Andhra Pradesh's local job quota law cleared 20 months ago yet to pick up pace

The Andhra law exempted companies for three years if they demonstrate that specialised manpower needed by them is not available locally but they have to train and engage local candidates within this duration

A legislation passed by the Andhra Pradesh assembly, nearly 20 months ago, to reserve at least 75% of jobs for local candidates in private sector and public private partnership companies in the state has started slow on account of low industrial activity in the state, the lack of adequately trained local candidates, and the government decision to give time to companies to meet the quota.

Employees work to prepare packages for shipment on the conveyor belt at the Amazon.com Inc. fulfillment center in Hyderabad,(File Photo/Bloomberg)

The Andhra Pradesh Employment of Local Candidates in the Industries and Factories Act, 2019 was passed in the state assembly on July 17, 2019. The legislation is yet to be implemented in full, as the state government has chosen to go slow in enforcing the law. “For existing industries which want to go in for expansion or fresh recruitment, we have given three years’ time to implement the new reservation law,” state industries minister Mekapati Gautam Reddy said.

The state’s law has come into focus because of Haryana’s recent law, reserving for locals, 75% of jobs (paying under ₹50,000 a month) in new units, even in the private sector. The Andhra Pradesh law doesn’t mention a salary cap. The Andhra government insists that all new units submit details of the total workforce required under the heads skilled, semi-skilled, administrative and managerial employees.

“The department of industries will grant the no-objection certificate (NOC) only after ascertaining that 75% of employees in all the departments are locals,” the minister said.

A company can be exempted if it writes to the government that it requires specialised manpower, not available locally, but this will require an examination by the state industries department. “In such cases, the employers need to give an undertaking that they will train and engage local candidates within three years in close collaboration with government agencies. Otherwise, the NOC would be withdrawn,” Reddy said. Interestingly, there haven’t been too many new projects in the state in these 20 months.

According to data from the industries department, between October 2019 and September 2020, 44 large and mega industrial projects were approved in the state with an investment of ₹22,282.16 crore, seeking to provide employment to 18,385 people; in the same period, as many as 10,019 micro, small and medium enterprises were proposed at an investment of ₹2,979.86 crore, aimed at providing employment to 76,716 people.

According to Andhra Pradesh Chambers of Commerce and Industry Federation general secretary Potluri Bhaskar Rao, many of these ventures could not take off, due to coronavirus pandemic. “A few companies in the MSME sector have come up, but they could not find a suitable workforce locally,” Rao said.

Vasireddy Murali Krishna, secretary of Federation of AP Small Industries Association, who owns a small-scale chemical business in Krishna district, said that generally, no industry or factory would prefer non-locals to work in their companies if sufficient local talent is available.

“It is easy to get the work done with the locals. But where is the trained workforce locally? Even if we employ the locals as per the government guidelines, there is no guarantee that they would stick to the job. On the other hand, if we employ non-locals, they will work for at least a few years.”

A businessman associated with the state unit of the Confederation of Indian Industry said on condition of anonymity that while most medium and small-scale industries employ only locals, irrespective of the enactment of the legislation by the state government, it is the “big players who engage people from outside the state in all their industries or major projects”.

The businessman gave the example of the Polavaram irrigation and hydel power project built on Godavari river.”The majority of the workforce is from Uttar Pradesh, Bihar, Jharkhand and West Bengal. Can the government insist on employing only local employees?” Hari Prasad, managing partner of Gautami Pumps and Valves said almost 30% of his employees are from Uttarakhand and Uttar Pradesh. “Unfortunately, there is a largescale attrition among the locals, whereas the non-locals stick to their job.”

Andhra Pradesh Skill Development Corporation chairman Challa Madhusudhan Reddy admitted that there was not enough local talent in the state, and added that as a result, the government was not strictly implementing the 75% rule. He added that the government has emphasised skill development to increase their employability.