Haryana’s 75% reservation in private sector jobs: Necessary or Regressive?

On 2 March 2021, Haryana Governor Satyadeo Narayan Arya gave assent to Haryana State Employment of Local Candidates Bill, 2020. The bill provides for 75% reservation in private sector jobs for candidates domiciled in Haryana (a person who was born in Haryana or has lived in the state for at least 15 years). This is applicable only for jobs that pay not more than ₹50,000 as monthly salary. This has raised alarms in the private sector.


Reservation in private sector jobs was a poll promise of Haryana’s Jannayak Janata Party (JJP). The party had allied with BJP to form the government in Haryana after the 2019 Assembly elections. Dushyant Singh Chautala, the Deputy Chief Minister of Haryana, is the co-founder and President of the JJP.

Dushyant Chautala is the great-grandson of former Deputy Prime Minister of India Chaudhari Devi Lal and grandson of former Haryana CM Om Prakash Chautala of the Indian National Lok Dal (INLD). Both Om Prakash Chautala and Dushyant’s father Ajay Singh Chautala have been sentenced to 10-years imprisonment in 2013 under various sections of IPC and the Prevention of Corruption Act. After Ajay and his brother Abhay Singh Chautala split ways politically, Dushyant and his family had started the Jannayak Janata Party.

Welfare of the farmers and the youth is considered as the top priority for the JJP. With a large part of its voter base concentrated in the rural hinterlands of Haryana, JJP’s priorities seem to resonate well with them. However, JJP’s stand on the three farm laws (it supported the BJP government) has alienated some of its supporters. In fact, many farmers had called for the resignation of Dushyant Chautala for supporting the farm bills.

Given this scenario, the enactment of the Haryana State Employment of Local Candidates Bill, 2020 seems to be a step towards appeasing its disenchanted voter base. The BJP, for its part, seems to have approved the bill to keep their alliance partner happy.

Reservation in private sector is necessary:

The bill’s Statement of Object and Reasons mentions the following –

“The influx of a large number of migrants competing for low-paid job places a significant impact on local infrastructure and housing and leads to proliferation of slums. This has led to environmental and health issues which has been acutely felt in the urban areas of Haryana affecting quality of living and livelihood. Therefore, giving preference to local candidates in low-paid jobs is socially, economically and environmentally desirable and any such preference would be in the interests of the general public.

With the enactment of the present Bill, in the interest of public at large, the State is also going to encourage all the private employers in Haryana to boost local employment. The Bill will provide tremendous benefits to the private employers directly or indirectly through qualified and trained local work force. Availability of suitable workforce locally would enhance the efficiency of Industry as the workforce is one of the major components for the development of any industrial organization/factory.”

In an article published on The Print, Dushyant Chautala wrote that Haryana is transforming from an agriculture-based economy to an industry-based economy. He noted that as job opportunities increased in the private sector, the government felt the need for a positive reinforcement through skill training to uplift people previously engaged in agriculture. That was the intent behind the reservation bill.

Another aspect which needs to be given due consideration is that this legislation contains a “sunset clause”, which means that this Act will cease after 10 years of its enactment. We strongly believe that the pace and commitment with which our government is functioning for the welfare of its citizens, over the next decade, the state will have sufficient infrastructure, skilled workforce, and job opportunities for everyone. Thus, the positive reinforcement that we currently aim to provide would not be required in the future,” wrote Dushyant Chautala.

Reservation in private sector is regressive:

Predictably, India Inc. has reacted negatively to the reservation bill. Uday Shankar, President of Federation of Indian Chambers of Commerce & Industry (FICCI), has warned that industrial development will come to a halt and private investments will reduce significantly. “Investors and entrepreneurs need to source the best human resources available in country to be competitive and successful. To force them in such a regressive straight-jacket will force them to look beyond Haryana and this will ultimately hurt the interests of the state. FICCI also believes that this move is against the spirit of the Constitution that gives the citizens of India the freedom to work anywhere in the country,” he said.

Several industry bodies, including the Confederation of Indian Industry (CII) and the National Association of Software and Service Companies (NASSCOM), have written to the Haryana government to reconsider the new legislation on reservation.

Gurugram, one of the bustling cities of Haryana, has seen a rapid transformation in its landscape over the years. Several private sector companies, especially in the Information Technology – Business Process Management sector, have established their bases in Gurugram. The city is also seen as an ideal destination for startup firms. But experts feel that the new reservation bill will be detrimental to the growth of Gurugram, and companies may now shift base to other states in the country.

Many have questioned the legal standing of the reservation bill. Legal experts feel that the domicile requirement for 75% of employees is excessive, and it may not hold up to scrutiny in the courts. The bill violates Article 14 of the Indian Constitution, which states: “The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India”. The bill also violates Article 19 (1) (g) which protects the rights of citizens “to practice any profession, or to carry on any occupation, trade or business.”

Some have noted that the law sets the wrong precedent. If other states also implement such laws, then the youth of the country will be deprived of better opportunities.