Madhya Pradesh must junk domicile quota, should focus on job creation to tackle unemployment

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August 21, 2020 5:35 AM

There has been large-scale out-migration from the state; nearly 15 lakh migrants from the state returned home during the lockdown.

The state’s unemployment rate in July 2020, at 3.6% as per CMIE, was lower than the corresponding India figure of 7.4%.The state’s unemployment rate in July 2020, at 3.6% as per CMIE, was lower than the corresponding India figure of 7.4%.

The Shivraj Singh Chouhan-led government in Madhya Pradesh announcing 100% reservation for locals in state government jobs is yet another example of state governments choosing domicile quotas, instead of far more effective and neater measures to tackle unemployment, like labour law reform, making land available/affordable for industry, etc. Against the backdrop of the pandemic exacerbating unemployment anxieties, Haryana had last month passed an ordinance to reserve 75% of private sector jobs paying under Rs 50,000 a month for people from the state. Assam, Karnataka, even the Chouhan government’s predecessor, led by Kamal Nath, have all flirted with domicile quotas over the last few years. Similar demands have gained political momentum in Rajasthan, while states like Gujarat, Tamil Nadu, Maharashtra and Andhra Pradesh already provide for domicile quotas in jobs in some form or the other—for instance, while Gujarat mandated 85% jobs reserved for locals 25 years ago, Maharashtra provides for 80% reservation for Maharashtrians in private sector firms that sought state government incentives or tax benefits. However, the fact that these have hardly been enforced—indeed, migrants account for a large chunk of employees in key industries in these states—shows that the states can’t do without migrant labour. A Karnataka trying to stop the migrant labour exodus (before backing down) during the lockdown is further evidence of this.

It is not clear what political imperative forces the Chouhan government to mandate the hiring of locals. The state’s unemployment rate in July 2020, at 3.6% as per CMIE, was lower than the corresponding India figure of 7.4%. And, as per IIM-A academic and migration expert Chinmay Tumbe, non-locals make up just 5% of those employed in the state. The problem that the Madhya Pradesh government really needs to fix is low job creation. There has been large-scale out-migration from the state; nearly 15 lakh migrants from the state returned home during the lockdown. The actual number of migrants from the state, of course, would likely be much higher. The state also doesn’t boast of an impressive labour force participation rate; though, at 57% in the 15-59 years age group, this is slightly higher than the India average of 53%, it could be indicative of, among other things, many working-age individuals who are unemployed largely because there are no jobs locally and they are unable/unwilling to migrate. It is tempting to see the Chouhan government’s quota as an improvement over the Kamal Nath government’s proposal of 70% quota for locals in private sector jobs—if there was a dearth of talent locally, either private sector employers would have been hamstrung or the move, like similar ones in other states, would have remained on paper. The fact is that Article 16 of the Constitution prohibits discrimination in public sector employment on the basis of domicile status. Though there is a carve-out for Parliament to allow this, state legislatures have no such power. Various higher courts, including the SC, have cited this in judgments striking down domicile quotas. Politically, such decrees foster balkanisation. If each state were to follow a similar course, it isn’t hard to imagine wider fissures over a host of issues—from states’ share in devolution from the Centre to utilisation and sharing of natural resources.

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