Reservation on hiring

Context: Government of Haryana’s November 6 notification stipulating 75% reservation for locals in private sector jobs with effect from January 15 next year reflects some of the practical difficulties involved in implementing this politically motivated exercise.

Issues associated with Haryana State Employment of Local Candidates Act, 2020

• Violation of basic constitutional rights: Such as right to freedom to reside in any part of the country and practise any occupation or business.
• Diminish ease of doing business dynamics at a time when attracting investment is becoming critical.
  • Business bedrock of Gurugram, the state’s principal revenue-generating district to loose out.
• Inherent Irony: That law is unlikely to assuage the demands of locals or satisfy industry as most industries are dependent on non-local employees.
• Diminishes job opportunities for workers: Haryana’s IT and construction businesses and the myriad ancillary industries, and services that have developed around them have been massive employers of Indians from other states, mostly from the east and north-east.
• Raise costs significantly for employers: As those invested in less mobile capital, such as medium or large factories, may have to raise salaries as they seek to cross the Rs 30,000-threshold to keep essential non-local employees on their books.
• Steep costs of non-compliance: Involving a penalty of Rs 10,000 to Rs 50,000 with additional penalty for every day that the contravention continues
• Politically motivated exercise: Its context lies in the violent Jat agitations for government job reservations after a state law granting a 10 per cent quota for Jats and five other castes in government jobs and educational institutions is held in abeyance, following directions from the judiciary
• Exponential expansion of the inspector raj: Exemption on hiring non-domicile employees if adequate numbers of locals of equivalent qualifications are unavailable for the job can be granted only by a designated officer. 
• Other issues: Shorter duration domicile rule may benefit non-locals who have lived in the state for at least five years. But, few migrant workers in low income category are likely to have documents registered in the state.

Conclusion: This is an illogical legislation to enforce in a state that is suffering high unemployment and urgently requires more investment.