Y S Jaganmohan Reddy

VIJAYAWADA: Andhra Pradesh has become the first state in the country to reserve jobs for locals 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% private jobs 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 big chunk of private jobs for locals, they have not implemented it as yet. Madhya Pradesh had only on July 9 stated that it will bring a law to reserve 70% private sector jobs for locals. Immediately after coming to power in Dec 2018, MP chief minister Kamal Nath had announced an industrial policy that made it mandatory to give 70% jobs to locals in companies availing financial and other facilities from the government. The demand has existed in Karnataka, Gujarat and Maharashtra as well.

Chief minister Y S Jaganmohan Reddy had promised the reservation in run-up to the assembly election. The new AP law states that if locals with 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 would not be able to hide behind the excuse of not finding skilled labour.

The Act also says that only those units that are listed in the first schedule of the Factories Act would be exempted after the government looks into each application and takes a call. These are mostly hazardous industries such as petroleum, pharmaceuticals, coal, fertilizers and cement among others.

Companies would have to comply with these provisions within three years of commencement of the Act and would have to provide quarterly reports about local appointments to a nodal agency.

‘Policy could be seen as protectionist’

Vijay Naidu Galla, president and CEO of the Tirupati-based Amara Raja industrial group and chairman of CII-AP said: “The Act is both good and bad. Good because it gives an indication of the government’s policy to promote local hiring in the state. But the government has to ramp up its skill development centres in the state to train locals to be ready to be hired in manufacturing and IT companies in the state.”

JSRK Prasad, who owns a high-tech castings company in Vijayawada , said that instead of setting aside 75% of jobs in the state for locals by government fiat, the administration could offer “incentives” to investors. “It would be difficult to enforce the fiat on employment because industry needs workers who can begin work immediately instead of first training the workers. This policy could end up being seen as protectionist, ,” Prasad added.

