Reservation laws for locals: Local labour pains

News: Haryana’s law of reserving 75% of new jobs in the private sector is now before the Supreme Court. The appeal was made by Haryana state after Punjab and Haryana High Court put a stay on the implementation of the law.

Must Read: Reservation for locals in private jobs
Why the observation of the Supreme Court is important?

The local job reservation law is in contradiction with Article 16 of the Constitution. Apart from Haryana, other state governments like Andhra Pradesh, Jharkhand, and Madhya Pradesh have also passed laws mandating between 70 and 75 % quota.

Read here: Jharkhand clears Bill for 75% quota for locals in private jobs

So, the judgment is important as it raised an important question of whether the state can restrict employment, even in the private sector, based on domicile.

Read here: Concerns associated with Local Reservation Laws
Why did the Telangana government revoke its job reservation law?

Telangana cabinet earlier approved a proposal to reserve 80% of semi-skilled jobs and 60% of skilled jobs in the private sector for locals in August 2020. The policy generates difficulties in attracting investment, especially in the IT sector. Also, the companies are reluctant to invest in the states where employment options are restricted to locals.

Read here: challenges associated with the policy of job quota for locals in the private sector.
What should be the way forward?

The state should follow a two-pronged strategy of educating local youths in marketable skills so that they get jobs without quotas. Along with that, the government can offer an incentive to industries to employ locals.

Source: This post is based on the article “Local labour pains” published in the Business Standard on 7th February 2022.

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