The BJP-led Haryana government’s decision to reserve 75% jobs in the private sector for locals has worried companies in the State. But many others see it as a golden opportunity for neighbouring cities and towns like Noida, Greater Noida and Neemrana.
So, will Gurugram’s loss be Noida’s gain?“Politically, it may be a great move but economically it is a blunder,” says Rahul K. Mishra, professor of strategy and international management at the IILM Institute for Higher Education, New Delhi.
The Haryana Assembly had last year passed the Haryana State Employment of Local Candidates Bill, 2020, providing 75% reservation for local candidates in private sector jobs that offer a salary of less than Rs 50,000 a month. This was a key poll promise made by the ruling alliance partner Jannayak Janta Party (JJP).
“If you create such type of obstacles for the businesses they will think about moving away,” said Santosh Desai, MD, CEO of Futurebrands Ltd. “It is not just a small proportion of 10% or 20% reservation; 75% is not an insignificant number,” Desai added.
Experts believe Haryana has achieved a certain level of economic development and it would pose a formidable challenge for companies to find enough low-waged local skilled manpower.
Desai said, “Existing and already settled companies may take time to consider a move but new ones will definitely think twice before opting for Haryana. In the long run, even the old companies too might consider moving out.”
“It is going to harm the companies in Haryana as there is a shortage of skilled manpower in the State for that low level of pay,” said Prof. Mishra. He added, “The competing destinations of Noida, Greater Noida and Rajasthan will benefit as the skilled labour will move out and companies will be pressed to follow them outside Haryana.”
Desai backed Prof. Mishra. “Noida has infrastructure to absorb new companies.” A 2018 study by Patiala-based Punjabi University estimates that 59% of State’s workers are migrants coming from other States.
Industry watchers fear local quota would also mean an increase in skill costs borne out by the companies. “This is bad economics as the cost for companies will increase in training the local people and many SMEs do not have the resources. Obviously, to save this cost companies will look elsewhere,” said Prof Mishra, adding “Noida and Greater Noida will have advantage on this”.
He further said: “Services sector requires highly skilled people, for example, Medanta Hospital in Gurugram. It will be difficult for the hospital to get trained technicians just from Haryana. The same goes for five star hotels and high tech manufacturing for cars and automobiles,” he said.
Industry body CII too issued a statement expressing its displeasure saying, “reservation affects productivity and Industry competitiveness.” “At a time when it is important to attract investments at state level, the Haryana Government could have avoided imposing restrictions on Industry,” the statement by grouping’s Director General Chandrajit Banerjee read.
Cities like Gurugram, Mohali, Bengaluru, Chennai, Pune and Hyderabad have been the prime beneficiary of economic liberalisation, which calls for an open market, including free movement of capital and labour,” said an industry analyst, who wished not to be named.
“Chennai, being the hub of Dravidian regional politics and despite huge political demand for local quota never succumbed to such temptation,” he said.
Gurugram’s fortunes started changing way back in the 1970s when Maruti Suzuki India Limited established its plant in the city. Economic liberalisation, proximity to the national capital and international airport further fuelled its rise. In 1997, major American brand General Electric set up its unit here. Others like Google, Nestle, HUL, Coca-Cola, Pepsi, BMW, Agilent Technologies followed. The city today boasts the presence of about 250 or 50% of the Fortune 500 companies.
Uttar Pradesh, on the other hand, in May last year suspended 35 of the 38 labour laws for three years through an Ordinance. A move the Confederation of Indian Industries (CII) said, “will give huge flexibility to industry in their labour practices”.
Besides UP Chief Minister Yogi Adityanath is making all out efforts to attract investment in the State including holding an annual investor’s summit. “We have encouraged investment in Uttar Pradesh by projecting it as the best place to put in money,” CM Yogi said at News-18’s Rising Uttar Pradesh summit on Wednesday.
“Noida is more affordable with better planned infrastructure, enhanced public transport and with greener space compared to concretised Gurugram,” said a professional working in Gurugram’s Cyber City.
Asked if Haryana’s reservation policy goes against the spirit of Prime Minister Narendra Modi’s strong privatisation and Atmanirbhar Bharat ‘self-reliant India’ pitch, Prof. Mishra says, “Atmanirbhar Bharat is also dependent on Ek Bharat and Shreshtha Bharat. Companies which manufacture in Haryana sell products across India. Labour policies and industry policies need to be flexible.”
Noida and Greater Noida, like Gurugram, is located just within 50 km of the national capital New Delhi. Within 100 km radius, it has two functional airports including New Delhi’s IGI and Ghaziabad’s Hindon Airport. Also, the upcoming Noida International Airport at Jewar is touted to have six to eight runways, the maximum in India.
Secondly, Noida is on the Yamuna Expressway connecting Delhi to Agra and National Highway 93 linking Aligarh to Agra. It is well connected with the Delhi-Kolkata and Mathura-Bareilly rail links.