“When in doubt, legislate” is the motto of lawmakers around the world when faced with challenges where passing some sort of law offers a simpler solution than actually addressing the root causes, which are the real reason for the existence of the problem in the first place. Indian lawmakers are particularly fond of this approach, as it offers them the chance to look like they are doing something, that too, with the added benefit of easy marketing, come election time. India has attempted to find a legislative solution to many of the serious problems it faces. For example, the Right to Education Act simply forced the private education sector to fill the access gaps left by the government’s sustained underinvestment in education, as well as the poor quality offered by the public education system, particularly at the school level. . Likewise, while hunger, malnutrition and chronic undernutrition are widespread in India, we have a Right to Food Act which, on paper, has abolished hunger. The challenges of landless labour, excessive number of people dependent on the agricultural sector for their livelihoods, lack of climate resilience and overreliance on monsoons, as well as the inability of agriculture to generate a viable income, especially for small and marginal farmers, are all problems plaguing rural India, which have been offered a palliative through the chronically under-served National Rural Employment Guarantee Act. funded.
Despite near unanimous objections from all major industry bodies and associations, the BJP government of Haryana has decided to join this long list by pushing ahead with its controversial new law which compels three quarters of all State jobs, above a certain threshold, to be reserved for local applicants. The Haryana State Employment of Local Candidates Act 2020 (“HSELC Act”), which was passed early last year, was officially notified last week, meaning that starting January 15, 2022, three out of four new hires will have to be made from the pool of talent already available in the state. Although job quotas for locals are not uncommon in other states as well, Haryana law also applies to private sector employers. Concerns expressed by employers have been theoretically addressed by granting a two-year exemption to new start-ups and information technology companies/information technology enabled services (IT/ITeS) starting operations before January 15, 2024. This, however, will not help the large 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 have contributed 10% of the state’s GDP and 54% of the state’s exports, while employing nearly 18 % of the country’s workforce in the IT/ITS sector. In a separate sop, the salary cap for compulsory employment of 75% locals was reduced to jobs paying Rs 30,000 per month or less, from the previously proposed threshold of Rs 50,000 per month. Again, this will likely hurt another huge state employer – the auto industry. The state produces two-thirds of all passenger cars, half of all tractors and 60% of all motorcycles manufactured in the country. The sector is also the largest employer after agriculture in the state. A significant proportion of assembly line workers in the state will fall below the salary cap.
There is also the question of whether the state can provide the type of skilled labor required by the highly competitive, globally competitive industries that operate in the state. Haryana, despite its economic prosperity, lags somewhat behind in human development indicators. Nearly a quarter of the population is illiterate and it has one of the worst sex ratios in the country, with just 879 females per 1,000 males. In fact, an earlier attempt to pass the law by ordinance was thwarted by the state governor, on the grounds that the proposal would violate Section 14 (equality before the law) and Section (1) (g), which provides freedom to exercise any profession or trade to all citizens. Given these facts, lay observers might wonder why the state government persists on the legislative path. However, it is difficult to resist the siren call of easy populism. Such “nativist” laws are fundamentally contrary to the federal structure of the country as enshrined in the Constitution. It will also act as a deterrent to investment and drive away those who are already there. In fact, a survey by apex IT/ITSeS body NASSCOM revealed that 80% of IT/nITeS industries in Haryana said they would leave the state if job quotas for locals were enforced. The only viable and long-term solution to the employment challenge is to invest in education and skills to ensure employability, and to put in place policies conducive to investment and growth. To use the accident of the place of birth or residence as the sole qualification criterion is illogical and defeats the purpose.
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Published on: Saturday, January 22, 2022, 08:10 IST