Startups Wary Of Haryana's New Job Reservation Law, Rethink Future Investment In State

As Haryana's new law on reserving 75 per cent private-sector jobs for people domiciled in the state will come into force from 1 May, nearly 60 per cent of startups based in Haryana are taking a relook at their future investment plans in the state.

The quota for local people will apply for 10 years to private sector jobs that offer a salary of less than Rs 50,000 a month.

The act states that the quota applies to all the Companies, Societies, Trusts, Limited Liability Partnership firms, Partnership Firm and any person employing ten or more persons and an entity as may be notified by the Government of Haryana.

The demand for the above law was championed by deputy chief minister Dushyant Chautala’s Jannayak Janta Party (JJP), a partner in the ruling alliance. The reservation for locals in jobs was a key promise made by JJP in the 2019 assembly elections.

The impact of the law on startups is expected to be significant since 67.3 per cent of the employees earn below Rs 50,000 per month, reports The Economic Times.

Some of the suggestions put forward by startups to the state government to escape this predicament include lowering the quota to 10-30 per cent or reducing the salary threshold to below Rs 20,000 if the government cannot consider complete repeal of the law or provide exemption to them.

“The job reservation law applies even to businesses with just ten people. It would seriously hurt startups’ ability to attract the right talent, especially tech-based startups where most of the work is skill based,” said Ashish Aggarwal, Head of Public Policy at Nasscom.

“Unintentionally, this law is likely to undermine Gurgaon's position as the north India hub for startups. The government should consider these aspects,” he added.