Gurugram-based information technology, auto and export companies said on Wednesday that the Haryana government’s decision to reserve 75% of jobs for local job seekers who have public domicile will signal that city and state were no longer suitable destinations for business.
While IT industry executives called the government’s new law regressive, Manesar-based industrialists questioned the legality of the quota and said they were looking for possibilities to challenge the government’s decision in court, because it will allow “another era of inspector raj in the state”.
Haryana Governor Satyadev Narayan Arya on Tuesday gave his assent to the Haryana State Local Candidate Employment Bill, 2020, which provides for a 75% reservation in the private sector for job seekers in the state who earn less than ₹50,000 per month in private companies, corporations, trusts, limited liability partnerships, partnership companies. The quota will initially be applicable for 10 years, after its notification by the government.
Haryana’s Deputy Chief Minister Dushyant Chautala, who made the job quota a central part of his election campaign in 2019, said on Wednesday that the state government would start a massive campaign for jobs from next month for young people in the state to benefit, according to their qualifications and skills.
Chautala, however, has also made it clear that the government will grant an exemption on the reserve if a company fails to find qualified local employees.
Stating that there is a penalty provision if companies break the rules of this law, he said private companies will be required to provide full details of their registration and employees on the portal.
More than 300 Fortune 500 companies are headquartered in Gurugram, which has grown into one of the country’s largest IT and IT hubs, with several large companies having established operations over the past two decades. It is also home to major auto and auto parts makers such as Maruti, Hero Moto Corp and Honda, while apparel exports are also an important part of the industry.
Vinod Sood, Managing Director, Hughes Systiqe and Chairman, NASSCOM, Haryana, said the new law will send a very bad message to multinationals and IT companies, which are headquartered overseas. “As all other states in India develop forward looking policies, this reservation will create a perception that Gurugram is no longer a good business destination. Businesses overseas don’t want to get into such technicalities and their immediate response would be to expand or move to Mumbai, Bengaluru, Hyderabad. Reservations may have a few caveats, but the outlook is bad and doesn’t bode well for the city, ”Sood said.
IT companies also said that instead of imposing reservations, there was a need to train local youth for these jobs.
“We appreciate the government’s desire to create jobs for local youth. However, it is ironic that an industry that competes across the globe and brings nearly ₹5 lakh crore of foreign exchange in India will have to deal with these restrictions which may hamper its operations and efficiency. We are also concerned that the current scope of reservations will be broadened at a later stage. We believe the best way to expand opportunities for young people is to equip them with skills, ”Manas Fuloria, CEO of Nagarro, a city-based IT company.
Manesar-based industrialists also feared that job reservations would bring back the era of “inspector raj” and that it would be difficult to operate industrial units. “Where are the Haryana workers who are experts in cutting leather, sewing fabric, cutting, weaving. These jobs need talent and are 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 decision in court, ”said Manmohan Gaind, vice president of the Manesar Industries Welfare Association, which runs an export company.
The Haryana Chapter of the Confederation of Indian Industry said Haryana already faces stiff competition to attract industrial investment as other states come up with liberal industrial policies and employment incentive programs. The government’s new decision will prove to be enough of a deterrent to attract new investment.
“The law will deal a blow to the image of Haryana, which is favorable to the industry. This law is detrimental to Haryana’s economic growth and will impact existing businesses operating in the state by slowing investment and further deteriorating the ranking of ease of doing state business, ”said Anadi Sinha , Vice President of CII Gurugram Zone and Group President – HR and Corporate Affairs, Minda Industries Ltd, which has a strong presence in the city.