Andhra employment reservation law: Anti-investment to the core

The Andhra Pradesh legislative assembly has passed the controversial AP Employment of Local Candidates in Industries and Factories Bill, 2019, which reserves 75% of the total jobs for locals.  

It covers all industries, factories, joint venture units and projects taken up under public-private partnership (PPP) initiatives in Andhra Pradesh. The Bill gives a three-year period from the commencement of the Act for starting compliance.

This was a poll promise made by Andhra Pradesh Chief Minister Jagan Mohan Reddy during his padyatra across the state. One of the key promises made during this march was job reservations for local youth in the private sector.  

Andhra Pradesh thus has the dubious distinction of being the first state in India to start this reservation. The government claims that the locals are losing their land to the industries and, therefore, need an assured livelihood for sustenance. This law will help the locals get that assured livelihood.

With Jagan Mohan Reddy passing the Bill in the Andhra assembly, Madhya Pradesh Chief Minister Kamal Nath too is mulling job reservations up to 70% for local youth. He has further stated that incentives that the government provides to the industry can only be availed if they comply with this specific requirement.   

The questions is, whether other states will follow suit and if this will be beneficial for the country as a whole. Will the economy flourish under such laws? What happens if a specific skill needed is unavailable in a given area? Will this law violate fundamental rights enshrined in the Constitution of India? We will try to find answers to these and other questions which may crop up in the days ahead.  

There could be a shortage of specific skill sets in an area. The government has planned to take the help of local companies to train people. But only time will tell if this helps serve the purpose and address the dire shortage of specific skill sets.  

The state government also feels that this is a pro-industry move and the law has provided for exceptions. However, critics say this might hamper investment in the state as investors will tend to put money in states that don’t have such restrictions as, ultimately, it will hamper their company’s growth.  

The country should follow a common objective and cannot be seen to be operating under different laws in different states. If each state starts adopting similar laws, then the mobility of skilled resources will be severely restrained.  

In a country like India, which has a diverse culture, such mobility of resources cannot be restricted. Employees tend to adopt  a variety  of cultures within the country and a cosmopolitan India is favoured by most citizens.  

Salary levels will fall if the mobility of resources are restricted. The unity in diversity concept will be defeated if we tend to confine the mobility of resources to a particular state. Laws such as these will affect economic growth in the country. Hence the government should take steps to ensure that there is migration of employees across the country.  

The law, which makes job reservation for locals mandatory, is also a gross violation of the fundamental rights enshrined in the Constitution, which guarantees equality of status and opportunity for all.  

Article 14, the Right to Equality, states that no one can deny any person equality before law and that there should be equal protection of laws within the territory of India. Article 15 says that there shall be no discrimination against any citizen of India on grounds of religion, race, caste, sex and place of birth.  

Article 16(1) points out that there shall be equality of opportunity for all citizens with respect to employment in any office. Citizens shall not be discriminated on the basis of place of birth when being offered employment.  

It is also important to note the exceptions under these Articles. Under the Constitution, the exception to Article 14 is given in sub-sections 3 and 4. Sub-section 3 says that the State can make special provisions for women and children. Similarly, sub-section 4 states that the State can make any special provision for the advancement of socially and educationally backward classes of citizens or for Scheduled Castes and Scheduled Tribes. Similarly, exceptions are provided for in Article 15 and 16.  

It is critical to note that the Bill passed by the Andhra Pradesh assembly does not fit into any of the exceptions to Article 14, 15 or 16.  

Similarly, it is important to remember that a Constitution amendment Bill can be introduced in either house of Parliament. But the same amendment Bill of the Constitution cannot be introduced in any state legislature.

The reservation for locals by the Andhra Pradesh government is a clear violation of the Constitution and can be challenged in the Supreme Court. We can only wait to see how this is taken up further.  

If this law is not challenged, then it will set a bad precedent by encouraging other states to follow suit and the country will become a playground for discrimination. In the process, the Constitution will be defeated. This draconian law seems to be aimed more at political mileage and needs to be scrapped at the earliest. 

The author is a senior lawyer. Views expressed are Personal