Haryana government's new law providing 75 percent reservation in the private sector to job seekers from the state will disrupt post-COVID-19 recovery and may even force some companies to consider relocating offices to other states, companies said.
Haryana Governor Satyadeo Narain Arya has given his assent to the Bill, Chief Minister Manohar Lal Khattar said on March 1.
The new law could adversely impact the state's IT and industrial hub of Gurgaon-Manesar, as per the report. The hub houses Pepsi, Coca-Cola, Google, Nestle, HUL, American Express, Maruti Suzuki and Hero MotoCorp among others
Read: Haryana Governor approves bill sanctioning 75% quota for locals in private jobs
"As a general principle, all industry associations, including Confederation of Indian Industry (CII), have taken a view that reservation of this kind is not conducive to the competitiveness of the industry," said Maruti Suzuki Chairman RC Bhargava, as per Economic Times report.
The law, which covers private companies, societies, trusts and partnership firms in the state, will also hit the IT and BPO sector in Gurugram.
In addition to tech giants Google and Microsoft, it is home to offices of Tata Consultancy Services, Infosys, Wipro and HCL Technologies, and outsourcing firms like Genpact and Convergys.
"The move goes against the basic principle of meritocracy that acts as the foundation for businesses to grow and remain competitive,” said Rituparna Chakraborty, the co-founder of staffing firm TeamLease Services, as per the report.
Such protectionism should not scare employers, costing the state much-needed jobs, she added.
The Haryana State Employment of Local Candidates Bill, 2020 provides a quota for local people in private sector jobs that offer a salary of less than Rs 50,000 a month. The quota will initially apply for 10 years, according to the Bill.
The Haryana Assembly had late last year passed the Bill, a key poll promise made by the ruling alliance partner Jannayak Janta Party.
It defines local candidates as those domiciled in the state. For domicile status, a person should be born in Haryana or have lived there for at least 15 years.