A. Andhra Pradesh last year become the first state in the country to introduce reservation in the private sector.
Besides Andhra Pradesh, there is a law in Maharashtra that if any industry that gets an incentive from the State Government, then 70% of people at a particular level (basically unskilled workers of that industry) have to be locals.
Recently, Haryana Assembly has passed the Haryana State Employment of Local Candidates Bill, 2020 to reserve 75% of private-sector jobs in the state for local residents.
Similar demands have come up in different states like Karnataka, Madhya Pradesh, Maharashtra, and Gujarat.
Q. What is ‘Locals First’ Policy?
This policy of Nativism implies that jobs that will be created in a state will be first offered to only people who belong to that state.
It is the result of the fear of some locals who believe that their jobs are being taken away from them and provided to the people not belonging to the state.
The states in support of such a policy known as “SON OF SOIL” policy provides an argument that it is the state’s responsibility to fulfil aspirations of its people, also since the state is providing incentives, the industries should not have any problem in following its directions.
Sons of the soil are populations that are culturally dominant in a region of a country, demographically subordinate to the dominant culture of that country, and threatened by the migration of settlers from the dominant culture into their historical homeland.
Q. What is Constitutional Provisions?
The Constitution of India guarantees freedom of movement and consequently employment within India through several provisions.
Article 14 provides for equality before law irrespective of place of birth.
Article 15 guards against discrimination based on place of birth.
Article 16 guarantees no birthplace-based discrimination in public employment.
Article 19 ensures that citizens can move freely throughout the territory of India.
Article 16 of the Constitution guarantees equal treatment under the law in matters of public employment. It prohibits the state from discriminating on grounds of place of birth or residence.
Article 16(2) states that “no citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the State”.
The provision is supplemented by the other clauses in the Constitution that guarantee equality.
However, Article 16(3) of the Constitution provides an exception by saying that Parliament may make a law “prescribing” a requirement of residence for jobs in a particular state.
This power vests solely in the Parliament, not state legislatures.
Q. What are the Supreme Court rulings on the issue?
The Supreme Court has ruled against reservation based on place of birth or residence.
In 1984, ruling in Dr Pradeep Jain v Union of India, the issue of legislation for “sons of the soil” was discussed.
The court expressed an opinion that such policies would be unconstitutional but did not expressly rule on it as the case was on different aspects of the right to equality.
In a subsequent ruling in Sunanda Reddy v State of Andhra Pradesh (1995), the Supreme Court affirmed the observation in 1984 ruling to strike down a state government policy that gave 5% extra weightage to candidates.
In 2002, the Supreme Court invalidated appointment of government teachers in Rajasthan in which the state selection board gave preference to “applicants belonging to the district or the rural areas of the district concerned”.
Q. What are the reasons of such moves?
Vote Bank Politics: Inter-state migrant workers (ISMW) constitute a sizeable “under-used or un-used” electorate as they often do not exercise voting rights. If these workers and potential migrants could be retained and provided with jobs, the parties’ electoral causes will be served.
Increased Incomes and Talent: It will not only retain talent but also incomes which otherwise will go to “other regions”.
Local people have complained that industrialisation in their areas have deprived them of means of livelihood.
Precondition for Land Acquisition: Farmers and villagers, who lose their land in the process of land acquisition for industries, keep such preconditions in which industries have to provide jobs to local youth.
Q. What are the issues in it?
Violates constitutional provisions: Equality is very deeply enshrined in the Constitution all across but Article 16specifically states that no citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect or, any employment or office under the State.
Impacts ‘Unity in Diversity’: This policy can lead to a situation of locals vs non-locals in area, thus posing a threat to the integration of the country. Such a law goes against the spirit of One Nation One Tax, One Nation One Ration Card etc. The law somehow requires one to start preparing the State Register of Citizens (SRCs) as against the National Register of Citizens (NRCs).
Reduced job creation due to deterrence for industries in a state with such restrictions. This would do more harm to natives than actually benefiting them.
Increased risks of labour shortages, rise in unemployment, aggravate wage inflation and worsened regional inequalities are few other possible impacts.
Violates Court directives : It would also violate the landmark Indra Sawhney judgment of the Supreme Court which caps reservation “of any manner” at 50%.
In 1984, the supreme court allowed the domicile reservation in the educational institutions. However, the supreme court in the same case said that policy promotion that violates fundamental right is not allowed as it may lead to fragmentation of the society.
Against Meritocracy and reduces efficiency: It is against meritocracy as skilled workforce is prerequisite to an area of employment.
It would be difficult to attract more investment which is the need for newly formed state.
Impacts freedom of a business: Curbs of any kind ultimately affect business freedom and for a business to flourish, it must function within well-defined parameters with very clear set of policies including lesser sensitivities.
Economic loss: India as an economy has a comparative advantage over other countries because of its large pool of labour. Labour from densely populated northern and eastern regions of the country, migrate to other places for work and keep the wages down, however, providing the jobs only to the locals might lead to economic loss due to high wages.
International impact: The policy might get reflected at an international level, where every country starts giving preference to its citizens for a job. India has protested such moves by countries like the US.
Against the spirit of competition: Such a policy is against the spirit of competition as a local person who is not fully skilled may get the job over the non-local who is fully skilled.
Q. Is this reservation Bill violative of Article 16 of the Constitution of India?
Andhra Pradesh’s decision of introducing 75 per cent reservation for local candidates was challenged in the Andhra Pradesh High Court which observed that “it may be unconstitutional”. The Andhra Pradesh High Court had asked state government to inform if the quota-law was enacted as per the Constitution. Similar concerns were raised in Haryana Vidhan Sabha by opposition parties calling the Bill a violation of Article 16 of the Constitution of India. However, Haryana government claims that while Article 16 talks about the “public employment”, the Bill only pertains to “private sector employment”.
Q. What is the conclusion or way forward in this regard?
The government can come up with certain incentives to companies which are investing a certain amount of money for training the local youths. Such incentives could be in the form of capital for better skill development, lower electricity charges, better infrastructure facilities etc.
For providing employment to the local youth, a state government can learn from the following examples.
In an experiment done in Maharashtra, a lot of Dalit entrepreneurs were encouraged to set up units which in turn provided jobs to others.
Even in Madhya Pradesh, the government encouraged people belonging to vulnerable sections to set up industry so that they are in a position to provide jobs to others.
The best way to grow out of it is to ensure economic recovery and provide enough job opportunities for youths with skill training and proper education as key focus areas, enabling the masses to compete in the free market.
