Anupam Varma, partner at law firm J Sagar Associates, said the vesting of authority in a state government to decide the qualification, skill, etc, of employees of a private employer will be inimical to the ease of doing business initiatives of the central government.(File photo for representation)
Anupam Varma, partner at law firm J Sagar Associates, said the vesting of authority in a state government to decide the qualification, skill, etc, of employees of a private employer will be inimical to the ease of doing business initiatives of the central government.(File photo for representation)

‘Haryana’s quota for jobs will spell disaster for state’, says Ficci

  • Ficci president Uday Shankar said the government’s move to reserve 75% jobs for the local population in private sector will spell disaster for industrial development and private investment in the state.
Agencies | By HT Correspondent
PUBLISHED ON MAR 05, 2021 04:39 AM IST

Industry body Ficci on Thursday said the Haryana government’s new legislation that provides reservation in private jobs for local candidates will “spell disaster” for industrial development in the state.

Ficci president Uday Shankar said the government’s move to reserve 75% jobs for the local population in private sector will spell disaster for industrial development and private investment in the state.

“Investors and entrepreneurs need to source the best human resources available in the country to be competitive and successful. To force them in such a regressive straight-jacket will force them to look beyond Haryana and this will ultimately hurt the interests of the state,” Shankar said. Further, the industry body said it believes that this move is against the spirit of the Constitution that gives the citizens of India the freedom to work anywhere in the country.

Anupam Varma, partner at law firm J Sagar Associates, said the vesting of authority in a state government to decide the qualification, skill, etc, of employees of a private employer will be inimical to the ease of doing business initiatives of the central government. “The power of entry and inspection given to the authorised officers would open a Pandora’s box of grievances and harassment of employers,” Varma said.

According to him, the legality of the Act is prima facie suspect and may not be able to withstand judicial scrutiny on the touchstone of Article 19(1)(g) and 16(2) of the Constitution of India. “The Act impinges upon the sacrosanct fundamental right of freedom to practice any occupation or business. The implementation of the Act just when the industrial and business activities are resuming after the Covid pandemic might result in an exodus of investors from the state,” Varma said.

On Wednesday, industry body CII urged the Haryana government to “re-look” at the legislation.

Information technology, auto and export companies based in Gurugram had also said on Wednesday that the Haryana government’s decision will signal that the city and the state were no more business-friendly destinations.

Haryana governor Satyadev Narayan Arya on Tuesday gave his assent to Haryana State Employment of Local Candidates Bill, 2020, which provides for 75% reservation to job seekers who have a salary of less than 50,000 per month in private companies, societies, trusts, limited liability partnership firms, partnership firms. The quota will initially be applicable for 10 years after it is notified by the government.

Apart from tackling unemployment among local people, the state government has said the law will discourage the influx of migrants seeking low-paid jobs, which has a significant impact on local infrastructure and leads to the proliferation of slums.

Haryana’s deputy chief minister Dushyant Chautala, who had made the job quota a central plank of his election campaign in 2019, clarified on Wednesday that the government will make an exemption in the reservation if a company fails to find a local employee.

More than 300 Fortune 500 companies are headquartered in Gurugram that has emerged as one of the largest IT hubs in the country with several top companies setting up operations in the last two decades. It is also home to large auto and auto part makers such as Maruti, Hero Moto Corp and Honda.

The auto industry also said it had hired workers based on merit. “Such a move would not only adversely impact the ease of doing business in the state, but also be detrimental to Haryana’s image of an industry friendly destination,” Deepak Jain, president of the Automotive Component Manufacturers Association of India, said in a statement.

The auto industry has invested over 400 billion in the state, creates employment for 1 million people and accounts for more than 25% of its GDP, according to ACMA.

The Haryana government did not respond to a request for comment on Friday.

Haryana’s unemployment rate hit 26.4% in February, the highest in India and more than three times the national figure, data from the Centre for Monitoring Indian Economy showed.

Other states like Maharashtra and Madhya Pradesh have also moved to preserve jobs for locals as unemployment surged.

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