The Haryana government is considering a Bill that provides for 75 per cent reservation to the residents of the state. This article discusses the challenge such policies poses.

Domicile-based preferential policies on rise

• The Haryana government’s State Employment of Local Candidates Bill 2020 reserves 75 per cent of new jobs in private establishments for Haryana residents.
• Andhra Pradesh has mandated 75 per cent reservation for locals.
• Karnataka is considering reserving all blue-collar jobs for locals.
• Madhya Pradesh has announced that public employment in the state be reserved for state residents.

Constitutionality of such policies

• The Constitution prohibits discrimination based on place of birth.
• The right to move freely in the country and reside and settle in any part of it, the right to carry out any trade or profession, are all established rights.
• Article 16(3) does, in principle, enable Parliament [ not state legislature] to provide for domicile-based preferential treatment in public employment.

Judicial scrutiny

• The constitutionality of domicile-based employment preferences (unlike preferences in education) has never been frontally tested.
• But almost all the existing case law that impinges on the matter clearly indicates such laws are unconstitutional.
• In Pradeep Jain vs Union of India, the court had indicated this direction; in Kailash Chandra Sharma vs State of Rajasthan, the court had warned against parochialism.
• The Andhra Pradesh Bill is sub judice in the high court.

Issues with the policies

• The Supreme Court will hopefully rule on the constitutionality of the  Haryana government’s Bill.
• But the Bill has ramifications beyond constitutionality.
• First, because this kind of constitutional cynicism is now not an exception but has become a contagion.
• Second, even if the Bill is struck down, such a high wire act is meant to fuel the flames of localism.
• Third, the Bill now exposes the bad faith of political parties on private sector reservation more generally.
• Fourth, these bills will open up a new form of competitive ethnic politics.
• It is odd that a state like Haryana which has benefitted from being part of a cosmopolitan zone like NCR should unilaterally impose reservations.
• Fifth, there is patent class discrimination: If you are rich, privileged or highly skilled, there are no entry barriers in accessing any labour market.
• But we shall put entry barriers on lower skilled migrants; our own internal version of an H-1B visa.
• The greatest damage the Bill does is to increase the discretionary power of the state, almost taking us back to a license permit raj, where companies will have to bargain, or worse, bribe the state for exemptions.
• This is the antithesis of regulatory reform.

Consider the question “There have been growing tendencies among the states to pursue domicile-based preferential policies. What are the issues related to such policies?”

Conclusion

But the fact that states feel the need to enact these bills is an indictment of the economy as a whole: They suggest a pessimism about both education and job creation. So we have returned to a world of zero sum thinking.

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