India is a federal union of 36 entities comprising 28 states and 8 union territories. In 2014, Make in India was an initiative by the Government of India to make and encourage companies to develop, manufacture and assemble products made in India. The policy approach was to create a favorable environment for investments, efficient infrastructure, and ease to operate. One of the biggest challenges for industries is the unfavorable labour laws, and that's why the government has introduced the new wage code 2020. The purpose was uniformity and simplification.
The 36 entities of our country try to drive their agenda for their political interest rather than the larger interest of the country or state residents. A recent example is that the Haryana government has ordered that the law under the Haryana State Employment of Local Candidates Bill states 75% reservation for locals in private sector jobs, societies, trusts, limited liability partnership firms into force from January 15, 2022. The salient points of the law are:
- The law provides for 75% reservation in private sector jobs to those with a Haryana resident/domicile certificate.
- Jobs with a gross monthly salary of not more than ₹30,000 will be up for hiring local candidates.
- The law will be applicable for 10 years.
The act will be applicable to employers of private sector companies, societies, trusts, limited liability partnership firms, partnership firms, and anyone who employs 10 or more persons in Haryana.
All the employers will be required to register their data and the compensation of the employees to the labour department website.
The government's rationale of increasing employment opportunities to the state's local residents through such laws is a deterrent to the overall state growth. The industry has always been suffering due to the talent war due to the lack of skilled resources, and the recent great reshuffle spree has made it more challenging for them. The new reservation act is like a nail in the coffin, and the organizations will start shifting the jobs to other states to survive.
The government is facing a lot of criticism from the private sector, and it will adversely impact the state as well as organizations:
- The government interference in the private sector will kill the meritocracy culture, and it will directly impact the productivity and growth of the organization
- The new act will hit small and medium enterprises adversely.
- The state government doesn't have a supporting infrastructure or education system to provide skilled people to the private organization, and again it will impact the quality of product /service.
- Many of the organizations will move out of the state, impacting the new investment, real estate, and state taxes.
The government has introduced a new slab of INR 30,000 gross per month without any rationale; neither it synced with minimum wage nor ESIC guidelines. Therefore, a new register, a new audit, and one more license increase another regulatory framework for the organizations.
The biggest question arises all these 36 entities of the Republic of India have been introducing something that is breaking our system. Due to our broken system, our global ranking in GDP and Human Development Index (HDI) is 122nd and 131st, respectively. Most importantly, we are challenging the ethos of the Republic of India, which is "equality among equals." Every person, who lives within the territory of India, has equal rights before the law.
It's time for the government to think differently and work with private organizations for the next two years to set up talent development centers like Modeling career centre and build more robust governance. The objective should be making residents more competitive to be employable anywhere in our "one country."