The Maharashtra government would soon issue an order whereby GST refunds would be blocked if an industrial unit fails to submit proof that 80 per cent of its employees are 'sons of the soil' as required by rules, it said Thursday.
Industries Minister Subhash Desai said a new Government Resolution (GR) would be brought in for this purpose. It would also apply to recruitment of contract employees, he said.
If needed, Maharashtra may contemplate bringing a law, on the lines of Andhra Pradesh, to ensure that local people get certain proportion of jobs in industries, he said.
Maharashtra was the first state to frame a rule in 1968 that all industrial establishments should hire at least 80 per cent local people, Desai, a Shiv Sena leader, said.
"The first GR was issued on November 18, 1968, and since then the GR has been revised (re-issued) five times till 2008," he told reporters.
Late Shiv Sena founder Bal Thackeray had led several agitations demanding priority for local people in jobs, and the GR in 1968 was its result, he said.
The government gives refund on Goods and Services Tax to industrial establishments based on their capital investment. In 2018-19, the total refund amounted to Rs 3,035 crore, Desai said.
"If the refund is blocked, it will be a huge loss for industrial units and they will not dare violate the rule to hire 80 per cent locals," he said.
The refund would be released only after the industrial unit submits proof that it has complied with the rule.
As per government records, overall 90 per cent of employees in industrial sector are locals, while 84 per cent of those occupying supervisor/managerial grade posts are Maharashtrians.