The dangers of populism

India — On Tuesday, the Haryana governor gave his assent to a bill that provides 75% reservation for locals in all private sector jobs that offer a salary of less than Rs.50,000 a month. This was an election promise of Dushyant Chautala, the Bharatiya Janata Party’s key ally in the state. Under pressure from his largely Jat base, which is currently at the forefront of the farm protests, Mr Chautala is understood to have convinced his senior ally that this was the only way for him to stick to the alliance. The political calculation aside, the law is based on the logic that reservations would boost local employment for the young and discourage migration – which the government claimed was leading to pressure on infrastructure and “proliferation of slums”. Reservations have been introduced for 10 years – but as India’s experience with reservations shows, once introduced, it is impossible to roll them back.

Haryana’s move is constitutionally suspect. A range of fundamental rights enables citizens to move freely, work anywhere in the country, and be entitled to be treated with equality and without discrimination. The trend of promising reservations for locals – this extends beyond Harayana to a range of other states which have made similar promises – is also politically and economically unwise. Taking a narrow view of electoral politics, leaders are tempted by this populist trap of offering reservations to locals, but this undermines the often neglected constitutional ideal of fraternity, which can only come from citizens from different regions engaging with each other, including in workplaces. The move will also deepen the insider versus outsider form of parochial politics. Economically, it sends a negative signal to investors, who place high premium on the ability to hire talent, at all positions, irrespective of their geographical origins.

The core problem in India’s political economy remains the lack of jobs. A secondary problem is the long-term distress in agriculture, which has reduced the social and economic status of once-dominant land-owning communities such as the Jats (and the Patidars in Gujarat). This has resulted in two trends. The first is a demand for greater reservation in state jobs. The second is a demand for locals in private sector jobs. Haryana is clearly responding to this. But like the rest of India’s political class, Haryana’s leaders are evading the real crisis of jobs to offer prescriptions which may only make the problem worse.