01 May Reservation In the Private Sector
Reservation In the Private Sector
This article covers “Daily Current Affairs” and the topic details “Reservation In Private Sector”. The topic “Reservation In Private Sector” has relevance in the Polity and Governance section for the UPSC CSE exam.
Relevance of the topic “Reservation In Private Sector”
For Prelims:
What is Reservation In the Private Sector?
What are the features of the Reservation In the Private Sector?
For Mains:
GS 2: Polity and Governance
What are the arguments in favour of Reservation In Private Sector?
What are the arguments against Reservation In the Private Sector?
Way Forward
Why in the news?
Recently, it has been reported that the local reservations in the private sector could have been a reason behind the fall in investments in Haryana. A law was passed in Haryana that provided 75 percent reservation in the private sector to job seekers from the state.
Though the law has been kept in abeyance after being challenged judicially, the suspense over its implementation remains a worry for investors.
What is the Haryana State Employment of Local Candidates Bill?
The Haryana State Employment of Local Candidates Act, 2020 was passed on November 6, 2021, and became effective on January 15, 2022.
The Act is aimed at increasing job opportunities for local residents in Haryana and requires private-sector employers to reserve 75% of job positions for individuals who have been domiciled in the state for at least 5 years.
In addition to Haryana, other states such as Andhra Pradesh, Karnataka, Rajasthan, Maharashtra, and Telangana have also recently implemented similar policies aimed at promoting employment opportunities for local candidates in both public and private sectors.
What are the features of the Haryana State Employment of Local Candidates Bill?
Key Features:
- The Bill seeks to reserve 75% of new jobs for local candidates in private establishments.
- Private establishments may claim exemptions if candidates of desired skill are not available.
- Establishments must mandatorily register all employees earning less than 50 thousand rupees on a designated portal.
What is the purpose of the law?
The purpose of the Haryana State Employment of Local Candidates Act, 2020 is:
- To promote employment opportunities for local residents in the private sector within the state of Haryana.
- To prevent the outflow of employment opportunities to individuals from other states.
- To encourage economic growth within the state by promoting the hiring of local talent.
What are the issues with the law?
-
- Violation of the Constitutional Rights: A state law providing for reservation in private establishments on the basis of residence may not be constitutional.
- Article 16(2) of the Constitution specifically prohibits any discrimination based on place of birth or residence in matters of public employment.
- Article 19(1)(g) of the Indian Constitution guarantees all citizens the fundamental right to practise any profession or engage in any occupation, trade, or business. However, mandating private institutions to hire a specific group of candidates could be seen as infringing on an institution’s right to freely carry out its occupation or business.
- In 2002, the Supreme Court held that unaided private educational institutions must have autonomy in their administration and management.
- Reservation to the extent of 75% may violate the guidelines laid down by the Supreme Court.
- In 1992, the Supreme Court of India established guidelines that placed limits on the extent of reservation provided through Article 16(4) for backwardness. The court ruled that the reservation provided under Article 16(4) (which includes a reservation for backward classes in public services) cannot exceed 50% to ensure that the efficiency of the administration is not compromised.
- Constraints on private establishments in hiring may be detrimental to their efficiency.
- It has been noted that any kind of restriction in the employment of people by companies may lead to skill mismatch and loss of productivity and efficiency.
What are the arguments in favour of Reservation In Private Sector?
There are several arguments in favour of reservation in the private sector, including:
- Social Justice: The aim is to uplift and empower the local people with job opportunities.
- Discourages Migration: The aim of such a law is to reduce the trend of migration where people go to distant areas for employment. Such an outflow puts pressure on the resources of the area.
- Corporate Social Responsibility: Private companies have a responsibility towards society and the community of the area they are operating in.
- Inclusive Growth: Such a law can give individuals a job opportunity who were previously excluded from the job market. This, in turn, can increase their purchasing power and contribute to overall economic development.
- Equitable development: It has been seen that the jobs are occupied by a section of people from developed areas leading to the marginalisation of the local population which works only as supporting roles.
- Address the agrarian distress: Agriculture has not been a profitable mode of income pertaining to the vagaries of monsoons and high input costs. Such a law aims to employ people from the farming community to get a job in nearby areas.
What are the arguments against Reservation In the Private Sector?
There are several arguments against reservation in the private sector, including:
- Violation of Freedom of business and employment: It has been argued that reservation policies infringe on the freedom of employers to choose the best candidates for the job based on merit.
- Loss of productivity and efficiency: They argue that reservations may force companies to hire less qualified candidates simply because they belong to the region where the reservation is given, which may lead to inefficiency and loss of productivity.
- Reverse Discrimination: Reservation policies may also lead to reverse discrimination, where qualified candidates from non-reserved categories may be denied opportunities simply because they do not belong to a reserved category.
- Economic Impact: This may have negative economic consequences, as companies may face higher costs due to having to hire less qualified candidates or having to provide additional training to bring them up to speed.
- Competitiveness: Reservation policies may also lead to decreased competitiveness in the private sector as companies may be forced to hire candidates who may not have the necessary skills or experience to compete in the market.
Way Forward
The issue of unemployment is genuine but there are other ways to deal with the issue. Some of the workable plans can be to achieve the required outcomes are as follows:
- There is a need for skilling and training the local youth to become competitive in the labour force.
- There can be an incentive system for companies to hire a certain percentage of the workforce from the state.
- The State can also direct the companies for a need-based reservation and not a blanket reservation scheme.
- There is also a need for continued review of the scheme.
Sources:
https://prsindia.org/bills/states/the-haryana-state-employment-of-local-candidates-bill-2020
Plutus ias current affairs 1st May 2023
No Comments