Parties have promised to bring in legislation to reserve 75-85% of jobs for locals if they are elected.

MK Stalin addressing the press surrounded by cadre and raising his hand and pointing a finger
Money 2021 Tamil Nadu Assembly Election Saturday, March 13, 2021 - 17:58

Ahead of the upcoming Assembly elections, the DMK announced in its manifesto that it would bring in a law to reserve 75% of jobs in companies that are set up in the state for Tamils. This is assumed to be both in public as well as private sector jobs. The AMMK in its manifesto meanwhile said it will give priority to people of Tamil Nadu in the workplace by enacting a legislation like Maharashtra and Gujarat to give 85% quota in government jobs to Tamil people.

Reservation in jobs for locals has been a long simmering issue in the state. The DMK has earlier sought 90% reservation for Tamils in central government jobs in Tamil Nadu. In 2019, the PMK had also made a similar pitch for reserving 80% of private sector jobs for Tamils. Now, ahead of the election, it said that state government jobs will be for Tamils only, and it will make it mandatory for 80% jobs in private institutions to be given to Tamils. (The AIADMK has not released its manifesto yet.)

The demand gained ground amid several controversies over north Indians being appointed to a majority of central government posts in the state in some sectors. In May 2019, the All India Railway Act Apprentice Association had alleged that north Indians were given preference for vacancies and apprenticeship training in the Southern Railways, and sought a probe. The organisation had then said that 1,765 candidates had been given the order for apprenticeship training at a workshop in Trichy, of which only 165 were from Tamil Nadu and the rest were candidates from the north.

Last month, opposition parties in the state raised questions over the recruitment policy adopted by the Neyveli Lignite Corporation. Based on the shortlist of candidates to be interviewed, leaders from the DMK, CPI(M) and VCK pointed out that of the 1,582 candidates who passed the exam, only 11 belonged to Tamil Nadu.

Speaking to TNM on the reservation for Tamils in jobs, Villupuram MP from VCK, D Ravikumar said, “The unemployment rate is increasing in the country and even the employment that’s available is going to other people of northern states. Because of the AIADMK government, several jobs in the state government sector went to the people of northern states in the past. This cannot be fair when unemployment rates are increasing.”

He added that Tamil Nadu had one of the highest Gross Enrolment Ratios in higher education (number of students in college as a percentage of the population of people in the college-going age-group) in the country. “We naturally need more job opportunities for graduates than others. So, if this is implemented, more Tamils will get jobs,” he added. In 2018, Tamil Nadu reached 49.2% in the GER, as per All India Survey on Higher Education 2018-19 (AISHE).

Citing the recently implemented reservation by Haryana, Ravikumar said, “The demand is being kept by several states and there will be no difficulty with the implementation. We can pass legislation in the Assembly to make it a law like Haryana.”

Another issue to be kept in mind is whether those in the state are qualified and looking for white-collar employment or blue-collar employment. According to a report on blue-collar employment in 2020, Tamil Nadu is home to 15% of migrants, and Chennai ranks third in terms of destination cities for migrants. It was also among the top cities where there was the most reverse migration.

Tamil Nadu currently has 69% reservation in government jobs and educational institutions for Scheduled Castes (15%), Backward Castes (26.5%), Most Backward Castes (20%), and Backward Caste Muslims (3.5%).

Not the first state to do so

The Haryana State Employment Of Local Candidates Act, 2020, which was passed by the state Assembly last year, provided a quota for local people in private sector jobs that pay less than Rs 50,000 each month. Earlier this month, it was notified after the Governor approved it. The Act mandates that anyone employing ten or more persons including societies, trusts, limited liability partnership firms, partnership firms must employ 75% local candidates. 

Jharkhand is the next state likely to pass such a law, with multiple reports stating that the state is looking at reserving 75% of jobs of locals for jobs that pay up to Rs 30,000.

This is a move attempted in the south as well. In 2019, after Chief Minister Jagan Mohan Reddy came to power in Andhra Pradesh, The Andhra Pradesh Employment of Local Candidates in the Industries/Factories Act, 2019, sought to reserve 75% of jobs for locals in all industries —  including units, factories, joint ventures and projects set up under the public-private partnership model in the state. The Act asked existing industries to ensure 75% employment of local candidates within three years from the date of commencement of the Act.

This was challenged in the High Court, with the court observing that such a move may be unconstitutional — on the grounds that the Constitution prohibits discrimination in employment on the ground of place of residence. The law has not been implemented so far because it has been challenged.

A similar push has also been made by Karnataka, with pro-Kannada groups demanding reservation for Kannadigas in the state that has been dubbed the country’s IT capital. Legislation to provide 75% reservation was considered but has now been put on hold.

In 1995, Gujarat passed a government resolution for an 85% reservation in jobs for locals (those who had been in the state for over 15 years) — which was never enforced. As it was a government resolution, there is no provision for the government to penalise companies that don’t follow the rule, and the government has said it cannot take action against these firms.

Maharashtra has also passed similar government resolutions, which were not enforced. Last year, a little before the country went into lockdown due to the pandemic, the state government said it was mulling bringing in a law to reserve 80% jobs to domiciles who have been living in the state for more than 15 years.

In a similar move, the TRS government in Telangana announced a policy in August 2020 to provide additional incentives to firms that hire locals. The state assured GST incentives and concessions in electricity costs for these companies.

Reactions so far

Haryana’s move did not go down well with the industry, with many saying that such a move would adversely affect private investment in the state and would affect industrial development.

In a statement, NASSCOM said that it will impact the business-friendly image of Haryana and be detrimental to Gurugram's growth trajectory as an IT-BPM hub, stating that it will not achieve the intended objective of creating employment. “The growth of the IT-BPM industry is closely intertwined with availability of skilled talent on demand and such restrictions will be limiting for the industry,” it had said.

Anupam Varma, Partner at law firm J Sagar Associates, said that the move casts an onerous stipulation on employers to appoint employees. “The vesting of authority in a state government to decide the qualification, skill, etc. of employees of a private employer will be inimical to the Ease of Doing Business initiatives of the Union government,” he said, and that it impinges on the freedom to practice any occupation or business.

With inputs from Bharathi SP

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