Local Reservations in Indian States, Happiness Committee of Kerala, Revamped Model Skill Loan Scheme

(General Studies II – Polity Section – Indian Constitution—Historical Underpinnings, Evolution, Features, Amendments, Significant Provisions and Basic Structure.)

• Local reservation policies in India have emerged as a contentious issue, reflecting the complex interplay between regional aspirations, economic disparities, and national unity.
• Aimed at addressing unemployment among locals, these policies have sparked debates about their constitutionality, economic impact, and social cohesion. This note examines the landscape of local reservation laws across Indian states.

Local Reservations in Indian States:

1. Karnataka State Employment of Local Candidates in the Industries, Factories, and Other Establishments Bill, 2024 –
2. 50% reservation for locals in management positions
3. 70% reservation for locals in non-management roles
4. Kannada proficiency requirement (secondary school certificate or proficiency test)
5. Mandates training for local candidates if qualified locals are unavailable, with a three-year training window in collaboration with the government
6. Allows for relaxation of rules if sufficient local candidates are unavailable, with specific relaxation limits
7. Establishments must report compliance to a nodal agency

• Haryana State Employment of Local Candidates Act (2020) –
• Required 75% reservation for locals in private jobs with monthly salaries under ₹30,000
• Outcome: Struck down by the Punjab and Haryana High Court in 2023 for violating Articles 14 and 19 of the Constitution (equality and freedom), exceeding state authority, and potentially hindering economic growth

• Andhra Pradesh Employment of Local Candidates in Industries/Factories Act (2019) –
• Mandated 75% reservation for locals in private sector jobs
• Outcome: Faced criticism for potentially deterring investment, and the Andhra Pradesh High Court suggested it “may be unconstitutional”

 Key Issues and Concerns –

1. Constitutional Challenges: Potential violation of fundamental rights (equality and freedom). Questions about state authority to impose restrictions on private businesses
2. Economic Impact: Concerns about deterring investment and business growth. Potential relocation of companies to states with more flexible labor laws
3. Skill Mismatch and Labor Market Efficiency: Availability of qualified local candidates for various job roles. Need for extensive training and skill development programs
4. Migration and National Unity: Tension between local aspirations and national unity. Impact on inter-state migration and labor mobility
5. Underlying Socio-economic Factors: India’s persistent job crisis and widening regional disparities. Political accountability for lack of development in some states
6. Industry Preferences and Labor Dynamics: Tendency of industries to prefer migrant workers for unskilled jobs. Concerns about union formation and wage depression among local workers
7. Implementation Challenges: Defining “local” candidates (birth, domicile, or residence duration). Monitoring and enforcing compliance in the private sector

 Proposed Solutions and Considerations –

1. National Debate: Engage political leaders, corporate sector, and civil society in addressing India’s job crisis and creating an inclusive economic growth model.
2. Enhanced Political Accountability: Address root causes of distress migration and regional imbalances at both state and national levels.
3. National Development Council: Revive to provide a platform for addressing inter-state disparities and facilitate center-state coordination on development issues.
4. Balancing Federalism and National Unity: Develop institutional mechanisms to address regional aspirations and promote political maturity in center-state relations.
5. Corporate Sector Accountability: Ensure fair working standards for all workers, including migrants, and prevent exploitation.
6. Rethinking Policies: Evaluate and improve skilling initiatives and reassess production-linked incentive schemes for job creation.
7. Focused Regional Development: Invest in infrastructure and education in less developed regions to promote balanced industrial growth across states.

While local reservation bills aim to address unemployment and regional disparities, they raise complex constitutional, economic, and social questions. These issues reflect deeper structural problems in India’s economy and governance. A comprehensive approach addressing the root causes of unemployment, regional imbalances, and distress migration may be more effective than reservation policies alone. Balancing local aspirations with national economic goals remains a significant challenge for policymakers.

• A nine-judge Constitution Bench held by an 8:1 majority that Parliament cannot limit the power of State legislatures to tax mineral-bearing lands and quarries.
• The ruling emphasised that any dilution in the taxing powers of State legislatures would impede their ability to raise revenues and deliver welfare schemes.
• The verdict highlighted that mineral-rich States such as Chhattisgarh, Jharkhand, and Odisha have per capita incomes below the national average.
• It was stated that Parliament, through the Mines and Minerals (Development and Regulation) Act of 1957, cannot restrict States from legislating on mining land and quarry taxation.
• The court held that royalty paid by mining leaseholders to States is not a tax but a contractual consideration.
• The dissenting opinion stated that States’ power to tax under Entry 49 did not include “mineral-bearing lands” but agreed that royalty is not a tax.
• It was noted that Entries 50 and 49 address distinct subjects and operate in different fields.

Dig Deeper: What is Entry 54 of the Union List under Schedule Seven of Indian Constitution?

• In July 2023, the Kerala government appointed a senior IAS officer as the officer in charge of “external cooperation.”
• According to the Constitution of India, under the 7th Schedule, Union List, Item 10, foreign affairs and all matters involving relations with foreign countries are exclusively managed by the Union Government.

• The MEA spokesperson highlighted the following key points:
• Foreign policy formulation is the sole responsibility of the Central government.
• Matters of foreign affairs are not Concurrent or State subjects
• The Kerala government’s decision aimed to address issues pertinent to diaspora, foreign investment, and other related matters.
• However, the MEA stressed that foreign policy remains exclusively within the Central government’s purview.

Dig Deeper: Which state in India has the largest diaspora population worldwide and receives the highest remittances?

• The Kerala High Court has initiated a new committee, ‘Welfare, Happiness, and Grievances of Judicial Officers of District Judiciary’ to address the professional grievances of judicial officers in the state.
• It is headed by a judge of the Kerala High Court.
• The formation comes amid resentment among judicial officers over the High Court’s decision to seek explanations from officers who took significant leave in the past year.
• The Judicial Officers Association criticized the High Court’s decision, which affected around 100 officers. About 60% of the 600 judicial officers in Kerala are women.
• The High Court introduced a mentor system for officers on a zonal basis.

Dig Deeper: Read the Articles of the Constitution which regulate the organization of subordinate courts and ensure their independence from the executive.

• President Droupadi Murmu has renamed two significant halls at Rashtrapati Bhavan. Durbar Hall is now Ganatantra Mandap (Republic Hall), and Ashok Hall is now Ashok Mandap.
• Durbar Hall, a venue for key ceremonies and national awards, has been renamed to reflect India’s republican values.
• The term ‘Durbar’ refers to assemblies of Indian rulers and the British, losing relevance after India became a Republic (Ganatantra).
• The concept of Ganatantra has been deeply rooted in Indian society since ancient times, making Ganatantra Mandap an appropriate name.
• Originally a ballroom, Ashok Hall’s renaming maintains its symbolic significance. ‘Ashok’ signifies being free from suffering and sorrow and refers to Emperor Ashok, a symbol of unity and peaceful coexistence.
• The National Emblem of India is the lion capital of Ashok from Sarnath.
• Renaming these halls aims to bring uniformity in language, remove traces of anglicisation, and uphold the values associated with Ashok.

Dig Deeper: Read about various renaming initiatives like Mughal Garden to Amrit Udyan and Race Course Road to Lok Kalyan Marg.

• The revamped Model Skill Loan Scheme increased the eligible loan size for high-end skilling courses to ₹7.5 lakh from ₹1.5 lakh.
• The earlier Credit Guarantee Fund Scheme for Skill Development, notified in November 2015, faced multiple challenges.
• The low utilisation was attributed to the low loan limit of ₹1.5 lakh, inadequate for high-cost courses due to inflation.
• The new scheme addresses issues by lending networks beyond Indian Banking Association (IBA) banks to include Non-Banking Financial Companies (NBFCs) and small finance banks.
• This broader network aims to improve access to more skill courses and increase the uptake of loans by both private and public sector banks.

Dig Deeper: Read about PM Kaushal Vikas Yojana and recently proposed changes.