THE CONTEXT: The Karnataka Cabinet’s approval and subsequent pause of a Bill mandating reservation in private sector jobs for residents has sparked significant debate. The Bill, which reserves 50% of managerial and 70% of lower-level positions for locals, has been criticized for potentially deterring investment and violating constitutional provisions.
THE ISSUES:
Constitutional Violation of Article 19(1)(g): The Bill may infringe upon the fundamental right of private sector entities to conduct occupation, trade, or business under Article 19(1)(g) of the Constitution. In T.M.A. Pai Foundation vs. the State of Karnataka (2002), the Supreme Court held that the right to establish and administer educational institutions is an occupation under Article 19(1)(g) and thus protected from government interference except on merit.
Discrimination in Public Employment: Article 16(2) prohibits discrimination in public employment based on residence, and Article 16(3) allows for such reservations only by a law made by Parliament. In Dr. Pradeep Jain vs. Union of India (1984), The Supreme Court held that domicile-based reservations in public employment must be scrutinized to ensure they do not violate the equality principle.
Violation of Right to Movement and Settlement: The Bill may violate Articles 19(1)(d) and 19(1)(e), which guarantee the right to move freely and reside anywhere in India. In the State of Uttar Pradesh vs. Kaushalya (1963), the Supreme Court held that the right to move freely and reside anywhere in India implicitly allows citizens to work anywhere in India.
Exceeding Reservation Cap: The Supreme Court’s 1992 Indira Sawhney judgment capped reservations in public employment at 50%, allowing exceptions only for extraordinary situations of social backwardness. In Indira Sawhney vs. Union of India (1992), the Supreme Court ruled that total reservations should not exceed 50% of available seats or posts, except in extraordinary situations.
Impact on Investment and Economic Growth: The Bill could make Karnataka unattractive for investments, potentially driving businesses to relocate. The Haryana State Employment of Local Candidates Act 2020 was challenged in the Punjab and Haryana High Court, which observed that it violated the fundamental rights of job seekers and employers. However, the final decision is pending in the Supreme Court.
Lack of Industry Consultation: The Bill was criticized for being introduced without adequate consultation with the industry. Article 19(1)(g) ensures the right to practice any profession or to carry on any occupation, trade, or business. In State of Rajasthan vs. Basant Nahata (2005), the Supreme Court emphasized the need for consultation and reasonableness in enacting fundamental rights laws.
THE WAY FORWARD:
Promote Skill Development and Education: Enhance skill development programs and educational opportunities for residents to make them more competitive in the job market without mandating reservations. The Supreme Court in T.M.A. Pai (2002) and P.A. Inamdar (2005) rulings emphasized merit-based admissions and the right to occupation under Article 19(1)(g). Countries like Germany and Singapore focus on robust vocational training systems to enhance local employability. This approach avoids potential violations of Articles 19(1)(g), 16(2), 19(1)(d), and 19(1)(e) of the Constitution.
Incentivize Voluntary Local Hiring: Offer tax incentives and other benefits to companies that voluntarily hire a significant percentage of residents. This avoids mandatory quotas and respects the fundamental right to trade and business under Article 19(1)(g). The U.S. offers tax credits to companies that hire veterans and individuals from disadvantaged backgrounds. The 93rd Amendment allows for reservations in educational institutions but not private employment, reinforcing the need for voluntary measures.
Regional Development Programs: Implement regional development programs to create job opportunities in underdeveloped areas and reduce the need for migration to urban centers. Addressing regional disparities can help balance economic growth and reduce pressure on urban job markets. The Supreme Court has struck down state laws providing regional employment preferences, emphasizing the need for non-discriminatory development policies. The European Union’s Cohesion Policy aims to reduce regional disparities through targeted investments in infrastructure and job creation.
Public-Private Partnerships (PPPs) for Employment: Establish PPPs to create job opportunities and training programs tailored to the needs of local industries. PPPs can leverage private sector expertise and resources to enhance local employment initiatives. Countries like Australia and Canada use PPPs to address local employment challenges and build industry-specific skills.
Legal and Policy Reforms: Amend existing laws to provide a clear framework for local employment initiatives that comply with constitutional provisions and judicial precedents. Ensures local employment policies comply with Articles 14, 16, and 19 of the Constitution. The U.K. and New Zealand have clear legal frameworks for local employment initiatives that respect national and international legal standards.
THE CONCLUSION:
While the Karnataka government has paused the bill for further review, any law mandating reservation for locals in private sector jobs would likely face constitutional challenges and potentially undermine India’s national unity. The government must carefully balance regional interests with constitutional obligations and economic considerations.
UPSC PAST YEAR QUESTIONS:
Q.1 Discuss the impact of the post-liberal economy on ethnic identity and communalism. 2023
Q.2 Do you agree that regionalism in India appears to be a consequence of rising cultural assertiveness? Argue 2020
Q.3 Has the formation of linguistic States strengthened the cause of Indian Unity? 2016
Q.4 What is the basis of regionalism? Is it that the unequal distribution of benefits of development on a regional basis eventually promotes regionalism? Substantiate your answer. 2016
Q.5 Right of movement and residence throughout the territory of India are freely available to the Indian citizens, but these rights are not absolute. Comment 2022
MAINS PRACTICE QUESTION:
Q.1 The Karnataka Cabinet recently approved and then put on hold a Bill mandating reservation in private sector jobs for residents. Discuss the constitutional challenges and potential economic impacts of such a Bill.
SOURCE:
https://www.thehindu.com/opinion/op-ed/shaky-law-unsound-for-investment/article68429076.ece
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