UP govt decision for reservation leaves industry chambers divided

New Delhi, Aug 11 (UNI) The decision of UP Government for voluntary reservation of 30 per cent of jobs for private sector investments in the state, saw industry bodies being divided on the issue with Assocham calling the decision as ''apt'' and Ficci being not convinced with the decision.

''The unique features of the policy are that those who don't want to avail incentives/tax concessions from the state, they do not fall under the purview of the job reservation policy,'' said Assocham President Venugopal N Dhoot in a statement.

Industry FICCI in a statement said, the State of UP, has the potential to become a leading industrial centre of India, given its rich resource base and large labour force. However, the Annual Survey of Industries data, the last available for the period of 2004-2005 shows that UP is ranked 7th amongst the States in net value added.

FICCI points out that UP has half the number of factories as Maharashtra and even less than half the number of factories in Tamil Nadu. It has one-third of the value of fixed capital relative to Maharashtra, one-third the value of productive capital and almost one-third the value of invested capital, compared to Maharashtra (ranked No 1 in net value added).

Given this scenario, FICCI says it wonders as to how the current initiative of the State Government of 'voluntary' reservation of 30 per cent of jobs in the private sector for fresh investment into the state, would make the state more competitive vis-a-vis its competitor six states which rank higher than UP.

The effectiveness of this measure, says FICCI for those who voluntarily choose to avail concessions from the State and reservation thereof, will depend on the availability of qualified candidates for an array of positions.

For this to happen successfully, a massive training and skill formation movement across the State would have to be initiated simultaneously, targeting the SC/ST, OBC, minorities and economically backward members of the upper caste, added FICCI.

Mr Dhoot of Assocham, however, added that the agenda push forward for 30 per cent jobs, 10 per cent each for Scheduled Castes (SCs) and Other Backward Castes (OBCs) and backward religious minorities and economically weaker sections from the upper castes will not make the industry uncompetitive in any way.

There is no dearth of talent from any sections of society and this will, indeed, help government to implement its agenda for 'inclusive growth', Mr Dhoot said.

The Uttar Pradesh government has introduced voluntary reservation for backward classes in the private sector, where the firms introducing reservation will be able to avail of several tax and other benefits to set up their units.

This is the first time a state is implementing reservation in the private sector through a voluntary agreement in return for tax benefits.

According to the proposal, private investors who want to avail of the tax benefits will have to enter into an agreement with the government to implement the 30 per cent reservation in their establishments, with 10 per cent reservation each for SCs, OBCs and backward religious minorities and the remaining 10 per cent for economically weaker sections of the upper castes.

The voluntary reservation scheme would also be applicable in industrial units set up with the assistance of the government, educational institutions, infrastructure facilities, service sector projects and disinvested units. The policy will be applicable only for new units to be set up in the state.

UNI