Spotlight
New Delhi, 19 April 2021
Haryana Job Law
REGRESSIVE FOR INDUSTRIAL BENEFIT
By Moin Qazi
There have been recurrent agendas in the
political discourse arguing for reservations for locals in jobs. The idea has enjoyed
a popular resurgence particularly in regional electoral politics. More often
the logic is grounded in populism and is meant to burnish the credentials of
politicians with the voters. Such quotas make for both poor economics and poor
politics. Regional political leaders will normally do what is politically
expedient, securing a larger share of a small number of new jobs for their own
residents. After all, these individuals are part of their voting pool, not
out-of-state workers who are registered as voters in their home States.
The latest example onboard this bandwagon is
Haryana. Its local job quota may do more harm than good, especially in
Gurugram, one of the biggest startup hubs in the country. It is the epicentre for
myriad industries including outsourcing, IT services, consumer goods,
automobiles and electronics. With Manesar, it is home to offices of Pepsi,
Coca-Cola, Nestle, Google, Reckitt Benckiser Hindustan Unilever, American
Express, Samsung and others, as well as factories of Maruti Suzuki and Hero
MotoCorp.
The New Haryana State Employment of Local
Candidates Act, 2020, in the footsteps of States such as Maharashtra, Andhra Pradesh, Karnataka and Madhya Pradesh, proposes
to reserve at least 75% of jobs in private sector for locals, with a monthly
remuneration of up to Rs 50,000. The quota will be applicable for a period of
10 years after it is notified by the government. A person who is domiciled in
Haryana will be eligible to get benefit of job reservation. The law stipulates
that companies can hire from outside the State if suitable local candidates
cannot be found but the government has to be informed.
Gurugram is the world’s Business
Promotion Management capital, employing about 5% of global BPM workforce and 13%
of total Indian BPM workforce. The IT and IT-enabled services sector
contributes about 10% to Haryana’s GDP and makes up for over 50% of the State’s
exports. It is India’s largest auto hub and produces 50% of the country's
passenger vehicles, 60% of motorcycles and 11% of the tractors. Of the total
250 original equipment manufacturers, 50% are present in Haryana, which has a
strong base of 120,000 small and medium enterprises, which provide a network of
auto ancillary companies. The automotive industry accounts for over 25% of its GDP,
employs over 1 million, and has investments to the tune of Rs 40,000 crore.
Haryana is facing immense competition from
other States that have now started attracting industrial investment and are offering
liberal policies and employment-incentive schemes. The new local job law could
severely reduce new investments in Haryana. Investors and entrepreneurs need to
source the best resources to be competitive and successful. If companies are
forced in such a regressive straightjacket and compelled to hire local
candidates alone, irrespective of their skills, talent, or suitability for the
job, they are likely to look beyond the State and avoid operating (or
significantly reduce their business activities) in such locations. This move
goes against the basic principle of meritocracy that acts as the foundation for
businesses to grow and remain competitive.
However, such laws violate
Article 19(1)(d), (e), and (g) of the Constitution which promises all citizens
the fundamental right to move freely throughout India, reside or settle in any
part of India, and to practice any profession, occupation, trade or business.
Article 16(2) clearly prohibits discrimination based on place of birth. The
only enabling provision to make special avenues or opportunities in public
employment for any class of citizens is provided under Article 16(3), which
empowers Parliament alone to undertake such an exercise and not the State
legislatures.
The Supreme Court has largely been against
local reservations. In the case of Pradeep Jain Vs Union of India, the Court
had found policies of reserving jobs for sons of the soil as violative of the
Constitution. However, the Court did not provide an express rule against it
because the issues of the case were based on a different question on the right
to equality. Prima facie, the apex court observed, that this would seem to be
constitutionally impermissible though it chose not to express any definite opinion.
In 1995, in case of Sunanda Reddy Vs state of
Andhra Pradesh, it upheld the decision in Pradeep Jain and struck down the
policy that allowed an extra 5% weightage in marks for candidates with Telugu
as a medium of their instruction. In this judgment, the Court quoted from the
Pradeep Jain Judgement: Now if India is one nation and there is only one
citizenship, namely, citizenship of India, and every citizen has a right to
move freely throughout the territory of India and to reside and settle in any
part of India…. it is difficult to see how a citizen having his permanent home
in Tamil Nadu or speaking Tamil language can be regarded as an outsider in
Uttar Pradesh….To regard him as an outsider would be to deny him his
constitutional rights and to derecognise the essential unity and integrity of
the country by treating it as if it were a mere conglomeration of independent
States”.
Modern management also espouses diversity in
workforce in order to promote a healthy industrial climate. Experience of the
past suggests that preference to locals by companies has led to intractable
industrial problems. Local monopolies in staff profiles have given rise to
trade unions, which have been patronised by local politicians and have severely
affected productivity and jeopardised working of these organizations. In fact, complex
labour regulations have already retarded formal job creation and discouraged promotion
of labour-intensive production techniques.
This approach is aimed more at garnering
political support of the local youth and has little to do with the State’s long
term economic development. While it may fetch immediate political gains it can
have serious long term economic consequences. Modern business has become
extremely competitive, and in the absence of monopolistic controls, the most
efficient and competitive businesses alone can survive and prosper. We are
seeing how the public sector is slowly collapsing on account of misguided
political agendas. There is need to see beyond purely myopic horizons and focus
on long term implications for the economy.
India’s industrial growth has been driven by
its comparative advantage in areas such as information technology and high-end
manufacturing that do not create enough new jobs, given India’s youthful
demographic profile and its fast-growing workforce. Industrial laws are a major
reason for this phenomenon. The government must encourage free flow of manpower;
it can improve social harmony and curb local chauvinism. The cross cultural
exchange can also lead to cross-pollination of ideas and improve not just social
harmony but enrich learning and innovation. It could also promote a healthier
work ethic, something India woefully lacks.
An industry requires skilled workforce to
produce high quality products that are globally competitive. Hiring has to be
done on the basis of merit and talent rather than candidate’s domicile. The
reason for the industry to employ candidates from outside the State is due to
the shortage of adequately skilled and locally available manpower. Mandating private industry to provide jobs based on a
domicile criterion will severely affect efficiency of these organisations as it
will be forced to compromise on job specific skillset, experience and
competitiveness. A rethink is necessary--practical rather than political.
---INFA
(Copyright,
India News & Feature Alliance)
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