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Why such quotas fail

1995-2018

Why MP’s promise of 70% jobs to locals will fail, February 9, 2019: The Times of India

1995-2018: Why 'reservations'/ quotas for sons of the soil/ local job-seekers did not succeed.
From: Why MP’s promise of 70% jobs to locals will fail, February 9, 2019: The Times of India

Internal migration in search of jobs, state-wise, 2016-17
From: February 12, 2019: The Times of India

(With reports from Rajendra Sharma in Bhopal, Kapil Dave and Melvyn Thomas in Ahmedabad, Bhavika Jain in Mumbai, Sandeep Moudgal in Bengaluru, B Sivakumar in Chennai)

Kamal Nath’s plans ignore enforcement hassles faced elsewhere

The Kamal Nath-led Congress government in Madhya Pradesh announced 70% reservation for locals in industries shortly after taking office. Across the country, such quotas have been introduced from time to time, but they have mostly remained on paper, mainly due to the reluctance of industries to carry out the policy and also because of an absence of enforcement mechanisms on the part of state governments.

In the past, industries have been hesitant — and understandably so — to dilute their hiring standards to meet a state’s job quota criteria. Chief minister Kamal Nath will have to do a delicate balancing act to ensure that investors still find it lucrative to do business in MP while meeting the quota criteria. During the previous BJP rule of 15 years, similar hurdles had compelled the full-majority government to bend norms to the demands of industries -- the 50% job promise remaining on paper. Still, investment didn’t flow.

“I personally welcome the provision for quota. We tried to implement 50% quota during our government but did not enforce it as a part of our industrial policy to bring investments. There were some hurdles related to skilled and technical manpower,” former state finance minister Jayant Malaiya told TOI.

Most industrialists suggest that those seeking jobs must have passed at least Class XII, but the quality of job-seekers is a problem. “We are aware of the standard of education in MP. There is an urgent need to improve it,” said higher education minister Jeetu Patwari.

Maharashtra in 2008 introduced 80% reservation for locals in industries that seek state incentives and tax subsidies. For industries that do not take incentives, this is still an indicative law.

Officials from the industries department of the state did not share data for the number of jobs created and those held by locals, but said the reservation policy didn’t take off.

According to them, there is no mechanism to check whether the stipulated quota of locals has been recruited. “We only check the number of employees from the Employees’ Provident Fund (EPF) accounts that a company opens. There is no way to find out how many of them are locals or from other states,” said a senior official.

He added that sometimes companies have been forced to hire ‘outsiders’ because of the lack of skill sets among local applicants for a particular job. “For sectors like chemical technology, textile and bio-technology, local employees are hard to find,” he explained.

The Gujarat story is no different. It introduced 85% reservation for locals as far back as 1995. The policy was never enforced, either in the private or public sectors. A significant number of workers in the ceramic, construction, textile, diamond and services sector come from Bihar, UP, West Bengal, Odisha and elsewhere.

Labour and employment minister Dilip Thakor said, “The idea of bringing a legislation for reserving jobs for locals was dropped as it was legally challenging and not implemented anywhere in India.”

In Karnataka, the government on December 2016 had planned to provide Kannadigas 100% reservation in mainly bluecollar jobs in private sector industries, except infotech and biotech. Early in 2018, the law department vetoed the idea on legal grounds, referring to articles 14 (right to equality) and article 16 (right to equal opportunity).

Later in January 2018, then advocate general (AG) Madhusudan R Naik said the government could suggest to the private sector to give “preference” to Kannadigas but could not force it to fall in line. The matter has not been raised since.

Meanwhile, MC Sampath, industries minister of Tamil Nadu, another highly industrialised state, had on January 5 promised that the government would ensure at least 50% reservation of jobs for residents of the state.

“We did not make it mandatory but … we have a clause which mentions that priority must be given to locals during recruitment. There is no fixed percentage for the companies to follow,” said a senior industry department official.

Industry bodies do not think much of these announcements. “These are political statements and are impractical in terms of implementation. Companies investing in a state recruit people based on skills to ensure good profits. Companies do not go by caste or creed, nor do they see which state one is from,” said Assocham secretary general D S Rawat.

Tamil Nadu’s strength has always been its talent pool. But that’s for white collared jobs. When it comes to labour participation in industrial activity, capital has always flowed to places where workforce is available in plenty. While there is no command or order to recruit locals, some industries, like textile in Tirupur or the Sivakasi fireworks hub, have always opted for locals. But that’s mostly due to availability of cheap labour.

The position in 2020 Aug

Migrants power economy but local quotas curb job mobility, August 22, 2020: The Times of India

The ‘reservation’ of employment for local workers: The position in 2020 August
From: Migrants power economy but local quotas curb job mobility, August 22, 2020: The Times of India

As efforts are made to bring the millions of migrant workers back to factories that power our economy, the paradox of states putting up policy pickets and trying to ring-fence jobs for locals is simultaneously playing out.

Consequently, while industrialists hire cars and buses and book seats on trains, and even planes, to fetch their workers from faraway corners of the country, the employment field for migrants is shrinking. Since 2019, at least five states — Maharashtra, Andhra Pradesh, Karnataka, Haryana and MP — have announced or approved reservation for locals both in government jobs and private industrial units. There are also others like Goa and Himachal Pradesh that encourage employment of locals through incentives to industries.

For states reliant on migrants, reservations will be a challenge

Haryana’s reservation plan is the latest, with deputy CM Dushyant Chautala announcing on Friday that the government will introduce a bill in the assembly to give 75% reservation in private sector jobs to the state's youth. The promise was made by Chautala during the 2019 assembly election campaign and an ordinance to the effect was approved by the Haryana cabinet last month.

Earlier this week, Madhya Pradesh CM Shivraj Singh Chouhan announced that only "children of Madhya Pradesh" would henceforth be eligible for state government jobs. And while the pandemic’s impact on such policies — after the unprecedented upheaval it has caused in the job market — remains to be seen, there is the political factor. Madhya Pradesh is heading into byelections for 27 assembly seats and Chouhan’s announcement met with no opposition from his chief rival and predecessor Kamal Nath, who had, during his stint, said 70% reservation would be given to locals in private sector jobs. "At last, you have woken up to the issue of employment for youth after 15 years…" Nath reacted. In Maharashtra, one of India’s biggest migrant-receiving states, the Maha Vikas Aghadi government plans to introduce a law that will make it mandatory for the private sector to reserve 80% jobs for those domiciled in the state. "Domiciled", in this case, is defined as someone who has lived in the state for more than 15 years.

Last December, the Karnataka government amended the Karnataka Industrial Employment (Standing Orders) Rules, 1961 to make it mandatory for private industries to give "priority" to Kannadigas in clerical and shop-floor jobs. The rule said people residing in Karnataka for not less than 15 years who can read, write, talk and understand Kannada are eligible for these jobs. The government had announced it would follow up with a law defining the quantum of reservation but that is yet to happen.

One state that did pass legislation for quota of up to 75% in both government and private jobs last year was Andhra Pradesh. The law, though, is yet to be implemented. Governments have powered through with these moves despite the legal questions. Reacting to Chouhan’s announcement, Congress MP and Supreme Court advocate Abhishek Manu Singhvi told TOI, "Howsoever well-intentioned, a blanket ban permitting jobs to be held only by old and permanent residents of MP would be constitutionally (and I’m not talking politics here) invalid. The right to vocation, free movement and quasi-federal structure of the country allows some reservation and protective steps which are narrow, focused and targeted. A blanket ban would not be legally valid."

Asked about the legal soundness of reserving jobs for locals, PDT Achary, former Lok Sabha secretary general and an expert on the Constitution, said, "There is a provision under Article 16 of the Constitution which provides for reservation on the basis of place of residence. States can make laws to provide reservations under this provision. However, by definition, the objective of quota is to reserve a portion of the total jobs for people or groups that are inadequately represented. Reserving all jobs is a move violative of other provisions of the Constitution that grant freedom of movement, among others, and is, therefore, legally invalid. Moreover, such a decision does not square with the idea of nationalism that is being pushed at present." The legal question apart, implementing such laws is not easy because of factors like skill sets, availability of cheap labour and local job preferences. Gujarat, for instance, has had a policy since 1995 that says industries, both private and public, which have received government benefits must provide 85% employment to locals. But the policy has remained on paper and even PSUs do not follow it. CM Vijay Rupani has on several occasions attempted to enact a law but has faced stiff opposition from industrialists. Gujarat, as one of India’s largest manufacturing hubs, is also one of the country’s biggest migrant-receiving states and employs 50 lakh migrant workers.

For states heavily reliant on migrant workers, reservations will be a much bigger challenge than those who don’t. In Haryana, which has a huge requirement of technically skilled workers as one of India’s largest automobile manufacturing hubs, industrialists have, just like those in Gujarat, opposed job quota, saying it sent out the wrong message at a time when they were desperate to bring workers they have lost back to factories.

At the other end of the spectrum is Tamil Nadu, another huge automobile hub, which has not felt the need for quota because of the abundant availability of technical manpower. "In fact, technical workers from Tamil Nadu are engaged by companies like Sri City SEZ in AP close to the Tamil Nadu border as well as those in Bengaluru. Hence, it is superfluous to have reservation for locals in Tamil Nadu," a senior official with the industries department told TOI. "Even without reservations, majority of industries employ up to 90% locals. Migrant workers are used predominantly in sectors like construction and textiles, which locals are not keen on," the official added.

Most states, including Tamil Nadu, run courses to enhance skill sets of locals.

The state-wise position

Andhra Pradesh

Sajjan Singh Thakur, With inputs from Ajay Sura, November 6, 2020: The Times of India

Haryana private job reservation: All you want to know

CHANDIGARH/NEW DELHI: The Haryana assembly passed a bill providing for 75% reservation of factory and other blue-collar jobs for local candidates.

We will explain different aspects of the law here, starting from its salient points:

1. The bill is said to be a replica of the Andhra Pradesh bill.

2. The Haryana State Employment of Local Candidates Bill 2020 is applicable only to new private-sector job openings.

3. Perhaps the most important part: All jobs with a monthly starting salary of below Rs 50,000 come under the ambit of the proposed law.

4. The bill seals the BJP-led government’s argument that an influx of migrants competing for limited employment opportunities strains infrastructure and leads to proliferation of slums.

5. The bill won’t affect outsiders already employed in factories and other industrial units in the state.

6. Privately managed companies, societies, trusts, limited-liability partnership firms and joint ventures based within the state and employing 10 or more people can hire only up to 10% of the approved local quota from one district.

7. Employers may claim exemption whenever an adequate number of local candidates with the desired skills, qualifications or proficiency are not available.

8. The penalty for contravention of these provisions ranges from Rs 10,000 to Rs 50,000.

Why was the law implemented?

The state having been swamped by people from outside looking for employment led to the tabling the Bill, deputy CM Dushyant Chautala said.

Chautala, also the labour and employment minister, said: This (outsiders' population) has led to environmental and health issues, affecting both the quality of life and livelihood. Giving preference to local candidates in low-paying jobs is socially, economically and environmentally desirable.”

In its manifesto for the 2019 assembly elections, Dushyant’s Jannayak Janata Party (JJP) had promised 75% job reservation for local youth, who constitute a sizeable chunk of the nearly 1.8 crore voters.

The promise was later included in the common minimum programme of the BJP-JJP coalition government.

Dushyant had faced criticism from the opposition for his failure to table the Bill even after completion of a year of the government.

When will the bill become a law?

If and when the Bill gets the governor’s assent, it will be notified as a law.

Which states are the precursors of the law?

Andhra Pradesh already has such a law, while BJP-governed Karnataka’s new industrial policy envisages a 70% reservation of factories and other such jobs for Kannadigas.

What was Andhra Pradesh private job quota?

In July 2019, Andhra Pradesh became the first state in the country to reserve jobs for locals in all private industrial units and factories, irrespective of whether or not these companies get financial or other help from the government.

The Andhra assembly passed the Andhra Pradesh Employment of Local Candidates in Industries/Factories Act, 2019, which reserves 75% private jobs across all categories in industrial units, factories, joint ventures as well as projects that are in public-private partnership mode.

What are the good and bad of the law?

The act is "both good and bad", Vijay Naidu Galla, president and CEO of Tirupati-based Amara Raja industrial group and chairman of CII-AP, had told TOI's Gopi Dara after the police announcement.

Galla added: Good because it gives an indication of the government's policy to promote local hiring in the state. But the government has to ramp up its skill development centres in the state to train locals to be ready to be hired in manufacturing and IT companies.

What was Karnataka's new industrial policy?

The Karnataka government's new industrial policy (2020-2025), approved in July 2020, proposes to ensure jobs for locals with a minimum employment of 70 per cent to Kannadigas on an overall basis and 100 per cent in the case of Group D employees.

It had an ambitious plan to attract Rs 5 lakh crore investments over the next five years and maintain 10% year-on-year growth. It also aims to generate employment opportunities for 20 lakh people.

What are other states doing?

TOI reported on July 24, 2019 that although many states have been making noises about reserving a big chunk of private jobs for locals, they have not implemented it as yet. The demand has existed in Karnataka, Gujarat and Maharashtra as well.

Immediately after coming to power in December 2018, chief minister Kamal Nath had announced an industrial policy that made it mandatory to give 70% of jobs to locals in companies availing financial and other facilities from the government.

Do the policy announcements work?

The quotas have mostly remained on paper, mainly due to the reluctance of the industries to carry out the policy and also because of an absence of enforcement mechanisms on the part of the state governments, according to a TOI report, dated August 19.

Maharashtra in 2008 introduced 80% reservation for locals in industries that seek state incentives and tax subsidies.

In Gujarat that introduced 85% reservation for locals in 1995, the policy was never enforced.

The TOI report quoted industry bodies as saying such policies are "impractical" in terms of implementation, adding, Tamil Nadu, whose strength is "talent pool", had on January 5 promised that the government would ensure at least 50 percent reservation of jobs for residents of the state.

What is a blue-collar job?

A blue-collar job - involving a working class person who performs manual labour - may involve skilled or unskilled labour. The type of work may involve manufacturing, warehousing, mining, excavation, electricity generation and power plant operations, custodial work, farming, commercial fishing, logging, landscaping, pest control, food processing, oil field work, waste collection and disposal, recycling, construction, maintenance, shipping, driving, trucking and many other types of physical work. Blue-collar work often involves something being physically built or maintained.

How the term originated?

The term blue collar was first used in reference to trades jobs in 1924, in an Iowa newspaper. The image of manual workers wearing blue denim or chambray shirts as part of their uniforms gave rise to such a term.

What is white-collar job?

The white-collar job involves an office environment and may involve sitting at a computer or desk.

What is a pink collar job?

Service workers whose labour is related to customer interaction, entertainment, sales or other service-oriented work fall under this category.

What do the Supreme Court and Constitution say on the issue?

The Supreme Court - while ruling against reservation based on place of birth or residence 1984 - said such policies would be "unconstitutional" but there was no express rule. As for the Constitution, Article 16 of the Constitution - guaranteeing equal treatment under law in matters of public employment - prohibits the state from discriminating on grounds of place of birth or residence. However, Article 16(3) of the Constitution provides an exception - as per a report published in a national daily.

Haryana

2020