migrants. It is an Indian version of an H-IB visa.
The most damaging impact of the law could be withdrawal of companies or the reluctance of new investors to invest in the state. The companies always look for skilled labour force. According to the new law, employers are legally bound to train the local people, if the required skills are not locally available. This is going to discourage the new investors. Ultimately the youth of the state can become the losers. Instead of taking recourse to parochialism, the states should make meaningful investments in skill development. The central government has to enter into dialogue with the state governments and dissuade them from adopting such restrictive laws that can damage the economic growth, job creation and the unity of the nation.
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