Why Haryana’s Booming Industry Fails to Create Sufficient Jobs

Are Other States Listening?

Newsreel Asia Insight #48
Nov. 19, 2023

The Punjab and Haryana High Court has quashed a Haryana state law that required 75 percent of private sector jobs to be reserved for local candidates. It casts a spotlight on the state’s paradoxical situation. Renowned for its vigorous industrial expansion, Haryana has, however, neglected to develop a correspondingly strong educational system for its residents. As a result, while industries have flourished, local employment opportunities have remained scarce.

The court nullified the Haryana State Employment of Local Candidates Act, 2020, on Nov. 17, as reported by The Print. The legislation was a bold move by the state government, aimed at addressing the rising unemployment among its residents. However, the High Court’s decision, based on petitions from industry bodies, highlights a deeper, systemic issue.

The youth unemployment rate in Haryana, specifically among those aged 15 to 29, stands at 17.5 percent, in stark contrast to the broader unemployment rate of 6.1 percent for individuals aged 15 and above. This data, provided by the National Statistical Office of the Ministry of Statistics and Program Implementation, shows a significant disparity in employment prospects for the state’s younger population.

Haryana has successfully attracted big industries – from the automobile manufacturing sector to electronics & IT/ ITEs – offering subsidised industrial plots and a conducive business environment. However, this success has not been mirrored in the education sector.

Many young people in Haryana lack the specific skills or technical expertise required by the state's industries, leading to a mismatch in job requirements and available talent. And as agricultural land gets subdivided and becomes less economically viable, more young people are moving away from agriculture without having alternative employment opportunities.

The High Court’s ruling, which emphasises the constitutional right to equality of employment and non-discrimination based on domicile, underscores a critical oversight. The state’s attempt to legislate employment for locals, as the court noted, infringes on the fundamental rights of private employers. The judgment also pointed to the impracticality of such laws, using the example of a builder who needs specific skills that might not be available locally.

The state’s response to the petitions, which argued that local unemployed youth constituted a distinct class deserving of such reservation, was a “Band-Aid” solution to a deeper wound.

Haryana’s situation is a lesson for other states in India. Due to electoral politics, governing parties within a state may be inclined to prioritise economic growth over development.

Growth is merely about an increase in the production and consumption of goods and services, increasing the state’s  contribution to the country’s Gross Domestic Product or Gross National Product over time. It does not necessarily reflect the economic wellbeing of the population.

Economic development, on the other hand, includes improvements in the quality of life and living standards of the population, such as increased education levels, better healthcare and improved infrastructure. It involves a wide range of changes in the economy and society, aiming for a more equitable distribution of wealth, increased employment opportunities and environmental sustainability.

Similar to their preference for growth over development, governing parties often devote more time and energy to party politics than to the actual governance of the state.

Haryana’s focus should at least now shift to revamping the state’s education system, aligning it with the needs of the modern industrial workforce. Only then can the fruits of industrialisation be truly and inclusively enjoyed by the residents of the state.