Don’t force job quotas on the private sector

It’s a band-aid approach to the job crisis, aimed largely at political dividends

Rajasthan is the latest to join the bandwagon of states proposing to provide job reservations in the private sector. It plans to reserve 75% of jobs for the local residents in the private sector, much as Andhra Pradesh did earlier this year through a law. Madhya Pradesh and Gujarat have also promised such reservations, and pollbound Maharashtra and Haryana may go the same way. What was earlier confined to socially and economically backward sections needing affirmative action has now become a broadbrush political move.

There is no doubt that there is a huge need for job creation across states, but forcing the private sector’s hand is not the way to go about it. As people move out of the agrarian sector, they are faced with unemployment and few skills for the jobs that are available. The answer should be to provide the kind of education and skills that the job market demands rather than impose quotas on the private sector. And the answer also should be to create a business-environment that attracts the private sector. The rest will follow. The private sector is crucial to the growth and development of a growing economy and should not be hobbled by moves that are not businessfriendly. There is another aspect to such quotas — they prevent free movement of talent and labour.

The main concerns of people looking for jobs are financial security and better opportunities. And, for this, they may wish to move to states where there are greater opportunities. Job quotas are the easy way out, a band-aid approach to the problem of unemployment, which is largely aimed at political dividends. A longer term and lasting solution would be to match skills with industry and nudge industry to go in for affirmative action and inclusiveness as long as this is not at the risk of losing its competitive edge. This is the way forward, not shortcuts like forced job reservations.