‘Locals only’: Andhra’s dangerous policy

Y S Jagan Mohan Reddy

The Bill passed by the Andhra Pradesh assembly, which provides for 75% job reservation in private industrial units in the state for local candidates, is a wrong and counterproductive step. Andhra is the first state in the country to enact such a restrictive law. The Bill is applicable to all existing and upcoming industrial units, joint ventures, public-private partnerships, etc. The existing units have been given three years to comply with the provision, and if skilled personnel are not available, the units are required to undertake skill development programmes and employ locals. The YSR Congress government of Jaganmohan Reddy, which came to power in the state after the May elections, has struck populist positions on some issues, perhaps under the wrong notion that it would give it the image of the sole protector of the state’s interests. But ultimately populism, especially of the unthinking variety, only hurts the state and its people. 

Since its bifurcation five years ago and the loss of Hyderabad, Andhra Pradesh has been on an industrialisation drive. The demand for special category status was meant to boost the state’s development through industrialisation and other means. But an extreme ‘sons of the soil’ policy in employment will undermine such efforts and the state’s existing industry. Industry should have the freedom to choose labour on the basis of its requirements. The freedom to appoint staff and workers with the requisite skills has been an important factor in the development of industry anywhere in the world, like in the US and China. Even in India, this is one important lesson from the rise of Bengaluru, Mumbai, Delhi and even Andhra’s former capital Hyderabad. Mobility of labour and people across the nation is necessary to give the industry the opportunity to select the best talent and to remain competitive. Some sectors like IT may be badly handicapped by the reservation norm. It may act as a disincentive for investment when the state goes looking for it. It is ironic that Andhra Pradesh, which itself has benefitted from its people migrating to other states and countries for work should have thought of imposing such restrictions within itself. 

The ‘locals only’ policy is also violative of the basic right of all Indian citizens to live and work anywhere in the country. It has set a wrong precedent for other states to follow. The Madhya Pradesh government is planning to adopt a similar law. This is a dangerous trend, economically, socially and for the country’s unity. The country should not be divided into economic and social islands, and migration of people should be considered a positive process. Politicians may gain from these unwise and retrograde policies, but the people will lose. 

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