After AP’s recent decision & announcements made by states like MP, now Rajasthan govt is planning to make it mandatory for industry in the state to recruit 75% of its workforce locally.

The state labour department has called for a stakeholders' meeting on Friday including industry bodies like Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI), & Federation of Rajasthan Trade and Industry (FORTI) to seek feedback & suggestions as the govt is looking to bring in a bill to this effect in the next assembly session.

While many states have been offering incentives for hiring locals, recently AP has made it mandatory after HP & UK. MP is yet to enact similar a law despite the new Congress govt announced it immediately after coming to power late last year.

State labour commissioner Samit Sharma said, “The local population wants to be part of industrial development which we cann't deny them. At the same time, we are very careful not to create headwinds for the industry. We have to find a fine balance, which is the purpose of the meeting.”But the business community in the state expressed concerns that such a law will go against the grain of free-market economy as it will restrict movement of human resource & hinder industrialisation.

But the business community in the state expressed concerns that such a law will go against the grain of free-market economy as it will restrict movement of human resource & hinder industrialisation.

An industrialist said, “Besides increasing regulatory compliance & creating hurdles for ease of doing business, the move will potentially hamstrung industry looking for right talent. If all the states bring in such laws, the impact will be catastrophic.”

The industry fears that local job reservation will give rise to labour union activism, while creating large scale unemployment in states with low development potential.

Some states including Rajasthan are already offering employment-linked incentives to industry for hiring locals but the business community said by making it mandatory would be the last thing they expect.

“If, the proposed plan becomes an Act, how & on what ground we can sack the workers. If the industrialists are compelled to implement a law like this, it will create chaos & unrest in the existing workforce,” said an industrialist.

Some industrialists has pointed out that the experience of HP & UK hasn't shown any positive impact due to the employment quota & that should be kept in mind while taking the right decision.

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