Local Reservation and its implementation

  • IASbaba
  • September 15, 2021
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  • GS-2: Issues and challenges pertaining to the federal structure 
  • GS-2: Parliament and State legislatures—structure, functioning, conduct of business, powers & privileges and issues arising out of these

Local Reservation and its implementation

Context: Recently, Jharkhand assembly passed the Jharkhand State Employment of Local Candidates Bill, 2021 becoming the third state in the country, after Andhra Pradesh and Haryana, to pass a law which promises reservations for locals in private jobs.

Jharkhand law accords 75% reservation to locals in jobs, with the condition that this will apply to those who earn ₹40,000 or below.

Why local reservation?

  • The idea of local reservation is driven by issues of scarcity of employment, and the need for governments to satisfy their domestic electorate

What is the government’s rationale in bringing such laws?

  • Needs such policies to achieve substantial equality: With public sector jobs constituting only a minuscule proportion of all jobs, legislators have talked about extending the legal protections to the private sector to really achieve the constitutional mandate of equality for all citizens
  • Legitimate Right to ask Private Sector to share Burden: Since private industries use public infrastructure in many ways (infrastructure, subsidised land & credit, etc) the state has a legitimate right to require them to comply with the reservation policy.
  • Similar Reservation in Education was upheld: A similar argument was made in requiring private schools to comply with the Right to Education Act, which the Supreme Court also upheld.
  • Similar Affirmative Action in other countries: In the US, although there is no statutory requirement for employers to have quotas, courts can order monetary damages and injunctive relief for victims of discrimination(US Civil Rights Act of 1964 prohibits employment discrimination on the basis of race, colour, national origin, religion, and sex). The Employment Equity Act in Canada also protects minority groups, especially aboriginals from discrimination in federally regulated industries, even in the private sector.

States announce reservations for locals, but fail to implement it

While it has gained political traction, reservations for locals has met with both legal challenges and industry resistance, and has been barely implemented in any state

The Andhra story

  • The Andhra Pradesh Employment of Local Candidates in the Industries and Factories Act was passed in the state assembly first, on July 17, 2019.
  • The law mandates 75% reservation for locals in both existing and upcoming industries
  • The law has provisions that a company be exempted if it writes to the government that it requires specialised manpower not available locally, but this will require an examination by the state industries department.
  • The government has also asked industries what skill sets they need, so that they can train people and supply the requirements as well.
  • Industry is unhappy as it imposes restraints on them and that there are no sops and no rebates for investors.
  • The law has been challenged on the grounds that it violates Article 16(2) and 16(3) of the constitution. 
  • The law continues to be operative, although in an ineffective manner, as there is no stay from the Judiciary, which is yet to give final verdict.

The debate in Haryana

  • Haryana government passed a law which provides for 75% reservation in private sector jobs to those having a resident certificate (domicile). 
  • The law will be applicable for a period of 10 years.
  • Legal experts say that the new law would not withstand judicial scrutiny. This is because preference in jobs to the local candidates domiciled in Haryana was in contravention of Article 14 and Article 19(1)(g) of the Constitution.
  • India is one national and there is only one citizenship. To regard a person as an outsider merely because he is not resident of one state goes against the essential integrity of the nation.


Though the responsibility is with district collectors, no strict implementation is done due to paucity of the staff with the industries/labour departments. This clearly shows that these reservations have barely taken off the ground.

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