On Wednesday, the Andhra Pradesh Legislative Assembly passed the AP Employment of Local Candidates in Industries/Factories Bill, providing 75% reservation to local youth in industries and factories. This bill also mandates employers to train these local youth in conjunction with the state government and then hire them. This is a significant piece of legislation marking Andhra Pradesh as the first in the country to adopt such a provision of reservation for the private sector.
Legislations like these mark a worrying trend towards a politics of distraction, i.e. a politics of populist measures meant to mask the discontent emanating from the unemployed youths of our country by brandishing them with promises of reserved jobs. Governments usually resort to such appeasement measures in times of distress.
Andhra Pradesh is already reeling from the aftermath of its bifurcation into two separate states. While justified appeals for special status to the centre have gone unheard, short-sighted measures like these do little to alleviate many of the state’s acute problems. This legislation is nothing but a form of localized protectionism which will eventually hinder the state’s growth after the enactment of the same.
Some of the important issues with this legislation that need to be addressed are detailed below.
1) Attracting Investment
Legislations like these which mandate reserved jobs for locals and put the onus on the employer to train locals for it will discourage industries from setting up shop in the state. The government has a hard task at hand convincing employers to invest in a state constrained with so many stipulations and additional training expenditures as a consequence of this bill.
2) Danger Of Extreme Regionalism
This move by the AP government sets a national precedent likely to be followed by some states like Madhya Pradesh and Maharashtra, which have already expressed similar sentiments towards domicile reservations. This would be a dangerous path to tread on and can lead to extreme regionalism within the country.
3) A Short-Sighted Approach
While the AP government’s intentions of seeking to fulfill the aspirations of its electorate are noble, there seems to be an apparent disregard to the long-term consequences of this legislation. Initial support from the electorate seems likely to recede after some years, as the stipulations mandated by this legislation will lead to fewer industries operating within the state. This will hinder employment opportunities for the locals in the years to come and adversely affect Andhra Pradesh’s growth.
While the state’s focus on local employment is commendable, its approach towards the same is not. Industries must be encouraged to employ locals by offering them incentives to do so. Incentives like concessions on land, water and other resources to employers who employ a good percentage of locals in their workforce could be put in place. Moreover, there should be an emphasis on producing skilled local workers so that they can compete effectively with workers from other states.
Bandage solutions like reservations do little to resolve India’s deep rooted job crisis. Efforts to pacify the pervasive angst amongst the unemployed in our country by pandering to their demands of reservation could end up doing more harm than good in the long run.