Hyderabad: The Andhra Pradesh Assembly has passed an AP Employment of Local Candidates in Industries/Factories Bill 2019, providing 75% reservation to local residents, this week. But the bill created such panic among industry players and faced such criticism from the Opposition that Chief Minister Jagan Mohan Reddy had to assure the Assembly that his government would not use the law to scare away investors from the state. What has caused the panic is a provision in the bill that the quota will be applicable to vacancies “at all categories”, implying that the reservation will not be calculated on the whole, but will be there at every level of a company. Another feature which has been objected to by businesses is the provision authorising government officials to monitor the implementation of the reservation, and any failure will attract penalties.
Andhra became the first state in India to earmark a 75% quota for locals in private industries that get any kind of concessions from the government. There have been attempts to ensure jobs for locals in Madhya Pradesh, Karnataka and Maharashtra, but these states have not brought any legislation to this effect. Of course, Andhra Pradesh’s bill is yet to get the assent of the Governor.
Jagan’s assurance comes in the wake of stringent criticism from the Opposition that the Bill will scare away business firms and create problems for the state in the long run. Both the Telugu Desam Party and the Bharatiya Janata Party have expressed doubts over the efficacy of the law and feel that it will shake the confidence of investors. Industry groups too have voiced their concerns about the bill.
The bill is in keeping with the promise Jagan made to the people before the elections. In fact, during his yearlong padayatra he would accuse the Chandrababu Naidu-led TDP government of forcibly taking away land from the public, but not giving jobs to the displaced locals. Jagan had promised at the time to earmark a quota for the locals in the industries in their areas.
The bill, which was passed by the Andhra Pradesh Assembly on Wednesday, made a provision for setting up of skill development centres in all the districts of the state so that the companies could train local candidates. AP Industries Minister, M. Gautham Reddy told the Assembly that these skilling centres would be set up in engineering colleges all over the state.
Reflecting the CM’s view on the issue, Gautham Reddy hinted that the government would not press for the implementation of the quota for the first three years, at least until 2022-23, so that the companies get enough time to train local job aspirants. “There will be waivers and relaxations to the firms that need them; no force will be applied,” he assured the House.
Jagan accused a section of the media of “spreading and planting false stories” that the bill would hit investments in Andhra. “This is far from the truth, as our intention is not to scare away investors, but ensure jobs for local educated candidates. The definition of locals too is clear—those who had lost their land to the firms would be treated as preferred locals,” the CM said.
Some of the industry bodies based in Andhra Pradesh have voiced concern over the possible consequences of the bill, as it restricts their choice of candidates for jobs. “Naturally, the managements would like to keep their choicest people at the higher levels, but a provision in the Bill that stipulates locals at every level becomes an issue for us later,” said a functionary of CII AP chapter on the condition of anonymity.
Several industries and SEZs have come up in Andhra in the last few years and most of them have not been able to give jobs to the locals at the higher levels. For instance, Kia Motors, a South Korean auto giant, set up its plant in Anantapur district of AP, but most of its jobs were filled with outsiders. So is the case with SRI City, a SEZ near Chennai, where the share of locals in jobs is minimal, CII sources said.
According to Jagan, most of the jobs in high-end firms were automated, so they won’t be affected by training the local youth for the remaining jobs. He defended his policy by pointing to the same by US President Donald Trump. “Moreover, training and skilling the locals would help industry in the long run for expansion plans,” said an officer from the AP industries department.