For those of us who live in Delhi, the notion that Gurgaon and Noida are part of Haryana and Uttar Pradesh respectively, is irrelevant, used as we are to thinking of these two locations as part of greater Delhi. In fact, for the chattering classes of South Delhi, it is far more likely you travel to the TV studios concentrated in the film city in Noida for your evening appearance on a TV debate. Similarly, the ease of navigating the ring road means you’re far more likely to travel for dinner to the high disposable-income Gurgaon (or Gurugram) than you are to “North Delhi” and “West Delhi” with all the catty implications these places carry in South Delhi.
Now, in this perfectly constructed east-west continuum of South Delhi, comes Haryana’s new job reservation policy, compelling Haryana businesses to reserve 75 per cent of all jobs that pay under Rs 50,000 a month for locals who have been domiciled for at least 5 years. As with all things in India, policy documents tend to be too long, too verbose, frequently lacking the white paper detailing the statistics and rationale that informed the policy, as well as the predicted outcomes against which success can be measured. Perhaps, that is why in the case of Haryana’s new policy, it may be germane to ask a few questions.
Questions we must ask
The first question we should be asking is, what percentage of jobs that pay under Rs 50,000 per month (U50KPM) are with non-locals? This is particularly important given that it is access to a large trained, cheap workforce that is a major attraction for most companies. While the white collar market can be assembled easily around metropolises, it’s the critical, problem-solving support staff who frequently tilt the balance. This is where the greater Delhi metropolitan area was so attractive, encompassing more than 30 million people.
Even in this U50KPM category, we need to understand the layers. Traditional blue collar jobs—such as household help, cleaning staff, drivers etc.— come under the Rs 20,000 to 25,000 per month category, while the Rs 30,000 to Rs 70,000 category is what would be reserved for soft white collar jobs. These jobs are the crux. They bring much in terms of value addition, but they also require problem-solving skills that are critical in facilitating the work of those over the Rs 70,000 per month category. This leads to the second question—on what basis was Rs 50,000 determined as the cut-off mark, as many jobs would straddle the Rs 30,000 to Rs 70,000 category.
It is important to note here that Gurgaon accounts for a significant portion of Haryana’s GDP—by some estimates, it could even account for up to 1 per cent of India’s GDP (Delhi accounts for around 4 per cent). Obviously Gurgaon is not Haryana and Haryana is not Gurgaon, but the GDP figures certainly make a case that what affects Gurgaon, affects the economic health of Haryana disproportionately. This is where we need to ask another question—what is the geographic spread of these U50KPM jobs within Haryana and what economic zones are they linked up to, given that economic zones act as synergistic whole that defy borders? Moreover, what are the direct and indirect GDP contributions of those in the U50KPM category, including the use of commuting infrastructure which adds to critical government revenue? These are important questions given the longish north-south axis of Haryana, bordering (clockwise from east)–Uttar Pradesh, Delhi, Rajasthan, Punjab and Himachal Pradesh. Even here, Delhi acts to cut-off the north-south axis making Gurgaon almost entirely absorbed within the Delhi ecosystem while the northern three-fourths of Haryana feed into different economic zones.
The Cost Factor
A good policy would essentially balance these questions of geographic spread and GDP contribution against opportunity cost. Here again, we need to raise a set of questions. First, what will be the cost of compliance for the businesses established in Gurgaon? What kind of changes in their structure will it require, and what is the pain/pressure point at which they decide to call it quits? We need to remember here, that unlike Mumbai, Pune, Nagpur and such similar economic hubs which are deep within Maharashtra, the opportunity costs of shifting are far higher in a crossroads, interconnected and heavily interdependent state like Haryana. One should not underestimate the role of Delhi’s ring roads that feed into the National Highway grid and more importantly the Delhi Metro which seamlessly connect Gurgaon to the talent pool as far away as Ghaziabad and Noida in Uttar Pradesh. Indeed, the Delhi Metro provides cheaper and better connectivity within Haryana (Bahadurgarh to Gurgaon and Faridabad to Gurgaon) than Haryana’s own local transportation system.
This is where we should also ask, should the categorisation been done based on skills and occupation rather than income, given the wide variance in pay even within a similar skill set. Optimally, was there a human resource survey of the state to ascertain which skills were most in demand and which sectors depended on out-of-state skills more? A corollary to this question would be, were the required skills sets even available in Haryana? What are Haryana’s training capabilities to provide these skills? And what latent pools of unemployed skill reside in Haryana that need investment attraction so as to pair skills with investments? Assuming there was a mismatch, one needs to ask the all-important question—how much investment it would take for the state to build up these skill sets to create a match? And, what would be the cost of such a local skilling programme?
Finally, we need to ask the all-important question— what steps will be taken to minimise corruption and extortion by inspectors carrying out this new legislation? Given the lack of checks and balances in bureaucracy, and its disproportionate power to inflict costs on businesses without accountability, this is in all probability the one factor that will weigh heavily.
All up, it is highly likely that the Haryana government did indeed think these issues through, but a white paper detailing the issues raised here would have allayed fears and given the legislation an appearance of greater policy rigour.