As the economy rebounds from the shock of the extended lockdown of 2020, job creation has taken center-stage. The Centre for Monitoring Indian Economy (CMIE) pegged India’s unemployment rate at 6.9% in February.

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But it is not only the central government that is working on policies aimed at increasing employment. Many state governments have had to deal with the added pressure on resources that was created when labourers returned from other states.

As the dust settles, quite a few of them have tried to tinker with labour laws to both, attract more investment by industry to create jobs and ensure these opportunities go to skilled people in their jurisdictions. States like Maharashtra, Andhra Pradesh and Madhya Pradesh have already announced plans to look at reserving a portion of government and even a few private sector jobs for their people. Haryana is the latest to take this route.

The Reservation Bill, which got the governor's approval on the March 2 2021, mandates that 75% of the jobs in the private sector be reserved for the people of the state. The bill also imposes penalties on companies that fail to abide by these provisions. Private companies operating in the state are also required to furnish quarterly employment report on the designated portal.

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Haryana approves bill reserving 75% jobs in private sector for locals: What we know so far

Here’s how various industry experts reacted to the Reservation bill.

Sunjay Kapur, Chairman of Haryana State Council at CII

Everything that is restrictive does come with a lot of issues in terms of future investments. This could curb future investments, this could hinder competition in terms of us being competitive because we may not be allowed to employ the best but be restricted to employing certain kinds of people. So, whilst we have made representations to government, not just from CII alone, but from NASSCOM and CII together as well, we have asked the government to look at other ways of creating or increasing employability – through training or through hiring youth that are already available and qualify. So, we are hoping that we can make more representations to reverse this decision.

Deepak Jain, President of ACMA

The auto ancillary plus the original equipment manufacturers (OEMs) have had a huge impact on the Haryana economy. It is more than 25% of the Haryana GDP. We directly and indirectly employ more than 1 million people in Haryana. There are almost close to 600 plus auto ancillaries operating in Haryana and most of them being MSMEs. This law is kind of draconian because the whole auto supply chain is a globally intricate supply chain which is fundamentally looking at competitiveness and quality so that we can actually make in India and export from here. If you make into reservation, it becomes extremely restrictive because for the industry we need to find the best of talent, skill them, and make sure they become productive. The less than Rs 50,000 are all entry level and probably even at about few years’ experience in the auto belt. I think it would definitely hurt the sentiment of further investments coming into Haryana.

Also Read: Haryana’s 75% job reservation for locals policy will backfire: Teamlease

Ashish Aggarwal, Senior Director and Head of Policy Advocacy at NASSCOM

The industry is in a state of shock. The fact that this bill has actually come about, we are still reconciling with this. Gurugram is the BPO capital, it is kind of an IT hub, and from that perspective the bill sets a very bad precedent. The state government has not really had any kind of structured consultation with the industry. I think the whole idea of encouraging employment is a great idea, but what this is going to do is, it is not just going to harm the industry, but it is not going to be in the interest of the state itself. There is so much competition between states and you need to bat on your strength. The entire NCR connectivity, the airport and all of that has contributed to the fact Gurugram has emerged because Delhi has its own constraint. Now, by putting this, what you are doing is that you are effectively blocking out Delhi and nearby areas from working in Gurugram which from an attractiveness point of view will not be attractive for Haryana.

Manish Sabharwal, Chairman and Co-Founder of TeamLease Services

I think this is nothing short of economic insanity. I think there are many other states close to Haryana, Bhiwadi is just a little ahead and if you create Haryana factory refugees I think there will be many states and many cities willing to take them in. so, I would urge the state government to reconsider. You have to move back to recognizing that modern corporations work on meritocracy, modern corporations want India to be one single labour market and capital market, and modern corporations are the ones which will create the jobs. That will help Haryana move beyond what it was even as recently as 10-15 years ago. So, you can’t blunt this local reservation without sacrificing meritocracy. You can improve employability and employment for the local population and companies in Gurugram will be more than happy to take local people.

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(Edited by : Aditi Gautam)