Industry bodies have raised a red flag over Haryana’s new law mandating reservations in private jobs for local domiciled residents that will be rolled out from January 15. Companies and industry bodies are up in arms against what they characterise as an “anti-free market” enactment which would curtail fresh investments and expansion of the existing businesses in the State. Some have even called for a repeal of the legislation.
The Haryana State Employment of Local Candidates Act, 2020 covers private companies, societies, trusts and partnership firms and any entity that employs 10 or more personnel. It mandates 75 per cent reservation of local youth in private sector jobs that offer a salary of ₹30,000 per month or less.
‘Not the best model’
Sunjay Kapur, Immediate Past Chairman of CII Haryana and Chairman, Sona Comstar said, “This is a restrictive practice that will hinder the growth of the industry and make it uncompetitive. It is not the best model to follow to create employment and employability and we believe the State government and the industry can come together to look for other solutions as opposed to creating restrictions. It will set a wrong precedent.”
Kapur said this can create challenges in terms of future expansion of businesses and said the industry will need to see the fine-print of the regulations. “In the next few days, we are looking to hold a special council meeting with other industry associations,” he added.
Industry bodies such as FICCI believe this could impact the business-friendly image of the State, ease of doing business rankings and discourage fresh investments. Industry players said that it needs to be seen whether enough skilled and semi-skilled workforce is available.
Pradeep Multani, President, PHDCCI, said the regulations could result in businesses looking to move out of the State.
“If Indian industry has to be competitive globally, we need to be able to have the most efficient workforce. Investors and businesses source the best human resources available on merit and talent rather than domiciles of the candidates and draw on talent from across the country. A lot of our members have manufacturing units in Haryana and they are worried about the impact of this regulation on their businesses. While we are in favour of generating employment, no compulsion should be put on businesses,” he added.
Anil Bhardwaj, Secretary General, Federation of Indian Micro, Small and Medium Enterprises believes that the regulation will create an artificial distortion in the free market economy and will not be sustainable.