THE GIST of Editorial for UPSC Exams : 27 JULY 2019 (Why ‘jobs for the boys’ is a bad idea (The Hindu))

Why ‘jobs for the boys’ is a bad idea (The Hindu)

Mains Paper 1 : Society
Prelims level : Not much
Mains level : Issues associated with employment

Context

• Earlier this week, one such creaking drawbridge, signalling a nativist impulse, was pulled up in Andhra Pradesh, with the passage of a Bill to provide for 75 per cent job reservation for locals in industrial units, factories, joint ventures, and projects set up under the public-private partnership mode.

Background

• The precise delineation of who will quality for this quota is yet to be made, but to the extent that this takes the State past the point of no return in terms of institutionalising job reservations in the private sector, it marks a defining moment in its industrial history.
• Once the law takes effect, it will apply to all existing and upcoming industrial units, although the former will have three years to comply.
• Under the law, if skilled personnel are not available for the jobs at hand, these industrial units cannot ‘import’ labourers from elsewhere; the burden of imparting the requisite skills to, and of employing, locals will fall on the units.

Unintended consequences

• The measure has come about in response to a perceived need to “protect” industrial jobs for so-called ‘sons of the soil’.
• And while it may play well by the political playbook to the extent that the new ruling dispensation is seen to be looking out for ‘locals’, it is certain to have unintended consequences that will have adverse impact over the longer term.
• The trouble with the State sliding down the slippery slope of sub-nationalism with such restrictive geography-bound job quotas is that, as with all bad habits, it is a contagious failing, and is bound to be emulated by other States too.

Strategies adopted by other state government

• Indicatively, the Madhya Pradesh government, hanging on by a slender majority and evidently looking to shore up its support base, has already given voice to a policy to reserve 70 per cent jobs in the private sector for ‘locals’.
• A few other States, too, are articulating similar parochial sentiments.
• The malefic effects of such games are manifest at the global level.
• When countries wage ‘trade war’ by debasing their currencies to gain competitive advantage or by erecting protectionist barriers they only advance a zero-sum game where both sides lose from such ‘beggar thy neighbour’ policies.

Changing jobs landscape

• The erection of sub-national protectionist walls with the stated intention of fencing off industrial jobs is also flawed on another count.
• It doesn’t reckon with the shifting of the tectonic plates of the employment landscape.
• India is actually experiencing a peculiar phenomenon of “premature non-industrialisation”: as a consequence of this, it has begun to “de-industrialise” even before reaching peak industrialisation.

Exercise in futility

• For Andhra Pradesh, therefore, to attempt to artificially ‘protect’ industrial jobs within its domain, when in fact the ground is shifting beneath it, amounts to an exercise in futility.
• There is one other supreme irony to the timing of the populist move by Andhra Pradesh.
• Economists had thus far bemoaned the absence of labour market reforms, and in particular the failure to iron out entrenched rigidities therein, as one of the primary contributory factors for the inability to generate manufacturing jobs in sufficient quantities to absorb the new entrants into the workforce.
• The Centre took the first tentative steps towards untangling the spaghetti bowl of labour laws in order to enhance the ease of doing business.

Conclusion

• There still remains much to be done, but it held out the hope that it would help reverse (at least in part) the de-industrialisation currently under way, and perhaps generate jobs.
• However, backward-looking initiatives, such as the one undertaken by Andhra Pradesh, may put paid to such hopes prematurely.

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Prelims Questions:

Q.1) With reference to the India’s Research and Development expenditure eco-system report, consider the following statements:
1. India’s investment in Research and Development remained constant at around 3 % of India’s GDP.
2. It has recommended that the growth in Research and Development expenditure should reach at least 5 percent of GDP by 2022.

Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both
D. None

Answer: D
Mains Questions:
Q.1) Andhra Pradesh’s nativist move to reserve 75% of jobs for ‘locals’ ignores the sweeping changes in the employment landscape. Comment.