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Industrialists term Haryana’s job reservation move regressive, may challenge law in court

Gurugram Information technology, auto and export companies based in Gurugram said on Wednesday that the Haryana government’s decision to reserve 75% jobs for local job-seekers who have a state domicile will signal that the city and the state were no more business-friendly destinations
PUBLISHED ON MAR 03, 2021 11:40 PM IST

Gurugram

Information technology, auto and export companies based in Gurugram said on Wednesday that the Haryana government’s decision to reserve 75% jobs for local job-seekers who have a state domicile will signal that the city and the state were no more business-friendly destinations.

While IT industry bosses termed the government’s new law as regressive, industrialists based in Manesar questioned the legality of the quota and said that they were looking for possibilities to challenge the government decision in a court of law as it will enable “another era of inspector raj in the state”.

Haryana governor, Satyadev Narayan Arya, on Tuesday had given his assent to Haryana State Employment of Local Candidates Bill, 2020, which provides for 75% reservation in private sector to job seekers in the state which 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.

Haryana deputy chief minister Dushyant Chautala, who made the job quota a central plank of his election campaign in 2019, on Wednesday said the state government will begin a massive employment campaign from next month for youths of the state to benefit, as per their qualification and skills.

Chautala, however, also made it clear that the government will make an exemption in the reservation if the company fails to find a local skilled employee. He said the youth of the state will be entitled for jobs of chowkidar, security guard, clerk, steno clerk, and others which offer a monthly salary of 50,000.

Stating that there is a provision of penalty if the firms violate rules of this law, he said private companies will have to mandatorily give complete details of their registration and employees on the portal.

More than 300 Fortune 500 companies are headquartered in Gurugram that has emerged as one of the largest IT and ITes hub 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, while garment exports also forms a major chunk of industry.

Vinod Sood, managing director, Hughes Systiqe and chair, NASSCOM, Haryana, said that the new law and will send a very wrong message to MNCs and IT companies, which are headquartered abroad. “While all other states in India are coming up with forward-looking policies, this reservation will create a perception that Gurugram is no longer a business-friendly destination. Companies abroad don’t want to get into such technicalities and their immediate response would be to expand or shift to Mumbai, Bengaluru, Hyderabad. The reservations might have some caveats, but optics are too bad, and don’t augur well for the city” said Sood.

IT companies also said that instead of imposing reservations there is need to train local youths and skill train them for these jobs.

“We at Nagarro appreciate the desire of the Haryana government to create jobs for local youths. However, it is ironic that an industry that competes around the world and brings nearly 5 lakh crore in foreign exchange into India will have to deal with these restrictions that may hamper its operations and efficiency. We are also nervous that the current scope of reservations may be expanded later. We believe the best way to expand opportunities for Haryana’s youth is equipping them with skills,” Manas Fuloria, CEO, Nagarro, a city-based IT company.

Industrialists based in Manesar were also worried that the job reservations will bring back the era of ‘inspector raj’ and it would be difficult to run industrial units. “Where are the workers in Haryana who are experts in leather cutting, fabric stitching, cutting, weaving. These jobs need talent and is mastered when generations work on the same skill set. This move will destroy the export industry and other manufacturing units in Gurugram and Haryana. We are looking for options to challenge this move in a court of law,” said Manmohan Gaind, vice president, Manesar Industries Welfare Association, who heads an export company.

The Confederation of Indian Industry’s Haryana chapter said that Haryana was already facing a tough competition in attracting industrial investment as other states are offering liberal industrial policies and employment incentive schemes. The government’s new move will prove to be quite the deterrent to bring in new investments and expansion of existing businesses.

“The law mandating job reservation in private sector in Haryana will act as a blow to the industry-friendly image of Haryana. This law is detrimental to the economic growth of Haryana and will impact existing businesses present in the state by slowing down investments and further deteriorating the state’s ease of doing business ranking,” said Anadi Sinha, vice chairman, CII Gurugram zone and group president - HR and corporate affairs, Minda Industries Ltd, which has large presence in the city.

Director general of the Confederation of Indian Industry, Chandrajit Banerjee, too released a statement which read, “At a time when it is important to attract investments at state level, the Haryana government could have avoided imposing restrictions. Reservation affects productivity and industry competitiveness. We hope the state government of Haryana re-looks at the legislation. With Prime Minister’s vision of ‘Ek Bharat Shrestha Bharat’ we look forward to an integrated and mobile labour market within the country.”

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