Gurugram Dilemma: Haryana’s Protectionist Policy Sucks the Joy Out of Centre’s Historic BPO Reforms

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A Bill aimed at providing 75% reservation for locals in private sector jobs was passed by the Haryana Assembly on Thursday. The move by the Haryana government has come at a time when the economy has started to come on track after months of coronavirus-induced lockdown. Many jobs were lost during the lockdown period and Gurugram, a hub of business process outsourcing (BPO) and IT companies where people from across the country come to seek jobs, was no exception. Owing to this ill-timed move, many job seekers in NCR are expected to face difficulties.

While this Bill will deal a blow to job seekers from all sections as private companies not only employ highly skilled people but also support staff, including security guards, housekeeping, O&M, etc, it also will disincentivise companies to grow their businesses in Haryana. Private companies recruit people based on their requirements and shortlist candidates from a large pool of job applicants. Proponents of the new Bill may argue that it provides companies with the exemption clause. This clause can be used when companies can’t find suitable candidates among local people.

For this, a designated officer will be appointed who will rule on companies invoking the exemption clause, but the loophole in this provision is that the designated offer of the government may overrule the exemption claim and also direct the company concerned to train local candidates and impart them with the required skills.

BPO companies are competing internationally to secure and grow business, helping the overall economy. Now many companies will look to shift their growth to other regions within India with a higher degree of ease of doing business. In the long run, Haryana will lose the edge they have created over so many decades.

Ironically, while the Haryana government is increasing the compliance burden on BPOs and IT companies, the central government led by Prime Minister Narendra Modi, on the other hand, is working to improve the Ease of Doing Business of the IT Industry. The central government has simplified the Other Service Provider (OSP) guidelines of the Department of Telecom, significantly reducing the compliance burden of the BPO industry.

The BPOs which deal with data-related work have been taken out of the ambit of OSP regulations. In addition to this, the Centre has also done away with requirements such as deposit of bank guarantees, a requirement for static IPs, frequent reporting obligations, publication of network diagram, penal provisions, etc. All of these stand to strengthen Indian BPO and KPO industry in years to come.

Haryana’s 75% reservation is the kind of protectionism that we can do without, particularly at a time when industry, government and society at large need work together to pull the economy out of Covid-19 slowdown. On the contrary, the Centre’s OSP reforms are the need of the hour and come at a time when Indian BPO industry needs competitive advantage in post-Corona world order.

We hope this will not be a case of one step forward and two steps back for the companies BPOs and KPOs based in Gurugram.

Haryana’s move contravenes Article 14 and 19 of the Constitution and should require the President’s nod to become a law. We in BPO and IT industry in Gurugram are hoping that when the Bill is presented before the President of India, his kind office will protect the interest of economy and welfare for all.

It would be even better if the Haryana government reconsiders this move and focuses on imparting skills to local manpower to make them more competitive, not just within Haryana but anywhere in India. The current Bill creates a scenario which may shift BPO and IT industry to destinations like Bangalore, Hyderabad, Pune and Noida, Gurugram’s cousin in NCR.

The author is Co-Founder and Chief Operating Officer at MattsenKumar, a BPO based in Gurugram. Views expressed are personal