75% Job Reservations for Locals in Pvt Sector would Dissuade MNCs, Foreign Investment
The foreign companies have urged the state governments to talk to the industry representatives before designing a new regulation that would have an impact on the businesses.
NEW DELHI: Haryana Government’s proposed ordinance making it mandatory for the private sector companies situated in its territory to reserve 75 percent of jobs for locals from the state, has attracted the ire of the industry.
According to industry, the decision to reserve jobs for locals has come at the time when a huge number of multinational companies (MNCs) from Japan, Korea, USA, and other countries are planning to relocate their production facilities from China, and are on the lookout of suitable nation/state to shift their offices and production basis.
Last year, Andhra Pradesh too had announced similar decision making 75 percent jobs reserved for local youths in private sector entities. Industry fears that other states in the country might join the league, and take similar steps.
Such a decision to force companies to employ the majority of their workforce from local youths of the state where their offices and production facilities are situated would dissuade foreign investors from making investments, and they would look for alternate states or countries like Vietnam, Philippines or others in ASEAN blocks.
Korean Chamber of Commerce and Industry (KOCHAM) in India that represents about 750 Korean companies here has expressed its concern over some states going in for mandatory 75% job reservation for local youths.
For months of strict lockdown and gradual unlock phasing, KOCHAM was quite busy. Companies burst out with questions, said Hee-Chul Jung, Secretary-General, KOCHAM adding that KOCHAM would like to share just some of them and make one suggestion that could serve as a solution and tool for investment promotion.
“Some state governments are now making it mandatory to recruit at least 75% of the workforce only from citizens of their state. The circumstances are understandable as migrants returned home and need to find work. But such a decision is a temporary cure and could be a blow to inviting companies that need to source manpower with the right skills from all over India,” said Hee-Chul Jung.
However, the Indian companies also have expressed their serious concern on the job reservation quota for local youths, saying that the decision was illogical and did not have any authentic bases to it.
“Decision of the Haryana government is baseless and it will not be practical to implement in the case of workers. The state does not have its native workforce because of the state being an affluent one. Haryana is known for fertile land and rich farmers and landlords, the minimum wage is 12,000 in Haryana for the workers,” said Jagdish Kukreja, an HR Expert, and promoter of EDP Services India, an HR Outsourcing company that has been serving large companies like Maruti Suzuki, and others for over two decades.
“The decision is also impractical because of the high cost of living in industrial clusters like Gurugram and Faridabad. The workers from small towns of the state cannot afford to survive in these clusters because of the high cost of living such as high property rentals. Nor the workers can afford to travel between their hometowns to workplaces because of poor public transport infrastructure,” Kukreja added.
However, the officials in the Haryana government have their own logic to support the 75% job reservation decision.
They claim that Haryana was capable of producing a huge skilled workforce by providing them skill-set training, and for this, they said the state has its dedicated Sri Vishwakarma Skill University, and set of vocations training institutions. It is claimed that there would be no dearth of skilled and trained manpower for the industries.
However, the KOCHAM has suggested the state government talk to the representatives of the industry-first before designing a new regulation that would have an impact on the businesses and share the results with the public right away.
“And when such meetings are held, don’t fill the industries with just local companies. Let foreign investors like Korean companies join the discussions,” said Hee-chul Jung.
