Recently, a legislation was passed by the Haryana Government that instructed companies in the state to first provide jobs to the locals, i.e. Haryanvis before they hired people from the rest of India. This gave rise to much debate and controversy. Commentators and economists have criticised it to be a step against the liberal and free nature of the economy.
Laws promoting Nativism
Haryana is not the only state who has implemented such laws. Tamil Nadu’s Dravida Munnetra Kazhagam (DMK) declared in its election manifesto that if voted to power, it would reserve seats for locals in government jobs. In Jharkhand, 75% reservation for locals in the private sector was announced. These promises and legislations have their roots in the fear of the Governments of the possible social revolution or political upheaval. Thus, to protect their authority and also the interest of the large mass of locals who are jobless, several states are embarking on promoting nativism.
Limited power of State Governments
During the five-year tenure of an elected state government, it can make efforts to attract various businesses to provide quality local infrastructure and also make land available for investment at affordable rates. But the catch here is that skilled local labour is generated over several decades of social efforts and development of the state and not overnight. The Goods and Services Tax (GST) has further restricted the ability of the states to offer any tax incentive or concession to businesses. With little to no financial autonomy, the states have been finding it extremely difficult to interest investors and businesses and also to create new employment opportunities. For instance, if Amazon, an American multinational technology company based in Seattle, wishes to expand its base in Indian states, there is very little the state governments can do given the limited financial autonomy they enjoy. The Chief Minister of a state has limited authority with respect to the management of the economy on a greater scale and hence his/her ability to attract investors who would generate employment is also limited.
Widening gap between States
The three large states of Maharashtra, Karnataka and Tamil Nadu are richer in comparison to three other large states viz, Madhya Pradesh, Uttar Pradesh and Bihar with respect to the per-capita income. This has created a phenomenon wherein the economic divergence among the states is increasing. According to Praveen Chakravarty, a political economist, the gap has only been widening increasingly between the richer and poorer states because of the ‘agglomeration impact’ (the ecosystem of talent, supply chain, better living conditions, etc.) of the progress in modern economic paradigm.
Politics and Nativism
Despite the high ideals one might have for the way democracies must function, it all boils down to votes and numbers. The leaders who get elected have to constantly make efforts to ensure that their constituencies are satisfied. The problem of unemployment has remained a big issue for the state governments to deal with for decades now. Hence it is not unsurprising for them to take steps towards giving the people what they want and also secure their vote banks.
What the governments and the citizens need to realise that this is merely a temporary solution to the bigger issue. Unemployment is not contained to states, rather it is the issue faced by the entire nation. If the states resort to reserving jobs for the locals, it would breed nativism which is detrimental and a threat to the diverse fabric of our nation. The Centre and the states have to work together and not on different tangents if they want to actually begin solving the problem. Unless they are given such autonomy, the states will resort to passing laws that fuel nativism directly or indirectly.
This article has been written by Ruchira Sarma for The Paradigm
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