Reservation for locals in private jobs - SC stays HC order on Haryana
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S.C. stays High court order staying 75% local quota
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- The story: The Supreme Court of India, on Feb 17, 2022, set aside a Punjab and Haryana High Court order staying a controversial State law which provided 75% reservation for local youth in private sector jobs paying less than ₹30,000 a month. The High Court was given some time to ook at the case again, as the existing order did not give sufficient technical reasons for scrapping the said law.
- Key points: Various industry associations have said the law affects the idea of India as an economic unit. A Bench of Justices L. Nageswara Rao and P.S. Narasimha set aside the February 3 stay order of the High Court on the ground that it did not give “sufficient reasons”. The Bench observed that every law passed by the legislature was presumed to be legal. An order of stay on its implementation by a court of law should be well-reasoned. The High Court had not given sufficient reasons for stopping the Haryana law in its tracks on February 3.
- History: The Madhya Pradesh government made it mandatory to give 70 percent of jobs to locals, but the law was not meant for all private companies. Then, Andhra Pradesh became the first state to introduce such a provision in the private sector after the Jagan Mohan Reddy government passed a bill in the assembly to impose a 75 percent quota for local Andhra Pradesh youth in the private sector. The Andhra Pradesh Employment of Local Candidates in Industries /Factories Act, 2019, was approved by the assembly on July 22, 2019. 3. In Maharashtra also there is a law that if any industry gets an incentive from the state government, then 70 percent of people at a particular level have to be locals. The Karnataka government’s new industrial policy (2020) also aimed to provide minimum employment of 70 percent to Kannada people on an overall basis. Further reservation went up to 100 percent.
- Present scenario: The Punjab government is also bringing up the same law to provide almost 100 percent reservation to locals in government and private jobs. The government is expected to roll out 1 lakh jobs in the next 45 days. The government also wants to create a conducive environment for the youth to do business in Punjab.
- Local reservations: The concept of a "local reservation" was born out of concerns about job shortages and the necessity for governments to satisfy their domestic electorates. The bill/ policy states that the jobs created in a state will be offered first to those who belong to that State. It seems that government made this policy keeping in mind the fear of some locals who think that their jobs will be given to other people not belonging to the State. The policy provides an argument that it is the State’s responsibility to fulfil the aspirations of its people. Perhaps the states need such policies to achieve substantial equality, that is, to achieve the constitutional mandate of equality for all citizens. It is a legitimate right to ask the private sector to share the burden by complying with the reservation policy since private industries use public infrastructure in many ways. Although companies are not required to establish quotas in other countries, such as the United States, courts can mandate monetary damages and injunctive remedies for discriminating victims. In Canada, the Employment Equity Act safeguards minorities, particularly aboriginal peoples, from discrimination in federally regulated industries and the private sector.
- Criticism: There are many -
- This policy could impact “unity in diversity” as this could lead to a local versus non-local, threatening the country’s integration.
- Post pandemic scenario has made it imperative for states to focus on practical ways to recover the economy. With such policy, i.e., compulsion on companies to hire locals might compromise quality and delay the recovery phase.
- The policy discourages people from investing in capital in a state, reducing the State’s appeal as an investment destination and, in the long term, damaging its economic interests.
- The policy affects business freedom, and for business to flourish, it must function with a set of clear policies and well-defined parameters.
- Exemptions officials will decide if a firm can hire an outsider or train local candidates instead.
- Indian economy has a comparative advantage over the other countries in labour, as India is a labour-intensive country. Labour from rural areas migrate to urban areas for work and work at lower wages. Providing jobs only to locals might lead to economic loss due to high wages.
- This policy is against the spirit of competition as the local person with fewer skills may get the job over the non-local who is fully skilled
- Violation of Constitutional Provisions: It violates Article 14, 16, 19(1) in or the other way.
- Summary: Government should mainly focus on the betterment of education, more significant job creation, and skill enhancement as it will automatically make companies employ more local youth, instead of focusing on bringing such policies which are a just temporary solution. Making a state’s youth employable by effective investments in education, health, and skill development would better connect with the private sector.
- EXAM QUESTIONS: (1) What is "local reservation"? Why do governments provide these controversial solutions? Analyse critically. (2) Critically examine the "Local First" policy practised by some state governments. How it is harmful for India as a nation? Explain.
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