Chandigarh: Haryana Government’s decision to reserve 75 per cent of jobs in the private sector for local candidates has not gone down well with industrialists as they criticised the Haryana State Employment of Local Candidates Act, 2020 saying it will force industries to relocate to other states of the country.
The new reservation policy would be a body blow to industries in the state that are already burdened by the disruptions caused by GST implementation and Covid-19 pandemic, they observed.
As per a gazette notification released on Tuesday, the Governor gave his consent to the Haryana State Employment of Local Candidates Act on 26 February and it applies to all the Companies, Societies, Trusts, Limited Liability Partnership firms, Partnership Firm and any person employing ten or more persons and an entity.
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The key provision of the Act mandates all the firms operating within the state to allocate 75 per cent of the jobs that offer Rs 50,000 per month in salary to ‘domiciles’ who are born in Haryana or have lived in the state for at least 15 years.
Unemployment problem
For some years, Haryana has been facing an acute unemployment problem. As per the Centre for Monitoring Indian Economy (CMIE), the state has the highest unemployment rate in the country.
While the average countrywide unemployment rate is pegged at 6.8 per cent, Haryana’s unemployment rate is 26.4 per cent.
In fact, it has become a poll issue during the 2019 Assembly elections when the Jannayak Janta Party (JJP) promised 75 per cent reservation in all jobs to local residents if the party comes to power.
“It’s an historic step for the youth of Haryana as the new provision is applicable to all the industries -– small and medium scale to multinational companies. It will benefit skilled and educated youth in Haryana. We will frame the rules at the earliest and launch an employment drive in April,” Dushyant Chautala, President of JJP and Deputy Chief Minister of Haryana, told ETV Bharat on Wednesday.
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As per the provisions of the Act, local candidates shall be eligible to avail the benefits only after registration on the designated portal.
Interestingly, the legislation, in a first of its kind, empowers employers to enforce district wise reservations.
“The local candidates may be from any district of the State, but the employer may, at his option, restrict the employment of local candidates from any district to ten percent of the total number of local candidates,” says the Act.
Lack of skilled workforce
Being manufacturing hubs of electronics, automobiles, IT and financial services, major cities like Gurugram and Faridabad may face labour shortages as adequate skilled workforce is not available in the state.
“At a time when the industry is finding it difficult to source labour from outside of Haryana due to Covid-19 pandemic, the latest move proves to be a death blow,” said CB Goel, Former President of Haryana Chamber of Commerce and Industry.
Multiple industrialists who spoke to ETV Bharat also pointed out that the industries were not consulted while framing the legislation.
“It is very difficult to find 75 per cent locals in every industry. For instance, around 70-80 per cent of nurses working in major hospitals here are from the South. If the rules are implemented, those hospitals have to be shut within a day,” lamented a Gurugram-based industrialist.
Caught between the reservation formula and non-availability of skilled labour, industries have no other option than relocating to other states, said another industrialist.
Echoing similar views, Chandrajit Banerjee, Director General, CII, said: “The Haryana government could have avoided imposing restrictions on the industry. Reservation affects productivity and industry competitiveness. We hope the state government of Haryana relooks at the legislation."
Exemptions
On being asked how the government will address the issues raised by industrialists related to lack of qualified professionals in the state, Dushyant Chautala said that the Act has provisions under which companies can approach labour commissioner to avail exemptions.
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“The employer may claim exemption where an adequate number of local candidates of the desired skill, qualification or proficiency are not available by applying to the Designated Officer,” says the Act.
However, pointing out the loopholes in the system, industrialists said that this will lead to higher compliance burden for the firms.
“Under the new rules, companies have to furnish details related to new employees to officials at regular intervals. Already industry is burdened by GST and it has not recovered yet from the pandemic. The new compliance burden will push the industry back to inspector raj,” said ID Batra, General Secretary, Sector-37 Gurugram Industrial Area.
