IT industry weighs options as Haryana quota law comes into force in January

The information technology industry is evaluating options in Delhi and the National Capital Region on account of Haryana’s decision to mandate 75 per cent job reservations for locals in the state from January 15, 2022.

“The industry is evaluating what the options are in Delhi and Noida in terms of fresh growth, because this (law) applies only to new jobs. The other thing is how they can leverage the hybrid model to overcome this,” said Ashish Aggarwal, vice-president and head of public policy at the National Association of Software and Services Companies (Nasscom).

In March, when Haryana first proposed the law, industries across the board expressed reservations about it.

The law mandates 75 per cent reservations for the locals in private jobs with a monthly salary of Rs 50,000 or less. The state government on November 6 reduced the upper limit of the gross monthly salary to Rs 30,000. It has relaxed the domicile requirement from 15 years to five years.

In a survey conducted in March, Nasscom found about 150,000 IT jobs in the state would be affected. As many as 80 per cent of the respondent companies said this would harm their operations and investment, with the majority of them saying this would result in shifting out of Haryana or growing their operations to other states and in other countries.

“For our industry, the impact will be less because only some-entry level and certain business process management (BPM) jobs are likely going to get impacted. But we don’t yet know how exactly this will impact other industries because of the lower threshold, and what it will mean for start-ups. We are rolling out a survey just like we did last time, to get a sense of what exactly the impact will be,” said Aggarwal, adding that conversations and meetings with industry are being planned. 

Another issue the industry has been worried about is other states following suit and bringing in similar laws.

In March, AK Automotives, a Rohtak-based manufacturer and wholesaler of motorcycles parts, filed a petition in the High Court of Punjab and Haryana, challenging the law. It was withdrawn after judges observed that since the government was yet to enforce the Act, the petitioner's industry was not adversely affected at that stage.

FIGHT OR FLIGHT

• Haryana reservation law mandates 75 per cent reservations for locals in private jobs with a monthly salary cap of Rs 30K
• Nasscom survey in March found about 150,000 IT jobs in the state would be impacted
• Industry worried about other states taking a leaf out of Haryana and implementing similar laws