The Andhra Pradesh government's proposed law to enforce 75 percent reservation for local candidates in private sector jobs may be right in intent, but conceptually flawed and may have little practical value beyond political jingoism. If job creation is the intention of the government of Chief Minister YS Jagan Mohan Reddy, the move may become counterproductive.
Job reservation for local candidates is a politically potent move and Jagan had campaigned on reservation for locals during the last general elections. Andhra Pradesh will become the first state to reserve jobs for local candidates, though similar demands have come up in different states like Karnataka, Madhya Pradesh, Maharashtra, and Gujarat. The Congress party government led by Chief Minister Kamal Nath in Madhya Pradesh has vowed 70 percent reservation for native candidates.
The Andhra Pradesh government intends to make a 75 percent threshold for local talent compulsory across all categories of private enterprise. This would mean irrespective of the availability, all private sector enterprises will have to ensure a minimum of 75 percent employment for local candidates. A report on the New18 website says the provision is calculated to prevent the employers from getting around the norm by claiming the non-availability of local talent of a particular skill level.
In the absence of local candidates of a particular skill level, the law would force the employers to recruit them anyway and train them. The government has promised help to upskill the staff, but this could be time-consuming. Businesses that have to remain nimble to adapt their business strategies to changing market situations may find it tough to meet this requirement.
A provision of such sweeping import could in fact hinder the state's economic growth by affecting the ease of doing business. Ease of recruiting talent is a major aspect that influences the index. The law threatens the position of Andhra Pradesh at the top of the index that is maintained by the World Bank at the behest of the central Ministry of Personnel, Public Grievances. Andhra Pradesh was number one on the 2018 index with 98.42 points, ahead of neighbour Telanga at 98.33 points and Haryana at 98.07 points in the third place.
Economic migration has always been the prime mover of industrialisation around the globe and areas that have hampered the process have remained remarkably rural in their characteristics and lagged in employment generation. Telangana is a direct competitor with neighbouring Andhra Pradesh for industrial investment. A drop in the ease of doing business ranking could adversely affect the flow of investments and employment generation, experts say.
There is already a domicile clause for government jobs that require candidates to be ordinarily resident for a certain length of time in a state to be eligible for a job. The industry will view a stipulation that goes beyond the domicile clause as regressive.