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Source: The post on Domicile-based Private Sector Reservation has been created based on the article “Parochial law” published in “The Hindu” on 22nd November 2023.
UPSC Syllabus Topic: GS Paper 2 Indian Polity – Indian Constitution.
GS Paper 1 Indian Society – Regionalism.
News: The article discusses the reasoning provided by the Punjab and Haryana High Court in quashing domicile-based private sector reservation in Haryana.
Recently, the Punjab and Haryana High Court quashed the Haryana State government legislation providing 75% reservation to State domiciles in the private sector in jobs with a monthly salary of less than ₹30,000.
| What is Domicile? The term ‘Domicile’ is not defined in the Constitution. Ordinarily, it means a permanent home or place where a person resides with the intention of remaining there for an indefinite period. Domicile is not the same thing as residence. In the case of Haryana’s private sector reservation law, a local has been defined under the law as anyone domiciled in the State of Haryana. As per the act, only those who have resided in the State for the past 5 years would be considered local candidates.
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What are the arguments against domicile-based private sector reservation provided by the Court?
- Legislative Overreach: The court stated that it was beyond the purview of the State to legislate on the issue and restrict private employers from recruiting from the open market.
- Violates Right to Equality: It also held that the Act was violative of equality guaranteed under Article 14. By allotting 75% reservation for “locals”, the Act goes against the rights of citizens of the rest of the country.
- Violates Right to Freedom: It said the Act violates freedom guaranteed under Article 19 by imposing unreasonable restrictions on workers’ right to move freely throughout the territory of India.
- Slippery Slope: The Court held that such acts could lead to other States coming up with similar enactments. This would lead to putting up of protectionist walls throughout India. Other States like Andhra Pradesh and Jharkhand have also enacted similar legislation.
- Lead to Inspector Raj: The court termed the requirements on private employers stipulated in the Act as similar to those under “Inspector Raj” (over regulation/ supervision by the Government).
What are the issues with domicile-based private sector reservation?
- Negatively affect the Economy: Workers move to other States seeking job opportunities that are relevant to their skills and abilities. The shortage of qualified workers in a state may impact businesses and thus the economy of the entire country.
- Discourage Investment: Compulsions to employ decreases the competitiveness of companies. Apart from that, such measures directly discourage investment potential in a state by creating compliance burden.
- Threat to Unity: This step would create friction among locals and non-locals in the implementing states. This will shake the fundamentals of India’s Unity in Diversity in the long run.
- Hamper Inclusive Growth: If States impose restrictions that prevent job seekers from other States from accessing opportunities, citizens of poorer States will have to make a living within their own regions. This will lead to rising inequalities.
What is the reasoning behind Haryana government’s decision of providing domicile-based private sector reservation?
Demand by the Locals: There is resentment among locals in better-off States over their jobs being taken up by “migrant” workers. This has led to their governments coming up with ill-thought-out protectionist measures.
Private Sector’s Preference for Migrant Labour: Private employers often exploit the migrant labour market as such workers tend to work long hours for low wages with little or no social protection and benefits. The private sector prefers them over local workers with better bargaining power.
Addressing Unemployment and Economic Disparities: Introducing reservation might be an attempt to address high unemployment rates among certain communities or regions. Especially in Haryana which has one of the highest rates of unemployment (9%) as per PLFS 2021-22.
What should be done?
Uphold Uniform Labour Rights: States should ensure that migrant workers enjoy basic labour rights, thereby creating a level playing field for all workers (local as well as migrants) and eliminating preference for migrant labour. This will also protect the migrant labours from exploitation.
Apart from this, the State govt’s focus should be on: Ease of Doing Business Reforms to attract industries, Skill Development Programs, Infrastructure Development, Education Reforms and Rural Development.
Question for practice:
Domicile-based private sector reservations stand against the values enshrined in Part III of the Constitution. Analyse.
