Question

Bring out the arguments surrounding the issue of some states reserving jobs for locals in the private sector.​

Answer 1

In recent times, states such as Andhra Pradesh and Haryana have pàssed bills to provide 75% job reservation to locals in private enterprises.

■ Arguments for demand for local jobs :-

• Rising unemployment :- With unemployment figures likely to rise drastically especially in the backdrop of COVID-19 pandemic and lack of access to skills and low employability, these demands are only going to rise in the future. The issue is further accentuated by the fact that jobs are available in limited areas, which also see greater labour market competition from migrants from other areas as well.

• Agrarian distress :- The agrarian sector is under tremendous stress across the country, and young people are looking to move out of the sector and are seeking local jobs.

• Rehabilitation of landowners :- Since most of the land requirement is met by acquiring private agricultural lands, the landowners are being displaced and deprived of their occupation and thereby the associated loss of income generates demand for local level jobs.

• Populist demand :- A survey done by the Centre for the Study of Developing Societies (CSDS) in 2016 showed that nearly two-third of respondents were in favour that people from the state should be given priority vis-à-vis employment opportunities.

■ Arguments against demand for local jobs :-

• May not pàss legal scrutiny :- It is violative of Article 14 (Right to equality) and Article 16 (Right to equality of opportunity). Moreover, Article 16 does not empower the state government but rather the Parliament to provide reservation in jobs on the basis of residence and that too is limited to the public sector.

• Dangerous for unity of the country :- Such moves could open a ‘Pandora’s box’ wherein other states also will start implementing such policies, which will result in fractures with regard to unity of India.

• Concerns of the industry :- Although most of the units employ locals only, however, there are certain sectors like chemical technology, textile and biotechnology, where it may be difficult to find locals for the jobs and the units need to search outside the state to hire competent personnel.

• Difficult to attract investments :- Such a decision may lead to relocation of industries elsewhere and also alienate the potential investors. Lack of investments could further drop job creation.

• Plan may not impact micro or smaller units as they can still engage locals. However, medium and large-scale companies and MNCs like Auto industry, which contributes more than 25% of the state GDP of Haryana will be adversely impacted.

Job reservation for locals may not enhance their economic opportunities in the long run and may create another barrier to ease of doing business. Raising the standard of education and skilling the youth alongside the necessary structural reforms is the way forward to increase the size of the economic pie in the absolute sense.

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