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Jharkhand bill: 75% quota for locals in private jobs


  • The Jharkhand Assembly recently passed a Bill, which provides 75% reservation for local people in the private sector up to ₹40,000 salary a month.
  • Once notified, Jharkhand will become the third State in the country, after Andhra Pradesh and Haryana, to pass such law for the reservation in private sector jobs.


GS-II: Social Justice and Governance (Social Empowerment, Government Policies & Interventions), GS-III: Indian Economy (Employment)

Dimensions of the Article:

  1. Why is the demand for reservation in private sector gaining momentum?
  2. What is ‘Locals First’ Policy?
  3. Arguments in favour of quota in private
  4. Concerns with implementation ‘Locals First’ Policy
  5. Way Forward
  6. Back to the Basics: Constitutional Provisions regarding reservation

Why is the demand for reservation in private sector gaining momentum?

  • There is an implicit assumption in this demand that employment opportunities are increasing in the private sector merely because it is expanding.
  • The policy of LPG (1991) reduced the number of employment opportunities in the public sector, which, in turn, reduced the job opportunities for backward communities. A revelation of the reduction of employment opportunities in the public sector made some political parties and their leaden advance the demand for extending reservations to the expanding private sector.
  • The demand- jobs for locals only are bound to go down well with the electorate. The leadership has been supporting the general cause of SC/STs and OBCs have only been repeating their support for the demand for extending reservations to the private sector.
  • The agrarian sector is under tremendous stress across the country, and young people are desperate to move out of the sector. But there is a serious dearth of jobs (private and government).
  • Every campaign for a sons-of-soil policy, for job reservation, whips up this anti “outsider” sentiment. In the case of Haryana, one of the reasons given for justifying reservations was the proliferation of slums, presumably attributed to “outsiders” shifting to the State for work.
  • The Centre and many state governments probably doubt the robustness in the industry’s efforts when it comes to affirmative action. Several reports — for instance, the State of Working India 2018 released by the Centre for Sustainable Employment of the Azim Premji University. It has shown that discrimination is one of the reasons for under-representation of Dalits and Muslims in the corporate sector.
  • Another major reason for the appeal of jobs for locals is inherent xenophobia. This is not unique to India or Indian States, but is universal. It was spectacularly manifest in the Brexit vote, when Britons thought that foreigners were taking away local jobs, and hence voted to secede from the European Union.

What is ‘Locals First’ Policy?

  • It implies that jobs that will be created in a state will be first offered to only people who belong to that state.
  • This policy is populist in nature. Unemployment or employment creation has been a major issue in recent times.
  • This policy is also the result of the fear of some locals who believe that their jobs are being taken away from them and provided to the people not belonging to the state.
  • Besides Andhra Pradesh, there is a law in Maharashtra that if any industry that gets an incentive from the State Government, then 70% of people at a particular level (basically unskilled workers of that industry) have to be locals.
  • The states in support of such a policy provides an argument that it is the state’s responsibility to fulfill aspirations of its people, also since the state is providing incentives, the industries should not have any problem in following its directions.
  • It has been seen that such laws remain in the statute books and are not enforced.

Arguments in favour of quota in private

  • Often the privileged castes (or groups) use nefarious arguments to protect their interests.
  • Reservations once accepted in the constitutional framework are not a charity that is to be kept away from the ‘meritocracy’ of ‘private’ operations.
  • Like all other constitutional guarantees, one may feel the necessity to get ensured of equal opportunity in all spaces.
  • Giving preference and quotas for socially and educationally deprived sections in the private space is, therefore, in keeping with this fundamental tenet.
  • As the NCBC argues, with the number of jobs generated in the state sector shrinking steadily, for the promise of quotas in the Constitution to have any real meaning, it may be inevitable to extend it to the private sector.

Concerns with implementation ‘Locals First’ Policy

  • Equality is very deeply enshrined in the Constitution all across but Article 16 specifically states that no citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect or, any employment or office under the State.
  • This policy can lead to a situation of locals vs non-locals in area, thus posing a threat to the integration of the country. Such a law goes against the spirit of One Nation One Tax, One Nation One Ration Card etc. The law somehow requires one to start preparing the State Register of Citizens (SRCs) as against the National Register of Citizens (NRCs). Also, on the issue of domicile reservation in educational institutions, the Supreme Court had observed that since it is the state that is investing money into educational institutions and it is in the state’s interest to promote education in its own state, some amount of domicile reservation can be permitted.
  • It might discourage capital investment in the region. It can result in a flight of capital from India to Africa where Indian entrepreneurs are being encouraged to invest by countries like Gabon.
  • After the short-term benefits of the policy are exhausted, the State Government might need to find other ways to generate more jobs for the locals.
  • Curbs of any kind ultimately affect business freedom and for a business to flourish, it must function within well-defined parameters with very clear set of policies including lesser sensitivities.
  • India as an economy has a comparative advantage over other countries because of its large pool of labour. Labour from densely populated northern and eastern regions of the country, migrate to other places for work and keep the wages down, however, providing the jobs only to the locals might lead to economic loss due to high wages.
  • The policy might get reflected at an international level, where every country starts giving preference to its citizens for a job. India has protested such moves by countries like the US.
  • Such a policy is against the spirit of competition as a local person who is not fully skilled may get the job over the non-local who is fully skilled.
  • On a political level, it would lead to the rise of a strong Sons-of-soil movement and thus end up affecting the spirit of Cooperative Federalism.

Way Forward

  • The government can come up with certain incentives to companies which are investing a certain amount of money for training the local youths. Such incentives could be in the form of capital for better skill development, lower electricity charges, better infrastructure facilities etc.
  • Our dependence on the government for everything and lack of individual self-reliance has promoted incompetent people and strengthened the bureaucracy, which has hurt India immensely in the long-run.
  • Recently, with rapid technological innovations taking over, the government has finally understood that they are not made for business and had to embrace private sector with open arms.
  • States like Kerala have instituted enlightened policies of training migrant workers in the local language and also offering good education for their children.
  • In the medium to long term there is no option but for a big national focus on education, skilling, training and enhancement of human capital, which can get us out of this scarcity mindset of rationing jobs for locals.

Back to the Basics: Constitutional Provisions regarding reservation

  1. Article 15 (4) allows the State to make any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes. This provision was extended to admission in educational institutions by 93rd Amendment Act, 2006 (except minority educational institutions).
  2. Article 16 (4) allows State to make any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State.
  3. Article 16(4A), empowers state to make provisions for reservation in matters of promotion to SC/ST employees.
  4. Article 46 states that the State shall promote with special care the educational and economic interests of the weaker sections of the people, and, in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation.
  5. Article 243D provides reservation of seats for SCs and STs in every Panchayat.
  6. Article 243T provides reservation of seats for SCs and STs in every Municipality.
  7. Article 330 states that seats shall be reserved in the Lok Sabha for the Scheduled Caste and Scheduled Tribes.
  8. Article 332 of the Constitution of India provides for reservation of seats for the Scheduled Castes and the Scheduled Tribes in the Legislative Assemblies of the States.

-Source: The Hindu

February 2024