Industrialists and sector experts opine that Haryana’s new law reserving 75 per cent private sector jobs for the state’s residents will impact the allied economy, particularly in industrial belts like Gurugram.
The Gurugram-Manesar belt is one of India’s largest automobile, IT hubs and experts are of the opinion that the new law will lead to lowering of efficiency and skill requirements ultimately impacting productivity, revenue and competitiveness, possibly compelling some industries to consider relocating to other states.
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IT, auto, apparel and garments are the major industries in Gurugram. Several manufacturers, including Maruti Suzuki, Hero MotoCorp, Honda Motorcycles and JCB, as well as their ancillaries, have units in the city. The auto industry contributes more than 30% of the state’s GDP.
According to industry bodies, around 75% workforce in the automotive sector, per cent in the garment and apparel industry, 80% in IT & ITeS, 50% in retail and 85 per cent in the construction sector are from outside Haryana.
Though the law has a provision that allows companies to hire from outside if they don’t find suitable candidates, the approval has to come from government authorities.
The move comes at a time when Haryana is witnessing the highest unemployment rate in the country.
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According to the Centre for Monitoring Indian Economy, the February unemployment rate in Haryana stood at 26.4 per cent as against the national average of 6.9 per cent.
On March 2, 2021, the State government passed the Haryana State Employment of Local Candidates Bill that mandates 75 percent reservation for local people in private sector jobs, where the salary is less than Rs 50,000 a month. This rule will be applicable for 10 years and aims to address rising unemployment in the state.
For IT and tech firms, the timing could not have been more inopportune. It comes when the demand for talent is outstripping supply and companies are stepping up their hiring across different levels.
For instance, Infosys increased its initial recruitment plan of 15,000 campus hires to 24,000 as the demand increased. TCS will employ 40,000 freshers, and HCL Tech plans to take in 15,000 new staffers from campuses in FY22. Wipro has not disclosed their numbers so far.
According to job portal Indeed.com, the average salary for newcomers in IT could range anywhere between Rs 12,000 and Rs 40,000 in the country.
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