Sons of soil back in focus with Haryana law on jobs quota

Move to hurt industry & workers alike

Business

November 11, 2020

/ By / New Delhi

Sons of soil back in focus with Haryana law on jobs quota

Haryana's chief minister Manohar Lal Khattar during discussion on job reservation bill in the Assembly

Haryana Assembly recently passed a law reserving 75 pc of private sector jobs for residents of the state. The populist move is likely to hit the state economy by driving away industry and hurting workers.

Amidst much controversy and opposition, the Haryana Assembly passed a highly controversial law mandating all private sector companies in the state to reserve 75 pc of all their jobs, paid up to INR 50,000 a month, to residents of the state. The bill was proposed by the state deputy chief minister Dushyant Chautala, whose JJP is the junior coalition partner in the state government and whose party had included the issue in its electoral manifesto.

The bill was staunchly opposed during the brief discussion in the Assembly and industry bodies were quick to criticise it and said that the move may force industry and investments to migrate from the state.

With the exception of the north-eastern states and some parts of the Himalayan states, Haryana may have become one of the first states in the country to adopt such a bill. However, there have been attempts in many parts of the country to ensure reservation of employment for the locals over people from other states, let alone foreign nationals.

In late 1960s in Maharashtra, Bal Thackeray the founder of Shiv Sena, then a fledgling far-right political party, had launched a ‘sons of soil’ campaign, seeking reservations in all government and private sector jobs in Bombay for the Maharashtrians.

The campaign, targeting the south Indian community in the city, did not last too long but made national headlines thanks to some violence and numerous publicity stunts that the media-savvy Thackeray orchestrated with the help of his party workers.

Though the demand for reservations of jobs in the state for Marathis died a natural death over time, the political gains that an issue like this could bring to any aspiring politician was clearly seen and since then a number of other parties and politicians in many states have tried to milch this formula for their short-term gains.

Damaging economy

At a time and in a country where lack of availability of skilled workforce is one of the biggest challenges for any company, reserving jobs simply due to the location of the industry or business would be self-defeating for the economy.

India faces a severe shortage of skilled workforce as only 4.7 pc of its total workforce of over 220 million is skilled, while the rest are either unskilled or possess skills that are not relevant to their profession. As a result, most companies are obliged to train all the new joinees, with most trainings lasting up to six months and costing billions of dollars each year in loss of productive manpower.

Moreover, in the absence of a reliable system for supply of good quality skilled workforce, most big companies have set up inhouse or captive skilling programmes where they train people for their own needs.

By forcing the companies to hire from a particular area, the governments put unreasonable restrictions on businesses and more often than not it means a loss of time and money as companies struggle to find the required manpower with the degree of skills that they need.

If the law is implemented strictly, once it enters into force, it could give a very strong incentive to companies planning on investments in the state to reconsider their move and even make the existing firms look at options outside the state.

Industry criticises move as anti-business

The move is yet another nail in the coffin of the much-quoted ‘ease of doing business’ in India, which the current government keeps on repeating as one of the biggest achievements since Narendra Modi took charge as Prime Minister six years ago. By putting limitations on the already limited pool of skilled manpower, governments are definitely adding to the difficulties in doing business which have increased over the past few years with patchy implementation of Goods & Services Tax, the return of tax raids and arbitrary misuse of powers by tax authorities as well as numerous restrictions imposed by the government in view of the Covid-19 pandemic has impacted business confidence amongst the companies.

Auto component manufacturers’ association, ACMA, has asked Haryana government to review the law, saying the move will adversely impact the ease of doing business in the state. ACMA president Deepak Jain said the Indian auto and component industry was a global one and the production not only catered to the domestic demand but also the international markets.

“Our industry requires a skilled workforce to produce high-quality products that are globally competitive. Hiring in our sector is done on the basis of talent and skills needed by the industry rather than on the domicile of the candidates. Such a move would not only adversely impact the ease of doing business in the state but also be detrimental to Haryana’s image of an industry-friendly state and in attracting future investments,” Jain said. As Haryana has one of the largest clusters of automotive manufacturing in the country, autocomponents industry is also very largely concentrated in the state.

Critics also say that by reserving jobs for its own people, Haryana government is also taking the risk of exposing its own people to similar discrimination when they go looking for jobs in other states. Moreover, such moves are likely to foment competitive parochialism even more across the nation and add another fissure in an already heavily divided society.

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