FPJ Edit: Jobs only for sons-of-soil a self-defeating exercise

FPJ EditorialUpdated: Saturday, January 22, 2022, 08:10 AM IST
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‘When in doubt, legislate’ is the motto of lawmakers everywhere when confronted with challenges where passing some sort of law offers an easier solution compared to actually addressing the root causes, which are the actual reason for the problem to exist in the first place. Indian lawmakers are particularly fond of this approach, since it offers them the chance to appear to be doing something, that too, with the added bonus of easy marketability, come election time. India has attempted a legislative solution to many of the serious problems which face it. For instance, the Right to Education Act simply forced the private education sector to fill in the gaps in access left by the government’s sustained under-investment in education, as well as the poor quality offered by the state education system, particularly at the school level. Likewise, while hunger, malnutrition and chronic under-nutrition are widely prevalent in India, we have a Right to Food Act which, on paper, has abolished hunger. The challenges of landless labour, excessive numbers of people depending on the agriculture sector for livelihoods, the lack of climate resiliency and over-dependence on monsoons, as well as the inability of farming to yield a viable income, particularly for small and marginal farmers, are all problems which plague rural India, which have been offered a palliative by way of the chronically underfunded National Rural Employment Guarantee Act.

Despite near unanimous objections by all major industry bodies and associations, the BJP government in Haryana has decided to join this long list by going ahead with its controversial new law that mandates three quarters of all jobs in the state, above a certain threshold, to be reserved for local candidates. The Haryana State Employment of Local Candidates Act, 2020 (‘HSELC Act’), which was passed early last year, was formally notified last week, which means that from January 15, 2022 onwards, three out of four new hires will have to be made from within the talent pool already available in the state. While job quotas for locals are not uncommon in other states as well, the Haryana law is also applicable to private sector employers. The concerns expressed by employers have been nominally addressed by giving a twoyear exemption to new start-ups and information technology/information technology-enabled services (IT/ITeS) companies which commence operations before January 15, 2024. This will not, however, help the huge number of global and national IT/ITeS companies already operating in the state. Haryana, in fact, is the third largest exporter of IT services in the country and IT exports contributed 10 per cent of the state’s GDP and 54 per cent of the state’s exports, as well as employing nearly 18 per cent of the country’s workforce in the IT/ITeS sector. In another sop, the salary ceiling for mandatorily employing 75 per cent locals has been reduced to jobs paying Rs 30,000 per month or less, from the earlier proposed threshold of Rs 50,000 per month. This again, will likely hurt another huge employer in the state – the automobile sector. The state produces two-thirds of all passenger cars, half of all the tractors and a whopping 60 per cent of all motorcycles manufactured in the country. The sector is also the biggest employer after agriculture in the state. A significant proportion of assembly line workers in the state will fall below the salary ceiling limit.

There is also the question of whether the state can provide the kind of skilled workforce required by the highly globally competitive industries that operate within the state. Haryana, despite its economic prosperity, is somewhat of a laggard in human development indicators. Nearly a quarter of the population is illiterate and it has one of the most adverse sex ratios in the country, with just 879 females per 1,000 males. In fact, an earlier bid to push through the law via the ordinance route was stymied by the state’s governor, on the grounds that that the proposal would be violative of Article 14 (equality before law) and Article (1)(g), which provides for the freedom to practise any profession or trade to all citizens. Given these facts, it might puzzle the lay observers as to why the state government is persisting with the legislative route. However, the siren call of easy populism is difficult to resist. Such ‘nativist’ laws are fundamentally violative of the federal structure of the country as enshrined in the Constitution. It will also act as a disincentive to investment and drive away those already present. In fact, a survey by apex IT/ ITeS industry body NASSCOM found that 80 per cent of the IT/nITeS industries in Haryana said they would move out of the state if the jobsfor-locals quotas are enforced. The only viable and longterm solution to the employment challenge is to invest in education and skilling to ensure employability, and to put in place policies conducive to investments and growth. Using the accident of place of birth or residence as the sole qualifying criterion is illogical and self-defeating.

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