Worker with cartons of fabric at a textile market in Surat. (PC-NYT) File Photo.
The Haryana government has passed a law reserving 75 percent of private-sector jobs for local youth. This is applicable for all jobs with a monthly pay of up to Rs 50,000 and has sent shockwaves among companies. In an interview with Moneycontrol, Lohit Bhatia, President, Workforce Management, Quess Corp, said that this change could disrupt labour supply in the region. Excerpts:
Q: How will the 75 percent reservation law impact companies?
A: Haryana has the largest employment in the manufacturing (auto and ancillaries), ITES/ BPO, retail and tourism sectors, and all these industries predominantly hire at below Rs 50,000 per month. This is the slab that is affected. The skills in these segments may not be completely in line with quality and availability requirement at any given time within the state. Haryana, otherwise, has a robust trade, real-estate and farm segments, where the aspirations of the youth is to earn beyond Rs 50,000 per month, which may not allow the current demand to be fulfilled by the state’s domicile persons.
Q: Does Haryana have adequate skills locally for this?
A: Ideally, the industry should have been given a three-year window to comply, and initially start with 25 percent reservation, and, gradually, increase upwards, as talent training and development takes place as per the requirements of the industry. Any knee-jerk reaction to talent/ labour supply markets will disrupt businesses and the competitiveness of the Haryana industry.
Q: Won’t this lead to exodus of companies from the state?
A: Haryana is a land-locked state, surrounded by Rajasthan, Punjab, Delhi, Uttar Pradesh, Uttaranchal and Himachal Pradesh. With porous borders, it becomes impossible to stop labour movement in a meaningful way. Thus, only large premises where persons work under one roof will be affected, and they will lose the flexibility of working in Haryana. Any such disruption in labour demand and supply impacts the overall business effectiveness in a state.
With work-from-home (WFH) currently practised by many service companies, the concept of domicile itself is negated, and it will be counter-productive for the industry during an economic recovery cycle.
Q: Is there a way of nurturing local talent?
A: Government/ industry Public-Private Partnership (PPP) training projects, with clearly defined apprenticeship programmes for the local youth, would have been a better solution. Coupled with the government of Haryana first testing a 12-month period, with companies using the portal to hire Haryanavi youth, this would have clearly showcased the demand-supply mismatch, and allowed PPP projects to focus on areas where it is needed.
We further need to see certain segments like facility management/ cleaning skills, and other similar roles with minimum wages, which are not aspirational or desired by most upwardly mobile youth in Haryana. Many such roles are filled by migrants from economically weaker states in the NCR region.
Q: Won't this move also nudge other states to make similar decisions?
A: With India desperately trying to become a one-nation model with the goods and services tax (GST) and now labour codes, this is a huge step backwards. This also goes against the principals of natural justice and equality as enshrined in the constitution. It may not pass muster with the Supreme Court ruling that total reservation should not exceed 50 percent.
The Haryana government will also be deeply hit, economically, if employers and jobs move to adjacent states, taking away the tax-paying and real-estate buying professional population of the state.