THE ECONOMIC DEVELOPMENT

1. NEW PAYMENT SYSTEM FOR FEATURE PHONE USERS:” UPI123PAY”

THE CONTEXT: The Reserve Bank of India, launched the country’s most famous unified payments interface (UPI) service for feature phones. Termed as UPI123PAY, the service will allow 40 crore feature phone users across India to access the payment service.

THE EXPLANATION:

• As of now,UPI was available only across all smartphones in India but with the latest move, feature phone users will also be allowed to send and receive payments.
• The UPI123Pay service is a three-step method to initiate and execute services for users, which will work on phones which do not have an option for internet connection. Presently there are an estimated 40 crore mobile phone users who possess feature phones.
• These users will now be able to undertake a host of transactions by 1. calling an IVR (interactive voice response) number, 2. app functionality in feature phones, 3. missed call-based approach and 4. also proximity sound-based payments.
• Users will be able to make payments to their friends and family, pay their utility bills, recharge FASTags, pay mobile bills and also check their account balances, the central bank said, adding customers will also be able to link bank accounts, set or change UPI PINs.

2. CABINET APPROVES NATIONAL LAND MONETIZATION CORPORATION

THE CONTEXT: The Union Cabinet, chaired by Prime Minister has approved the setting up National Land Monetization Corporation (NLMC),it will be wholly owned Government of India company with an initial authorized share capital of Rs 5000 crore and paid-up share capital of Rs 150 crore.

THE EXPLANATION:

• NLMC will undertake monetization of surplus land and building assets of Central Public Sector Enterprises (CPSEs) and other Government agencies. The proposal is in pursuance of the Budget Announcement for 2021-22.

SIGNIFICANCE?

• At present, CPSEs hold considerable surplus, unused and under used non-core assets in the nature of land and buildings. For CPSEs undergoing strategic disinvestment or closure, monetization of these surplus land and non-core assets is important to unlock their value.
• NLMC will support and undertake monetization of these assets. This will also enable productive utilization of these under-utilized assets to trigger private sector investments, new economic activities, boost local economy and generate financial resources for economic and social infrastructure.
• NLMC is also expected to own, hold, manage and monetize surplus land and building assets of CPSEs under closure and the surplus non-core land assets of Government owned CPSEs under strategic disinvestment.
• Efficiency:NLMC will undertake surplus land asset monetization as an agency function. It is expected that NLMC will act as a repository of best practices in land monetization, assist and provide technical advice to Government in implementation of asset monetization programme.
• Technical Experts: NLMC will have necessary technical expertise to professionally manage and monetize land assets on behalf of CPSEs and other Government agencies. The Board of Directors of NLMC will comprise senior Central Government officers and eminent experts to enable professional operations and management of the company.  The Chairman, non-Government Directors of the NLMC will be appointed through a merit-based selection process.

NLMC will be a lean organization with minimal full time staff, hired directly from the market on contract basis.  Flexibility will be provided to the Board of NLMC to hire, pay and retain experienced professionals from the private sector.

• Nodal Agency: Department of Public Enterprise, Ministry of Finance, will set up the company and act as its administrative ministry.

3. CABINET NOD FOR MINING NEW MINERALS

THE CONTEXT: The Union Cabinet, chaired by Prime Minister has approved the proposal of the Ministry of Mines for amendment of Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to as ‘the Act’) for specifying the rate of royalty in respect of Glauconite, Potash, Emerald, Platinum Group of Metals (PGM), Andalusite, Sillimanite and Molybdenum.

THE EXPLANATION:

• The approval would ensure auction of mineral blocks in respect of Glauconite, Potash, Emerald, Platinum Group of Metals, Andalusite and Molybdenum thereby reducing import of these minerals, generating empowerment opportunity in the mining sector as well as manufacturing sector which will help in ensuring inclusive growth of a large section of the society.
• The approval will lead to import substitution in respect of many important minerals for the economy of the country thereby saving valuable forex reserves. It will reduce country’s foreign dependency through the local production of minerals.
• The Act was amended in 2015 to usher in new regime of granting mineral concessions through auction to ensure transparency and non-discrimination in allocation of mineral wealth of the country.
• To give further impetus to the mineral sector, the Act has been further amended in 2021. Under the reforms, the Government has given major boost to auction of mineral blocks, increasing production, improving ease   of   doing   business   in   the   country   and   increasing contribution of mineral production to Gross Domestic Product (GDP).

What is the Need?

In the last 4-5 years, Central Agencies like Geological Survey of India and Mineral Exploration Corporation Ltd. have carried out exploration and handed over reports to the State Governments of several blocks of minerals which are hitherto not mined in the country.

 When it comes to minerals such as Glauconite/ Potash, Emerald, Platinum Group of Metals (PGM), Andalusite and Molybdenum, the country is totally dependent on import of these minerals for meeting our requirements.

As a major step towards mineral self-sufficiency, many State Governments have identified such mineral blocks for auction. However, the rate of royalty for these minerals were not separately provided and was not appropriate for giving impetus to mining of these minerals.

Minerals like Glauconite and Potash are used as fertilizer in agriculture. Platinum Group of Metals (PGM) are high value metal used in various industries and new innovative applications. Minerals like Andalusite, molybdenum are vital minerals used in industrial applications.

Value Addition:

The Mines and Minerals (Development and Regulation) Amendment Bill, 2021

Highlights:

• Removal of restriction on end-use of minerals: The Act empowers the central government to reserve any mine (other than coal, lignite, and atomic minerals) to be leased through an auction for a particular end-use (such as iron ore mine for a steel plant). Such mines are known as captive mines.  The Bill provides that no mine will be reserved for particular end-use.
• Sale of minerals by captive mines: The Bill provides that captive mines (other than atomic minerals) may sell up to 50% of their annual mineral production in the open market after meeting their own needs.   The central government may increase this threshold through a notification.  The lessee will have to pay additional charges for mineral sold in the open market.
• Auction by the central government in certain cases: Under the Act, states conduct the auction of mineral concessions (other than coal, lignite, and atomic minerals). Mineral concessions include mining lease and prospecting license-cum-mining lease.  The Bill empowers the central government to specify a time period for completion of the auction process in consultation with the state government.  If the state government is unable to complete the auction process within this period, the auctions may be conducted by the central government.
• National Mineral Exploration Trust (NMET): The Bill provides for the constitution of a Statutory body named the National Mineral Exploration Trust (NMET). It will see the overall functioning of the mining sector.
• National Mineral Index(NMI): The Bill proposes to introduce an index-based mechanism by developing a National Mineral Index(NMI). Various statutory payments and future auctions can use the National Mineral Index in the future.

4. THE INLAND WATER SYSTEM FOR THE NORTHEAST

THE CONTEXT: The Indian government has undertaken the ambitious Jal Marg Vikas Project (JMVP) with an investment of about Rs 4,600 crore for the capacity augmentation of NW-1 (Ganga) for safe and sustainable movement of vessels of up to 2000 tonnes. After the MV Lal Bahadur Shastri’s journey, Inland Waterway Authority of India is looking to run regular scheduled services on these waterway routes.

THE EXPLANATION:

• The docking of the vessel carrying 200 MT of food grains for the FCI has rekindled hope for the inland water transport system which the landlocked northeast depended on heavily before India’s independence in 1947.
• It passed through Bhagalpur, Manihari, Sahibganj, Farakka, Tribeni, Kolkata, Haldia, Hemnagar in India, Khulna, Narayanganj, Sirajganj and Chilmari in Bangladesh and again to India on National Waterway-2 (NW2, river Brahmaputra) through Dhubri and Jogighopa covering 2,350 km.

How did the water cargo service through Bangladesh come about?

• The resumption of cargo transport service through the waterways in Bangladesh has come at a cost since the Protocol on Inland Water Transit and Trade was signed between the two countries.
• India has invested 80% of ₹305.84 crore to improve the navigability of the two stretches of the IBP (Indo-Bangladesh Protocol) routes — Sirajganj-Daikhowa and Ashuganj-Zakiganj in Bangladesh.

Indo-Bangladesh Protocol

The Inland Water Transit & Trade exists between India and Bangladesh under which inland vessels of one country can transit through the specified routes of the other country.

The existing protocol routes are:

• Kolkata-Pandu-Kolkata
• Kolkata-Karimganj – Kolkata
• Rajshahi-Dhulian-Rajshahi
• Pandu-Karimganj-Pandu

For inter-country trade, certain ports of call have been designated in each country.

These Ports of call generally act as an intermediate stops for a ship on its scheduled journey for unloading and loading of cargo or taking on supplies or fuel and maintenance and refurbishing is carried out.

These are:

India

• Haldia (West Bengal)
• Kolkata (West Bengal)
• Pandu (Assam)
• Karimganj (Assam)
• Silghat (Assam)

Bangladesh

• Narayanganj
• Khulna
• Mongla
• Sirajganj
• Ashuganj

Significance:

• The waterways will not only remove geographical hindrance but also provide an economical and convenient transportation for the businesses and people of the region.
• In line with India’s “Act East” policy, the Indian Ministry of Ports, Shipping and Waterways has taken up several infrastructure projects on National Waterway-1, IndoBangladesh Protocol route and NW2, through the Inland Waterways Authority of India (IWAI) to improve connectivity with the Northeastern region through waterways via Bangladesh.

National Waterway:

In 2016, the government notified 111 inland waterways as National Waterways of India under the National Waterways Act, 2016. Of these, 13 National Waterways are operational for shipping and navigation and cargo/passenger vessels.

The Inland Waterways Authority of India under the Ministry of Shipping is developing the National Waterways for commercial navigation, including with assistance from the World Bank.

THE GOVERNMENT SCHEMES/INITIATIVES IN NEWS

5. GLOBAL CENTRE FOR TRADITIONAL MEDICINE IN INDIA

THE CONTEXT: The Union Cabinet, chaired by Prime Minister has approved the establishment of the WHO Global Centre for Traditional Medicine (WHO GCTM) in Jamnagar, Gujarat by signing a Host Country agreement between the Government of India and the World Health Organization (WHO).

THE EXPLANATION:

The WHO GCTM will be established in Jamnagar under the Ministry of AYUSH.  This would be the first and only global outposted Centre (office) for traditional medicine across the globe.

Benefits:

• To position AYUSH systems across the globe
• To provide leadership on global health matters pertaining to traditional medicine.
• To ensure quality, safety and efficacy, accessibility and rational use of traditional medicine.
• To develop norms, standards, and guidelines in relevant technical areas, tools and methodologies, for collecting data undertaking analytics, and assess impact. Envisage WHO TM Informatics centre creating a collaborative of existing TM Data banks, virtual libraries, and academic and research institutes.
• To develop specific capacity building and training programmes in the areas of relevance to the objectives and conduct training programmes in campus, residential, or web-based, and through partnerships with the WHO Academy and other strategic partners.

The WHO GCTM would provide leadership on all global health matters related to traditional medicine as well as extend support to member countries in shaping various policies related to traditional medicine research, practices and public health.

The Ministry of AYUSH has collaborated with WHO on many fronts including developing benchmarks documents on training and practice of Ayurveda and Unani System, introducing a second module in the Traditional Medicine Chapter of the International classification of Diseases-11, developing apps like M-yoga, supporting the work of International Pharmacopeia of Herbal Medicine (IPHM) and other research studies etc.

 Significance:

• Traditional medicine is a key pillar of health care delivery systems and plays a crucial role in maintaining good health and well-being. Safe and effective traditional medicine will play a significant role in ensuring all people have access to quality essential health care services and safe, effective and affordable essential medicines as the world approach the ten-year milestone for Sustainable Development Goals in 2030.
• The WHO-GCTM will identify various challenges faced by the countries in regulating, integrating and further positioning Traditional Medicine in respective countries.

THE PRELIMS PRACTICE QUESTIONS

QUESTIONS OF THE DAY 10^TH MARCH  2022

Q. Which of the following pairs is/are incorrectly matched?

1. National Waterway 1 – Ganga River
2. National Waterway 3 – East Coast Canal
3. National Waterway 5 – West Coast Canal

Select the correct answer using the code given below:

a) 1 only

b) 1 and 2 only

c) 3 only

d) 2 and 3 only

ANSWER FOR 9^th MARCH 2022

Q1. Answer: D

Explanation:

Both the statements are correct

SARKARIA COMMISSSION

Recommendations on Appointment of Governor:

• should be an eminent person.
• must be a person from outside the State.
• not have participated in active politics at least for some time before his appointment.
• he should be a detached person and not too intimately connected with the local politics of the State.
• he should be appointed in consultation with the Chief Minister of the State, Vice-President of India and the Speaker of the Lok Sabha.
• His tenure of office must be guaranteed and should not be disturbed except for extremely compelling reasons and if any action is to be taken against him, he must be given a reasonable opportunity for showing cause against the grounds on which he is sought to be removed. In case of such termination or resignation of the Governor, the Government should lay before both the Houses of Parliament a statement explaining the circumstances leading to such removal or resignation, as the case may be.
• After demitting his office, the person appointed as Governor should not be eligible for any other appointment or office of profit under the Union or a State Government except for a second term as Governor or election as Vice-President or President of India, as the case may be and
• At the end of his tenure, reasonable post-retirement benefits should be provided.
• The Punchhi commission recommended that Governor shall have fixed tenure.

1. Elective identity, religion and gender READ MORE
2. Culture and Behaviour READ MORE

1. Water management needs a hydro-social approach READ MORE   
2. Is eco-shaming enough to save the planet? READ MORE

1. Skewed social mindset: Break silence over rape to deter crime & heal victims READ MORE
2. Women as Change Agents in Corporate India READ MORE
3. India’s gender empowerment enigma READ MORE

1. Governors must be fair in inviting CMs READ MORE
2. Federalism And The Idea Of Regionalism READ MORE
3. Call for Indianisation is a fallacy, if not a fraud on the Constitution READ MORE

(Newspapers, PIB and other important sources)

Prelim and Main

1. UPI123Pay: Payment solution for feature phone users READ MORE
2. Reviving the inland water transport system for the Northeast READ MORE
3. Shackleton’s ship ‘Endurance’ found beneath Antarctic ice, 100 years on READ MORE
4. National Land Monetization corporation: Cabinet clears agency to monetise Govt land READ MORE
5. US man who got first pig heart transplant dies after 2 months READ MORE
6. DCGI gives emergency use nod to SII’s Covovax for 12-17 years age group READ MORE
7. Cabinet approves establishment of WHO Global Centre for Traditional Medicine in India READ MORE
8. More than 75% of Amazon rainforest near tipping point, may transform into dry savanna: Study READ MORE

Main Exam    

GS Paper- 1

1. Skewed social mindset: Break silence over rape to deter crime & heal victims READ MORE
2. Women as Change Agents in Corporate India READ MORE
3. India’s gender empowerment enigma READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

1. Governors must be fair in inviting CMs READ MORE
2. Federalism And The Idea Of Regionalism READ MORE
3. Call for Indianisation is a fallacy, if not a fraud on the Constitution READ MORE

INTERNATIONAL ISSUES

1. India should keep door open for talks with Pak READ MORE
2. INDIA’S PRUDENT DIPLOMACY IN WAR READ MORE
3. Five Reasons Why the Ukraine War Will Adversely Impact India-UK Ties READ MORE

GS Paper- 3

ECONOMIC DEVELOPMENT

1. Our country is caught between a rock and a hard place READ MORE
2. Corruption’s consequences READ MORE
3. To reduce oil import, focus on renewables READ MORE

ENVIRONMENT AND ECOLOGY  

1. Water management needs a hydro-social approach READ MORE   
2. Is eco-shaming enough to save the planet? READ MORE

GS Paper- 4

ETHICS EXAMPLES AND CASE STUDY

1. Elective identity, religion and gender READ MORE
2. Culture and Behaviour READ MORE

Questions for the MAIN exam

1. Discuss the issues associated with efficient freshwater management in India.
2. ‘The call for Indianization of India’s legal system is evidently a fallacy and does not consist in a call to constitutionalize despite the false pretext’. Discuss the statement in the light of the recent call for the Indianization of India’s legal system.
3. How far do you agree with this view that to address the issue of antinomies in Indian federalism, there is a need to give more autonomy to the state governments? Analyse your view.

QUOTATIONS AND CAPTIONS

• Wherever the art of medicine is loved, there is also a love of humanity.
• A legal system is a department of values. So is the case with ideology, ethics and morality, including political morality. Any particular orientation or identity of a legal system or constitutional system depends on the values and ideology on which it is built and being developed.
• The call for Indianization of India’s legal system is evidently a fallacy and does not consist in a call to constitutionalize despite the false pretext.
• Faith and belief, emotions and attitudes take centre-stage, which is why intellectual, emotional and spiritual factors throughout our growing years and after, play significant roles.
• Strong and autonomous state governments can offset the antinomies that Indian federalism is in the habit of reproducing.
• The strong and autonomous state governments, to the possible extent that federalism permits, can offset the antinomies that Indian federalism is in the habit of reproducing, such as the misuse of extraordinary powers of Parliament.
• In federalism it is important to share the federal powers—precisely for shared-rule and self-rule—but it is all the more important to use those powers for achieving constitutional goals and morality and also for holding out together the beautiful Indian diversity.
• India and the UK face an unprecedented trust deficit in light of Russia’s invasion of Ukraine. As Russia’s war efforts expand, so, too, will this deficit widen.
• The troubling resistance to criminalising marital rape neatly encapsulates the concerns of a violently patriarchal society.
• Governors often exercise discretion in deciding who to invite to form the government, especially in the case of close elections. They must be fair and judicious, and discharge their duty without fear or favour.
• A hybrid water management system is necessary, where the individual, a community and society have definite roles in the value chain. The challenge is not to be techno-centric but anthropogenic.

50-WORD TALK

• Russia and Ukraine will Thursday begin high-level talks, the first since their war. Prime Minister Volodymyr Zelenskyy says Ukraine won’t join NATO. Russia claims it will not topple his regime. The missteps of the two countries caused suffering for their people, and the world. Even belated wisdom must be welcomed.
• Consensus is claimed in Pakistan between elected govt and the army over the National Security Policy though the goal of peace with neighbour contradicts the military objective of India being an existential threat. Imran Khan has pontificated about Pakistan drawing geo-economic benefits from its geo-strategic location. Army Chief Bajwa has also spoken about burying the past. But strategic ambiguity prevails over the demand for rolling back Article 370 before talks.

Things to Remember:

• For prelims-related news try to understand the context of the news and relate with its concepts so that it will be easier for you to answer (or eliminate) from given options.
• Whenever any international place will be in news, you should do map work (marking those areas in maps and also exploring other geographical locations nearby including mountains, rivers, etc. same applies to the national places.)
• For economy-related news (banking, agriculture, etc.) you should focus on terms and how these are related to various economic aspects, for example, if inflation has been mentioned, try to relate with prevailing price rises, shortage of essential supplies, banking rates, etc.
• For main exam-related topics, you should focus on the various dimensions of the given topic, the most important topics which occur frequently and are important from the mains point of view will be covered in ED.
• Try to use the given content in your answer. Regular use of this content will bring more enrichment to your writing.

[WpProQuiz 177]

THE CONTEXT: The Haryana government has recently brought in the Haryana State Employment of Local Candidates Act 2020, which provides for reservation in certain categories of private sector employment. The law has been subject to critical judicial scrutiny while it is also objected to by industry associations. Earlier, states like Andhra Pradesh have also provided for such reservations in the private sector. In this write-up, we examine these issues in detail.

THE SALIENT FEATURES OF THE HARYANA STATE EMPLOYMENT OF LOCAL CANDIDATES ACT 2020

RESERVATION IN THE PRIVATE SECTOR:

• On January 15, 2022, the government notified the “Haryana State Employment of Local Candidates Act, 2020”.
• The law makes it mandatory for all employers in the state to reserve 75 percent of the jobs offering a monthly gross salary or wages of up to ₹30,000 for candidates “domiciled in the state of Haryana”.
• The state government also relaxed the residency requirement from 15 to five years for a person to get a bona fide resident certificate in the state to provide some flexibility to the private companies in hiring.
• This law applies to new recruitments and will not come into effect from retrospective effect.
  Exclusion has been made for Central and State governments and entities owned by them.

APPLICATION OF THE ACT:

• The Act applies to all the ‘Employers’ in the state.
• This includes all companies, partnership firms, societies, trusts, limited liability partnership firms and.
• Any person or employer that employs 10 or more employees in any trade, business, manufacturing unit, or enterprise.
• The law provides for fines between ₹10,000 and ₹2 lakh for violation of the provisions.

SUNSET CLAUSE:

• The law will have a sunset clause and will cease after ten years of enactment.

MANDATORY REGISTRATION:

• All employers in the state have been directed to register their existing employees garnering a monthly pay of not exceeding ₹30,000 on the designated portal within three months and can now initiate any new recruitment in this pay bracket only after completing this process.

ENSURING COMPLIANCE:

• All employers will also need to file a quarterly report on the government’s designated portal providing information regarding the local candidates employed and appointed in this pay bracket.
• These reports would be subject to scrutiny by designated officials, who will be empowered to ask the employer to furnish the documents or conduct verification.

PROVISION OF EXEMPTION:

• The government may exempt certain industries by notification and has so far exempted new start-ups and new Information Technology Enabled Services (ITES) companies, as well as short-term employment, farm labor, domestic work, and promotions and transfers within the state.
• There is a provision also for an exemption if an adequate number of local candidates of desired skill or proficiency are not available for a particular category of jobs. But the government can accept or reject the claim or direct the company to train local candidates in the desired skills.

THE ARGUMENTS OF THE GOVERNMENT IN FAVOUR OF THE ACT

• One of the key arguments of the government has been that urbanization and industrialization have led to substantial land acquisition in the state, which has historically been an agrarian society.
• The government believes this has led to a reduction in employment opportunities in the agriculture sector for the local youth and the law will help create new job opportunities for them and also encourage skill development.
• It also believes it will reduce the dependency of employers in Haryana on migrant workers and improve their efficiencies.
• The private jobs reservation was part of the election manifesto of the alliance partner in the coalition government in the state.
• Social justice is an important aim of any welfare state, and the law is enacted in this direction.
• According to the state, the Act makes a valid classification by grouping local candidates who are unemployed and domiciled in Haryana, irrespective of their caste, creed, sex, place of origin or place of birth and their social status, to achieve the object of providing suitable employment in the private sector.
• It says that the Act makes a “geographical classification” based on domicile and in furtherance of the fundamental right to life, livelihoods, and health conditions of persons domiciled in the state.
• It claimed that there is no restraint against a state legislature from creating geographical classification to incentivize and grant concessions to citizens or industrial units.

A CRITICAL SCRUTINY OF THE ACT

CONCERNS OF THE INDUSTRY:

• Industry bodies have raised concerns about the implementation of a law that is discriminatory and against the concept of one nation. They believe this will substantially increase their compliance burden, especially on small and micro-enterprises.
• One of the key concerns of the industry is also whether enough workers will be even available for jobs in trades that are dominated by workers from certain clusters of the country, such as construction and manufacturing as well as in the services sector such as hospitality and retail.
• Almost all of the employees in MSMEs fell under the ₹30,000 pay bracket. Such industries hire and let go of workers as per demand, it would not always be possible to find local employees when required.

IMPACT ON INVESTMENT CLIMATE:

• It is said that this will impact the business-friendly image of the state’s ease of doing business rankings and may also discourage fresh investments by industries.
• The Federation of Indian Chambers of Commerce and Industry (FICCI) has said that the law would “spell disaster” for private investment in the state and impede industrial development.
• This law is also held to be going back to Inspector Raj prevalent in the pre-1990 LPG era.

STATE INTERVENTION IN THE MARKET:

• Any rule which tries to artificially control the internal functioning of a private enterprise against the market will affect its competitiveness in the market and hurt its productivity.
• Minimal government interference is usually an indicator of a mature economy; in this case, that appears to have gone out of the window and is also against “Minimum Government and Maximum Governance”.

CHANCES OF RELOCATION OF INDUSTRIES:

• If companies in Haryana have difficulty finding skilled resources as a result of a law, they may be forced to relocate to other cities due to insufficient local manpower.
• This will further reduce the scope of employment.

ECONOMIC FRAGMENTATION:

• This Act violates the fundamental idea of the Indian economy as one unit and dilutes steps to integrate the markets, which may lead to labor market fragmentation.
• There would be an exodus of low-paid workers as they would be unable to find work unless their states of origin give them sufficient job opportunities.
• What if the other states also start following the Haryana way?

IMPACT ON COMPANIES:

• Jobs in the private sector is based “purely” on the “skills and the analytical bent” of the employee.
• Other than potentially increasing costs for companies, the compliance burden on them will be huge, which also may provide opportunities for rent-seeking for bureaucracy.

CONSTITUTIONAL ISSUES:

• It is held that the new law went against constitutional provisions and violates Articles 14, 15, and 19 of the Constitution ((Read ahead)
• The core issue is whether a state could restrict employment based on domicile that too in the private sector.
• The stay granted by the Punjab and Haryana High Court was vacated by the Supreme Court. But it directed the
• High Court to decide on the issue within a month and asked the state government not to take any coercive steps against the employers for the time being.

CONSTITUTIONAL ISSUES INVOLVED IN THE ACT

VIOLATES ARTICLE 14 and 15:

• The plea filed in the Court states that the Act violates Article 14 (equality before law) and Article 15, which prohibits discrimination on various grounds religion, race, caste, sex, or place of birth.

VIOLATES ARTICLE 16:

• Article 16 of the Constitution specifically provides for equality of opportunity for all citizens in public employment.
• It prohibits discrimination on several grounds, including place of birth and residence.
• However, it permits Parliament to make a law that requires residence within a State for appointment to a public office.
• This enabling provision is for public employees and not for private-sector jobs. And the law needs to be made by Parliament and not by a State legislature.

VIOLATES ARTICLE 19:

• It stands in violation of Article 19 of the Indian Constitution, which guarantees the right to freedom, including to reside and settle in any part of the Indian territory and practice any profession, business, or trade.
• Article 19(1)(g) of the Constitution guarantees freedom to carry out any occupation, trade, or business. There may be reasonable restrictions “in the interests of the general public”, and in particular related to specifying any professional or technical qualifications, or to reserve a sector for a government monopoly.
• This Act, by requiring private businesses to reserve 75% of lower-end jobs for locals, encroaches upon their right to carry out any occupation.

CONTRARY TO COMMON CITIZENSHIP:

• The plea states that the Act is contrary to the very idea of common citizenship for the Union of India and that it fails to uphold the federal structure of the Union of India, which is part of the basic structure of the Constitution of India.
• India was envisaged as a Union of States with Single citizenship, which necessarily implied that States were not entitled to either bestow citizenship individually or any resembling privilege.

VIOLATES 50 PERCENT NORM:

• The question of permissibility also arises if the Indira Sawhney vs Union of India case is considered, where the Supreme Court had capped the reservation limit in public sector jobs at 50% in 1992.
• Legal experts have said that one may then contend that the reservation limit in private sector employees should not exceed that prescribed for public services.

AGAINST RESERVATION JURISPRUDENCE:

• The Supreme Court, in 2002, ruled that preference given to applicants from a particular region of Rajasthan for appointment as government teachers was unconstitutional. It said that reservations could be made for backward classes of citizens, but this cannot be solely on account of residence or domicile.
• In 1995, Rules in Andhra Pradesh that gave preference to candidates who had studied in the Telugu medium were struck down because they discriminated against more meritorious candidates.

POLITICS OF DOMICILE RESERVATION: AN OVERVIEW

Domicile politics (Sons of the soil) is nothing new to India, and Haryana is far from the first state to enact such restrictive laws. Earlier, Maharashtra, Andhra Pradesh, Karnataka, and Madhya Pradesh enacted laws requiring locals to be given preference in private jobs. However, each had to overcome its own set of obstacles, ranging from Constitutionality to compliance. Andhra Pradesh was the first state to enact such a law in the face of rising unemployment in 2019, but it was challenged in the High Court there. Karnataka too passed such laws, most recently in October last year, asking the private sector to give preference to local candidates, but companies did not know how to ensure compliance. Madhya Pradesh too has promised to bring in a 70% private sector job reservation quota for locals. In August last year, Maharashtra too joined the bandwagon and announced that it would make it mandatory for the private sector to reserve 80% of its jobs for residents only.

ANDHRA PRADESH EMPLOYMENT OF LOCAL CANDIDATES IN THE INDUSTRIES/FACTORIES ACT, 2019

The Andhra Pradesh law, passed by the Assembly in July 2019, and notified promptly next month, reserved 75% of jobs for locals in industries and factories, including any joint venture and project taken up under the public-private partnership (PPP) model. Where suitable local candidates were not available, the industry or factory would be given three years to train local candidates with “active collaboration of the Government”. The government also laid down that industry would have to apply for any exemptions from the Department of Labour, Employment and Training before sourcing employees from other states.
For now, the priority for the state, according to industry experts, is on getting new industries to absorb the local candidates in phases, as implementing the law for the existing workforce would entail terminating employees who may be from other States. The government is not forcing employers to implement the Act for various reasons, which mainly include the prevailing gloomy industrial scenario, largely attributable to the pandemic’s aftermath.
While the government has begun training programs to develop skilled labor to cater to various sectors and implement the Act, an advocate has filed a writ petition challenging the law’s constitutional validity. The state, the advocate, stated, has no power to prescribe the domicile or place of birth or place of residence as a requirement for public employment.

THE WAY FORWARD

HUMAN CAPITAL FORMATION:

• When it comes to investment, Haryana has not been lacking. But, Investors, stakeholders, and industry bodies on multiple occasions have stated that there is a shortage of adequately skilled local workforce — especially in the technology sector.
• Thus, skill development programs need to be undertaken on a war footing in collaboration with industries, vocational training institutes, etc.
• The states need to work in tandem with the Ministry of Skill Development and Entrepreneurship for implementing the National Skill Development Mission etc.

RAPID EMPLOYMENT GENERATION:

• According to CMIE data, Haryana’s unemployment rate has been higher than the national average for the past four years. In April 2020, approximately 40% of Haryana’s job seekers returned home empty-handed.
• Thus, it is imperative to fast-track employment opportunities for the youth, and a good start would be filling up the state level and national level vacancies in governmental posts that run into lakhs.
• Secondly, start-up ecosystems need to be promoted for entrepreneurship and employment generation.

PERSUASION THAN COERCION:

• Given the bleak employment situation in the backdrop of the reported loss of millions of jobs during the pandemic, it is no surprise that the leadership in every state seeks to find employment opportunities for its youth.
• But, a more persuasive and incentivizing approach can achieve the objective than a coercive approach. For instance, tax incentives for companies employing local candidates, ease of compliance for such companies, land concessions, subsidies, etc.
• If reservations have to be made, they should begin with a lower threshold of 20%-25% and give time for the state’s youth to inculcate and hone their specialized skill sets.

JUDICIAL DETERMINATION:

• Even though the Constitution allows the Parliament to prescribe a residential criterion for employment to public posts, it is doubtful whether such a measure can be extended to the private sector.
• Thus, an authoritative pronouncement by the apex Court would provide clarity to the issue.

SHUN POLITICAL NATIVISM:

• The broader trend of raising the sons of the soil issue for electoral gains in States will hurt the investment climate across the country.
• If more states follow suit, there will surely be an extreme level of talent crunch across industries in different States, and the free movement of India’s manpower resources within the nation will be threatened.
• Thus, political nativism may lead to parochial economics which in turn can create social unrest in the polity.

BALANCED AND RAPID REGIONAL DEVELOPMENT:

• The rise in regional inequalities (east vis-a-vis west and south) since the 1990s has deepened social divisions, with migration largely headed towards the western and southern States where infrastructure is better developed.
• The setting up of educational and skills institutions in backward areas can bridge the gap between the states and within the states(urban-rural) and these regions can turn into hubs of economic activity.
• The Aspirational District Programme of the GoI and various schemes for MSME development have huge potential in this regard.

THE CONCLUSION:  The Constitution conceptualizes India as one nation with all citizens having equal rights to live, travel, and work anywhere in the country. These State laws seem to go against this vision by restricting the right of out-of-State citizens to find employment in the state. This restriction may also indirectly affect the right to reside across India as finding employment becomes difficult. Beyond the question of Constitutionality, what is flagged by such developments is the state of the economy, especially the labour economy. Thus, sustainable employment generation policies and programs formed and implemented with wide-ranging consultations, especially with the industries, will surely be considered as good politics and good economics.

QUESTIONS:

• Explaining the salient features of the Haryana State Employment of Local Candidates Act 2020, comment upon the challenges in its implementation.
• How far do you think that providing domicile reservation by states through enactments can solve the problem of unemployment?
• Critically analyze the Constitutional issues involved in making domicile requirements mandatory for private sector employment.
• “Political nativism may be good politics but is parochial economics”. Illustrate and comment.
• “Minimum government and Maximum governance philosophy of the government entails regulation and not control” Examine the statement in the context of state legislation mandating reservation in the private sector.
• The social justice pledge of the Indian Constitution is at variance with the quest for efficiency of the private sector. Thus, affirmative action programs should be limited to the public sector only. Critically Examine.