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Andhra Pradesh passes law to reserve 75% jobs for locals in industries

State to penalise firms for non-compliance; penalties to be prescribed when rules are framed

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In a sweeping decision, the Andhra Pradesh government has made it mandatory for existing and upcoming industries in the state to reserve 75 per cent jobs for locals. This hass been done through the passage of a new law called the Andhra Pradesh Employment of Local candidates in the Industries/Factories Bill, 2019.

Passed by the state legislative assembly on Wednesday, the five-page bill asks existing industries to ensure 75 per cent employment to the local candidates within three years from the date of commencement of this Act.

The government said it had to bring a special enactment to enforce the provision with respect to the jobs since it was noticed that the managements of industries did not subsequently keep their word to give jobs to the locals. Firms that don't comply with the 75 per cent provision could invite a penalty that will be prescribed when the rules are framed.

In case there are no qualified/suitable candidates available, the employers will have to train and engage local candidates within three years in close collaboration with government agencies, according to the bill. The bill was tabled on Monday.

"With the growth in industries, the demand for land for industrial use has been increasing. Since most of the requirement is met by acquiring private agricultural lands, the owners are being displaced and deprived of their livelihood. Therefore, there is a demand from land losers, apart from the local population, to provide employment," AP Labour Employment Training and Factories minister Gummanur Jayaram said in the statement of objects and reasons of the bill.

While the legislation only generally talked about 75 per cent jobs to be filled by locals and makes no mention about the cadres within these jobs in a factory, it has, however, left the issue open for a future debate by pointing out that only low-paying jobs were being given to locals in certain instances. Chief minister Y S Jagan Mohan Reddy vowed to bring such a law during his padyatra last year as an opposition leader.

"Though there were promises by the industrial managements to meet these demands at the initial phases of setting up of their industries, more often than not, the objectives are not met. In some instances, even though the local people are employed as per the initial commitments, they are generally employed as gardeners, house-keeping personnel and other low income jobs. This is causing dissatisfaction in the local community and leading to industrial unrest, the government further stated.

Besides the industries/factories, the Act also makes the '75 per cent' provision mandatory for ' joint ventures and projects taken up under PPP mode', potentially covering construction and irrigation projects like Amaravati capital city and Polavaram irrigation project, where most of the contract workers deployed here were brought from Bihar and other places.

While participating in the discussion in support of the bill in the house, ruling party member and chief minister's uncle Ravindranath Reddy specifically pointed out the way workers were being brought from outside to execute these projects. Reddy also mentioned about the shrimp processing industry in Nellore district where, according to him, all the 40,000 workers deployed by the employers were brought from Odisha.

Meanwhile, the government has brought an official amendment to the bill replacing Clause 4 with powers to give exemption from the provisions of the Act to a particular entity in the event of local candidates not being available.

"It is an excellent move. Let every state in the country bring a similar legislation to provide jobs to locals. Like in Germany, where every village has a factory, we also should have industries in villages and provide jobs to the local people for an all-round development," CCL Products(India) Limited(formerly Continental Coffee) executive chairman Challa Rajendra Prasad said. 

The Confederation of Indian Industry(CII), AP, spokesperson said the industry body will come out with its views once it completes the internal discussion on the legislation. Federation of Andhra Pradesh and Telangana Chambers of Commerce and Industry(FAPTCCI) president Karunendra Jasti said he would be able to give his views only after studying the Act.

A senior official in the AP industries department  said, in most of the labour intensive factories located in places like Sri City in Nellore or in Vizag such as Brandix garment manufacturing units, up to 70-75 per cent jobs are being held by locals only. " Even up to the mid-management level positions in public sector companies like BHEL also held by locals as people usually prefer local units when it comes to applying for jobs in Central PSUs. However, if the government insists on similar percentage of jobs in all cadres of a company, or it directly links the industrial incentives with the mandatory 75 per cent jobs to locals, then companies will be in trouble," he said on condition of anonymity. 

Replying to the debate on the jobs bill, the chief minister said industries will not face any problem in implementing the Act as the the government was giving them three years to comply with its provisions. 

"We defined local in a broad sense. If you don't find suitable persons in the immediate vicinity, try to look for candidates in the neighbouring villages. The scope will then expand to the district and finally to the entire state, where I am sure you will find a suitable candidate for any job profile. We will collaborate on training the locals with skills required for the jobs you provide," Reddy said.