In past couple of years some state governments have announced reservation for local residents in private sector jobs. Some other states are also considering to implement similar provisions. Given that the word “reservation” itself is not liked by a large section of Indian population due to legacy reasons, this trend has evoked strong reactions from the businesses and job seekers from other state who fear losing out to the local population in these states.
Many issues like, Right to
Equality, likely productivity loss due to lack of competent people, likely
higher wage cost due to limited supply of qualified people within particular
state, etc., have been raised by the concerned people. Concerns have been
raised about flight of businesses to other states, further worsening the
regional inequalities.
In my view, it is a very
good idea, of implemented pragmatically. If the state governments work with the
private entrepreneurs to develop the education, skill and training ecosystem in
their respective states and provide fiscal incentives to businesses for giving
preference to local people for their incremental job requirements, this
stipulation could materially promote the regional equality and employability of
youth. This shall also reduce the cost for businesses as they could move away
from expensive concentrations like NCR, Bengaluru, Mumbai, Chennai, Hyderabad
and hire good people at relatively lower cost. The investments being made in
transportation infrastructure, Bullet Train, Economic Corridors, Dedicated
Freight Corridors, Regional Airports etc. shall support efficient relocation of
businesses to hinterlands.
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