Haryana government’s job-quota law which reserves 75% of private-sector jobs for its state’s locals has concerned the companies in the state, but at the same time, analysts see this as an interesting opportunity for other urban cities like Noida, Greater Noida, etc. Is Haryana’s loss going to be Noida’s opportunity to grow? Let’s find out.

Haryana State Employment of Local Candidates Bill  

In November 2020, the Haryana government walked along the lines of Andhra Pradesh and introduced the Haryana State Employment of Local Candidates Bill. The bill applies to all private organizations, trusts, LLPs (Limited Liability Partnerships) across the state which will have to have a 75% of quota for domiciles of Haryana. The bill found its roots in November 2020 when the Haryana Assembly passed the bill and later on March 2, 2021, the Governor gave his affirmation.

According to the bill, all the private organizations, trusts and LLPs or any person who employs 10 persons or more under his entity will need to have a quota of 75% for domiciles of Haryana under a particular salary bracket. A domicile of Haryana will be called a local candidate and will be able to seek employment under the reservation. To be considered a domicile, the candidate will need to register themself on the Haryana’s portal to seek the benefit. Organizations, trusts, and LLPs too will need to make recruitments through the portal so that the state government can keep an eye on the organizations.

It should be noted that companies that will fall under this bill will need not have the entire workforce’s 75% be from Haryana. Employers will need to employ 75% of Haryana’s candidates for positions where gross monthly salary will not be more than Rs. 50,000.

Employers can seek an exception from the law due to the fact that they could not hire local candidates of a desired skill or qualification due to availability. However, they would need to go through a complicated and time-consuming procedure where they first apply to a Designated Officer and send them a letter. The Designated Officer will make the appropriate inquiry and evaluate the attempts the employer made in attaining talents from the state’s workforce. This Designated Officer will hold the accountability to reject or accept the claim of the employer. The Designated Officer can also assist the employer in training the local candidates to achieve the desired skill they may require for a particular position.

What Challenges will employers from Haryana face due to the 75% quota law? 

In a statement given by the New Delhi-based privately run Confederation of Indian Industry, Chandrajit Banerjee, Director General CII said, “Reservation affects productivity and Industry competitiveness. At a time when it is important to attract investments at the state level, the Haryana Government could have avoided imposing restrictions on Industry.”

Haryana’s decision to reserve 75% quota for its state’s domiciles for employment may also impact smaller firms. Smaller firms prioritize ease of doing business more than anything else. But thanks to the new law, reservations, permissions will add the burden of complexities of compliances on these firms. It may also increase in corruption as Designated Officers may make their cut by holding on to a company’s exception letter to hire non-Haryana domiciles longer than usual.

Moreover, the law can be a catalyst in the mob-mentality. When an organization will be forced to hire locals from the same state, these locals may thrive on the strong network they already have between them. 75% of locals under the same organization may give a rise in unionisation which could lead to a majority getting together and raising demands, fair and even unfair.

In November, when the bill was talked about in the Haryana State Assembly, several industrialists frowned at the decision. Even individuals in the Haryana political machinery like MLA Ram Kumar Gautam objected against the Bill and called it “absolutely ridiculous legislation”. MLA Ram Kumar considered the law “100% wrong” and said that if the state passes such a bill, other Indian states will follow it and the economy will be in “complete chaos”.

Opportunities that lurk for Noida in Haryana’s decision 

To understand how Noida and other neighbouring cities can take advantage of Haryana’s new bill, let’s first understand what Haryana’s Gurugram city can have to lose in the situation.

Gurugram, previously known as Gurgaon, started mushrooming into an IT and Finance hub in the 1970s when Maruti Suzuki took the leap of faith and laid the foundations of its plant in Gurgaon. Thanks to the economic liberalization that followed, by the 90s, famous companies like General Electric, Google, Nestle, Coca-Cola, etc made their way to Gurgaon. The city as of today is the second biggest IT, and banking hub and houses 50% of the Fortune 500 companies. Due to this, people in Haryana benefitted immensely from the state’s prosperity. To put this in context, one can think of how one person goes on to create 3-5 more indirect jobs through their entrepreneurial venture.

Due to the new 75% reservation law for employment, these companies may need to rely on a semi-qualified work-force that is the domicile of Haryana, but not as equipped to help their organizations grow. Meanwhile, Uttar Pradesh, which boasts cities like Noida, Greater Noida, and last year, had chucked 35 out of 38 labour laws through ordinances. The measure was introduced to accelerate the economic and industrial slowdown due to the COVID-19 pandemic. Both Noida and Greater Noida, are located within a 50 km radius of New Delhi. Unlike Gurugram though, both the cities have 2 functional airports which include the new upcoming Noida International Airport.

While Haryana has introduced a law to appease the locals, its bill is largely a reminder that the economy can be only accelerated if the right person for the job does the job. Although, it remains to be seen whether the companies that fall under the gavel can train Haryana’s ill-equipped work-force and turn the fortunes of the city around.

 

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