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Haryana is the most recent state to try and implement job reservations for the private sector — but that’s easier said than done

Haryana is the most recent state to try and implement job reservations for the private sector — but that’s easier said than done
  • The Indian state of Haryana recently passed a law mandating that 75% of the jobs in the private sector, which pay up to ₹50,000 per month, should be reserved for locals.
  • Andhra Pradesh was the first such state to attempt passing such a law in the face of rising unemployment numbers, but was challenged in the high court for being unconstitutional.
  • Karnataka has also passed several provisions, most recently in October 2020, asking the private sector to give preference to local candidates but doesn’t have a mechanism to ensure that companies are compliant.
Haryana’s new reservation law is taking work from home to the next level. The state government is reserving 75% of private sector jobs, which pay up to ₹50,000 per month, for people belonging to the state.

Gurugram, which shares its border with New Delhi, is home to some of the biggest powerhouses in the sector like Google, Microsoft, Tata Consultancy Services (TCS), Infosys, Wipro, HCL Technologies and even Genpact.

“This will impact the business friendly image of the state and be detrimental to Gurugram’s growth trajectory as an IT-BPM hub,” said the IT industry body lobby NASSCOM in a statement.

Haryana is not the first state in India to push for such a move. Others like Maharashtra, Andhra Pradesh, Karnataka and Madhya Pradesh have already tried to reserve private jobs for locals.

But, all of them have run into hurdles of their own — from whether or not the law is constitutional, to having a mechanism to check whether or not companies are actually compliant.

Here’s a quick look at the states who have tried to reserve jobs for locals in the private sector and the hurdles they’re still facing:

Job reservations are a ‘mirage’

Job reservations are a ‘mirage’
The Maratha community in Maharashtra protesting for job reservations in the public and private sectorBCCL

According to Indian civil rights activist Anand Teltumbde, reservation is nothing but a mirage where structural problems — like the quality of education — remain unsolved. In many states, the reason unemployment is high and locals aren’t getting hired, is because companies say the candidates don’t have the right skills.

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Many colleges but no quality of education

Many colleges but no quality of education
BI India

The promise of mandating jobs for local citizens is only being made by the ‘developed states’. These states have managed to build engineering and arts colleges with companies investing in their infrastructure.

They have some of the highest number of private institutions within the state, yet when it comes to the job market, there’s no one willing to hire these graduates and post graduates.

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Andhra Pradesh was the first state to introduce job reservations in the private sector

Andhra Pradesh was the first state to introduce job reservations in the private sector
Pharmaceutical students on protest demanding that the government ensure jobs in the government and private sector for pharmacists in July 2019BCCL

This was done through a new law called the Andhra Pradesh Employment of Local Candidates in the Industries/Factories Bill, 2019.

The five-page bill asks existing industries to ensure 75% employment to the local candidates within three years from the date of commencement of the Act.

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The bill was accused of being ‘unconstitutional’

The bill was accused of being ‘unconstitutional’
BCCL

However, the bill has been challenged in the state high court for being unconstitutional. The reason it has come under fire is because critics claim that it violates Article 16(2) and (3) of the Constitution that prohibit discrimination in employment on the ground of place of residence.

Article 16(1) states that there shall be equal opportunity for the citizens in the matter of employment or appointment to any office under the State. Article 16(2) lays down the grounds on which the citizens should not be discriminated against for the purpose of employment or appointment to any office under the State.

Because it has been challenged in the high court, the law has not yet been implemented.

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Andhra Pradesh has the fifth highest number of private colleges

Andhra Pradesh has the fifth highest number of private colleges
BI India

Andhra Pradesh has the fifth most private colleges, according to the All India Survey on Higher Education (AISHE). In 2019, there were over 11.5 lakh students enrolling in these private institutions.

During the same year, a survey by the Centre for Monitoring Indian Economy (CMIE) said that more than one-fourth of the graduates and post graduates across the state were unemployed — that’s more than twice the national average at the time.

The survey noted that a worker who has only studied till Class 5 is 422 times more likely to be employed than a graduate in the state.

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Karnataka wants all private companies to hire Kannadigas

Karnataka wants all private companies to hire Kannadigas
The demand for job reservation in state and private companies by Kannadigas in Karnataka goes back at least four years as seen in this rally in Bengaluru on 23 December 2017BCCL

In October 2020, the Karnataka state government issued an order that natives of the state should be given priority when private companies, registered within the state, are looking to hire.

According to Law Minister JC Madhuswamy, this step was taken to protect job opportunities for ‘Kannadigas’ — those individuals who trace their ancestry back to the state of Karnataka.

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Karnataka’s unemployment rate was already improving

Karnataka’s unemployment rate was already improving
BI India

In 2017, the state recorded its highest ever unemployment rate of 6.7%. Come 2019, it was one of the lowest in the country at 0.7%.

The job quota issue made headlines due to the impact of COVID-19. The CMIE recorded unemployment in Karnataka to be as high as 29.8% in April.

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Implementing job reservation system has its own issues

Implementing job reservation system has its own issues
Kannada activists called for a Karnataka Bandh in February 2020 demanding the implementation of Sarojini Mahishi report on job reservation for KannadigasBCCL

Officials at the industries department in Karnataka told the Times of India that there is no mechanism to check whether locals have been hired as per the reservation system or not.

“There is no way to ascertain who is a local and who is from another state. Often, companies are forced to hire migrants because local applicants lack the required skills or demand higher wages,” they said.

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Madhya Pradesh wants 70% job reservation in private sector for locals

Madhya Pradesh wants 70% job reservation in private sector for locals
BI India

Madhya Pradesh Chief Minister Shivraj Singh Chouhan’s has promised to bring in a 70% private sector job reservation quota for locals.

According to lawyers, the law in Madhya Pradesh will suffer a fate similar to the job reservation quota in Andhra Pradesh — it will be considered unconstitutional and struck down in court.

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COVID-19 pressures Maharashtra for job reservations too

COVID-19 pressures Maharashtra for job reservations too
Small scale industries in the world's largest slum, Dharavi, are starting up again after migrants from UP and Bihar begin returning to MumbaiBCCL

In August 2020, the state government of Maharashtra announced that it would make it mandatory for the private sector to reserve 805 of its jobs of local residents who have been living in the state for more than 15 years.

According to Maharashtra’s industries minister Subash Desai, Maharashtra had already asked private companies to reserve 80% of their jobs for locals but the rule was not being followed. The new law would be a step in ensuring compliance.

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Even with a shortage, industrial sector didn’t want to employ Marathis

Even with a shortage, industrial sector didn’t want to employ Marathis
BI India

During COVID 19, despite the shortage of workers with migrant labour heading home, industries were reluctant to employ Marathi workers.

According to The Print, employers believe the local workers lack work discipline, are unwilling to learn new trades, are inclined towards political and trade unions — seen as pressure tactics by businesses — and are insistent on the implementation of the reservation quota.

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Maharashtra’s high electricity charge already has companies moving out

Maharashtra’s high electricity charge already has companies moving out
BI India

It doesn’t help that Maharashtra has one of the highest electricity tariffs for industrial units. The high charges are a consequence of the state subsidising power for farmers.

This has led to reluctance of corporates to set up units in the state and prefer neighbouring Gujarat where the energy tariff for industries is lower. With investors moving out and a bunch of other issues like rising real estate prices, unemployment in the state has also been increasing.

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Investments are not Haryana’s problem

Investments are not Haryana’s problem
BI India

Haryana has not been one to be short of investments. Areas like Gurugram are considered to be software technology hubs and sites of new-age entrepreneurship. Nonetheless, the industry has sought its human resources from outside the state.

Stakeholders have often pointed out that there is a lack of adequately skilled and locally available workforce, especially when it comes to tech-talent, which leaves them no choice but to hire from other parts of the country.

Hence, it’s no surprise that CMIE’s data shows that Haryana’s unemployment rate has been in excess of the national average since the past four years. In April 2020, around 40% of job seekers from the state returned empty-handed.

Instead of investing in skill development, Haryana — like some of the other Indian states when facing rising unemployment — has decided to go the route of job reservations in the private sector.

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