AAP's promise of private sector jobs for locals in Gujarat: Status check

Similar laws by Andhra Pradesh and Haryana have been challenged in courts, with critics arguing that they violate Article 16(2) and (3) of the Constitution

Addressing a town hall meeting in Bhavnagar in poll-bound Gujarat on Tuesday, Aam Aadmi Party National Convenor Arvind Kejriwal promised to bring in a legislation ensuring 80 per cent reservation for local youth in private sector jobs in the state.

The AAP is only the latest entrant in a long list of political parties that have made similar promises in different states in recent years to make domicile criteria for reservations in private jobs.

Precedent

Andhra Pradesh was the first state to bring in a law that mandated domicile as criteria for employment in the private sector. The Andhra Pradesh Employment of Local Candidates in the Industries Act, 2019 asked the existing industries to ensure 75 per cent employment to local candidates within three years from the date of commencement of the Act.

Soon, the Karnataka government in October 2020 issued an order that natives of the state should be given priority by private companies registered within the state.

This was followed by the Haryana government’s notification of a law reserving 75 per cent jobs for locals, which came into effect in January 2022. The law requires firms to reserve 75 per cent of all jobs offering a salary of less than Rs 30,000 a month for eligible candidates of the state.

Following the Haryana move, the Jharkhand Assembly passed a Bill in December 2021 providing 75 per cent reservation for locals in the private sector for salaries up to Rs 40,000 a month.

Why this race

Industry experts have often cited the mismatch between the skills and the education that the youth possess. According to the All India Survey on Higher Education 2019-20, 78.6 per cent of colleges are privately managed and yet there is a huge mismatch between the education offered on the one hand and the skills and employability of students on the other.

According to a CMIE report that analysed the data between September and December 2019, the unemployment rate among graduates was 14.6 per cent, as compared to the national rate of 7.52 per cent.

The shock of pandemic-induced lockdown in March 2020 provided fresh impetus for such calls to reserve work for the “locals”. In another report based on data between January and April 2022, CMIE found the level of unemployment among graduates was 17.8 per cent, though down from 19.3 per cent in 2021. In Rajasthan, the unemployment rate among the graduates was 54.2 per cent, the report noted.

To address this, governments have looked for short-term measures like reserving jobs for locals or fixing quotas upon the industry.

Challenges faced

These laws have faced legal hurdles in the past and have been challenged by the industry as well. The Andhra Pradesh Act was challenged in the high court for being unconstitutional as critics claimed that it violated Article 16(2) and (3) of the Constitution that prohibit discrimination in employment on the ground of place of residence. Similarly, the Haryana Act was stayed by the Punjab & Haryana High Court in February 2022. However, the Supreme Court set aside the high court’s order because it did not give “sufficient reasons”, and asked the latter to decide on the matter. The case is pending before the high court.

The Supreme Court in Pradeep Jain vs Union of India (1984) case discussed the issue of legislation for “sons of the soil” and held that such policies would be unconstitutional but did not expressly rule on it. In the Sunanda Reddy v State of Andhra Pradesh (1995) case as well, the Court repeated its earlier interpretation in Dr Pradeep Jain case.

Also, private employers do not go on an annual recruitment drive to fill vacancies identified in advance but hire as and when required. The state can recommend a preference to locals but ensuring that it is followed would be difficult. For instance, in 2017, Karnataka had considered similar legislation but it dropped the idea after the state’s advocate general raised concerns over its legality. However, the state brought in a similar order in 2020.