Editorial: Welcome intervention

The Punjab and Haryana High Court’s order staying the Haryana government’s law on quota for locals in private sector jobs is a welcome development. It’s an apt judicial intervention to correct a flawed policy. According to the Haryana State Employment of Local Candidates Act, 2020, private companies are required to reserve 75% of the jobs, […]

The Punjab and Haryana High Court’s order staying the Haryana government’s law on quota for locals in private sector jobs is a welcome development. It’s an apt judicial intervention to correct a flawed policy. According to the Haryana State Employment of Local Candidates Act, 2020, private companies are required to reserve 75% of the jobs, virtually covering all categories, to local. Industry bodies were justifiably worried over the impact of the quota policy on the business environment and the future of the State. The Constitution allows every citizen to live and work anywhere freely within the country. Any attempt by the States to impose restrictions on this right would not only be ultra vires and unconstitutional but also be regressive. The idea of enforcing reservations for locals in the private sector would undermine the basic spirit of equality and development. Moreover, such a policy would scare away the potential investors, thereby hampering the industrial development of the States. It would be naïve and reckless to think that the quota system for locals would somehow magically solve the unemployment problem. Instead of enforcing job quotas, it would be prudent for the States to offer additional incentives to those private companies which employed local youth relevant to their skill sets. The pro-active policies being implemented by Telangana in this regard must serve as a role model. A few States which experimented with the ‘quota for locals’ policy have been facing pushback from the industry. As a result, there is a flight of capital from these States.

Job reservations in the private sector would prove counter-productive in the long run as industries would find it extremely difficult to find suitable talent for various roles. It must be pointed out that ‘jobs for locals’ laws go against the provisions in the Constitution which promise equality of law irrespective of place of birth (Article 14), against discrimination in employment (Article 16), and free movement to all citizens across the country (Article 19). In fact, Article 16 prohibits the State from discriminating on grounds of place of birth or residence. Such quota policies would make the businesses unviable, thereby reducing the total number of jobs available. It will encourage informalisation of labour, as employers would look for ways to balance the need to remain competitive and follow the local laws. It will eventually lead to a throwback to the licence-permit-quota raj. Restrictions on labour mobility would deprive the labour pool of its diversity, which is a big strength of the Indian economy. At a more macro level, such rabid nativism weakens the bonds that unite India. The solution to the problem of unemployment lies in improving the quality of education, upgrading the skills of workers, and creating a favourable ecosystem to attract industries.