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Haryana’s decision to reserve jobs for locals in private sector is a retrograde step

Haryana has notified the State Employment of Local Candidates Act 2020, which reserves jobs for locals. It is a retrograde development which can catalyse the balkanisation of India’s labour market. The law applies to all organisations which employ ten or more people. It’s obligatory for employers to adjust recruitment in a way that 75% of jobs that pay a gross monthly salary of up to Rs 50,000 are reserved for locals.

To put it in context, Haryana has reserved 75% of jobs that pay up to almost five times India’s monthly per capita income. This move will have a number of adverse effects. Among the more important ones is that it will defeat the underlying purpose of the legislation. It will drive jobs out of the state as it makes it unviable for businesses to follow the law in letter and spirit, reducing the total number of jobs available. The other consequence is that it will encourage informalisation of labour, as employers look for ways to both compete in the market and follow the law.

The law does carve out exceptions by allowing employers to seek permission for waivers if there are not enough qualified locals available. However, that opens the door to a licence-permit-quota raj and corruption is almost inevitable in its train. Haryana is not an exception. Andhra Pradesh assembly in 2019 passed a similar law. Nativism weakens the bonds that unite India and violates the fundamental right of Indians to seek a livelihood anywhere in the country. Haryana has resorted to this step despite having a BJP chief minister, Manohar Lal Khattar. BJP, a party that claims to be nationalist, shouldn’t pander to nativism. Prime Minister Narendra Modi should persuade his colleague to see reason in national interest.

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This piece appeared as an editorial opinion in the print edition of The Times of India.



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