Andhra Pradesh, the first state to reserve 75% of private jobs for locals

VIJAYAWADA: Andhra Pradesh has become the first state in the country to reserve jobs in private industrial units and factories. On Monday, the AP Assembly passed the Andhra Pradesh Employment of Local Candidates in Industries/Factories Act, 2019, which reserved 75% across all categories in industrial units, factories, joint ventures as well as projects that are in public-private partnership (PPP ) mode.

Although many states have been making noises about reserving a large portion of private jobs for locals, they have not yet implemented it. Madhya Pradesh only on July 9 stated that it will bring a law to reserve 70% of private sector jobs for locals. Immediately after coming to power in December 2018, the prime minister of parliament, Kamal Nath, announced an industrial policy that forced to grant 70% of jobs to the premises in companies that have financial and other facilities by the government. The demand has also existed in Karnataka, Gujarat and Maharashtra.

The prime minister had promised the reservation before the election of the assembly. The new AP law states that if the premises with the necessary skills are not available, then the companies would have to train them in association with the state government and then hire them. Experts say that with this companies could not hide behind the excuse of not finding skilled labor.

The Law also says that only those units that are listed in the first program of the Factories Law will be exempt after the government examines each application and answers a call. These are mostly dangerous industries such as oil, pharmaceuticals, coal, fertilizers and cement, among others.

Companies would have to comply with these provisions within three years after the start of the Law and would have to provide quarterly reports on local appointments to a nodal agency.

«Politics could be considered protectionist»

Vijay Naidu Galla, president and executive director of the Amara Raja industrial group based in Tirupati and president of CII-AP said: The Law is good and bad. Good because it gives an indication of government policy to promote in the state. But the government has to increase its skill development centers in the state to train locals to be ready to be hired at manufacturing and IT companies in the state.

JSRK Prasad, who owns a high-tech foundry company, said that instead of reserving 75% of jobs in the state for local government mandates, the administration could offer incentives to investors. “It would be difficult to enforce the order in employment because the industry needs workers who can start working immediately instead of training them first. This policy could end up being seen as a protectionist, Prasad added.