Haryana’s local employment law is shaky on constitutional grounds, risks driving capital away from state
This week, Haryana joined the league of misguided states to legislate reservation of private sector jobs for local residents. The Employment of Local Candidates Bill 2020, passed by the Haryana assembly in November last year and notified by the government on Tuesday, requires companies to reserve 75 per cent jobs with a gross monthly salary of less than Rs 50,000 for people born in the state or those who have lived there for at least five years. The Haryana government claims that “the Bill will provide tremendous benefits to the private employers directly or indirectly through qualified and trained local force… and enhance the efficacy of industry”. The underlying purpose of such policy nativism might be to boost employment opportunities. But by constricting the talent pool for the industry, going against the Centre’s credo of ease of doing business, the Haryana government risks doing the exact opposite. The local employment requirement has already created apprehensions about a return to the inspector raj era — not unfounded given that the bill gives “authorised officers” powers to enter premises of firms, check records, impose penalties — and that does not bode well for the state’s post-pandemic economic recovery.
The job quota was a poll promise, two years ago, of Dushyant Chautala’s JJP party — a partner in Haryana’s ruling coalition. In July, amidst the raging pandemic, the state government pushed an ordinance to give effect to this promise. Governor S N Arya, however, refused assent and referred the ordinance to the President. The proposed law was shelved in October, only to be tabled and passed in the assembly a month later. The state government hasn’t given a convincing answer to questions related to constitutional propriety that were raised about both the ordinance and the Bill. But the fact that the local domicile rule militates against the fundamental rights to equality and free movement throughout the country and to practise any trade or business, places the Haryana government on shaky legal ground. A similar law passed by the Andhra Pradesh assembly, two years ago, has been challenged before the state high court, and, therefore, not implemented.
The Centre for Monitoring Indian Economy’s data shows that Haryana’s unemployment rate has been in excess of the national average since the past four years. In April last year, about 40 per cent of job seekers from the state returned empty-handed. Though Haryana has not always been short of investments — parts of the state are automobile and software technology hubs and sites of new-age entrepreneurship — industry has sought its human resources from outside the state. One of its longstanding complaints has been the paucity of adequately skilled and locally available workforce, especially tech-talent. Instead of acting on such criticism and making meaningful investments in skill development, the state government has taken recourse to parochialism. It must rethink the new law.
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