Sons-of-the-soil politics

In another burst of populism, with just a few months to go for the general elections, States such as Karnataka and Madhya Pradesh have mooted quotas for ‘locals’ in blue-collar private sector jobs. In 2008, Maharashtra announced reservations for locals in industries that avail themselves of government incentives. It appears that Karnataka has a similar model in mind. The Tamil Nadu Industries Minister said last month that it would consider reserving skilled jobs in the private sector for domiciles. There can be no denying that such quotas take away the freedom of businesses to employ a workforce of their choice. They do not address structural issues plaguing job creation all over the country, particularly in the northern and eastern States which account for a large share of inter-State migration to the southern and western States. Whether the demand for quotas for locals merely panders to narrow, sectarian political forces, which have been on the rise in the more developed western and southern States, is a moot point. That said, the motivations for these demands in the southern States in particular need to be recognised.

One reason for the rise in son-of-the-soil sort of politics in the relatively developed regions is the perception that they do not get their due share in central transfers. With successive Finance Commissions according a high weightage to poverty and population vis-a-vis development, the northern States end up receiving a generous share of the resources pie. This would seem to deprive the income-generating South of the resources needed to manage a growing migrant population, while not incentivising the poorer States to get their act together — a point repeatedly flagged by the southern States. The gap between the per capita incomes of, say, Bihar and Tamil Nadu has not narrowed over the last decade. In 2015-16, Bihar’s per capita net State domestic product at constant prices was ₹24,572, against Tamil Nadu’s ₹1.11 lakh. Even as State after State unfurls incentives to attract investment at ‘global investors’ meets’, it is clear that investors prefer to stick to States where a governance ecosystem (which includes a level of social infrastructure such as education and health) is already in place. This institutional deficit needs to be addressed.

Industry, too, must recognise that social inclusion cannot be overlooked. While quotas might seem like a restrictive idea, there is no reason why, like some of the corporations in the developed world, affirmative action policies cannot be implemented. An industry set up in a region where the State acquires the land should do its utmost to productively employ, or even provide a stake, to the local population. It is important that migrants be trained by their employers, as Japanese firms do, to be acquainted with the language and cultural nuances of the new place. But quotas, finally, detract from the fact that the problem of jobless, geographically skewed growth needs to be fixed.

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