The Political Fix: Will Andhra’s 75% jobs-for-locals quota set off a wave of parochial politics?

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On to today’s piece:

The Big Story: Home work

The Karnataka soap opera still has more twists but it has been going on so long we feared you might get bored – and other developments would end up being ignored. So today, we are looking at Andhra Pradesh next door. If it is Karnataka you care about though, read my piece on how the events of Karnataka prove that the Bharatiya Janata Party’s claims of being different or cleaner than any other party are hollow.

YSR Congress chief Jaganmohan Reddy won a massive mandate in the Assembly polls that happened alongside the General Elections in Andra Pradesh this year. Reddy’s party captured 151 one of 175 seats in the assembly, snuffing out any ambitions that may have been held by former Andhra Chief Minister Chandrababu Naidu.

Now he wants to remake the state as well. Although the Telugu states are actually undercovered in the English press, relative to the rest of the South, there has been a steady drip-drip of headlines from Andhra about Jagan’s big moves – many of which are aimed at undoing the previous government’s initiatives.

The Assembly passed a bill allowing for judicial review of any infrastructure projects that cost more than Rs 100 crore. Reddy has moved to have the Andhra government take over the sale of liquor, which will soon be allowed only from state shops. The state also wants to renegotiate contracts with power companies.

Then there is the question of Amravati. It was supposed to be the brand new capital of the rump Andhra state, after former Chief Minister Chandrababu Naidu decided not to share Hyderabad, the former capital, with Telanga, the state carved out of the old Andhra Pradesh in 2014. Naidu envisioned it as a planned, world-class city and pull in huge amounts of investment.

Instead, its fate is now uncertain. Earlier this month, the World Bank dropped a plan to lend $300 million to help build the new capital, after the Indian government withdrew its request for finance.

This happened because the World Bank had asked for permission to conduct an investigation into irregularities during Naidu’s time – including allegations made by Reddy and his party. But the Union government did not want the Bank investigating an Indian state. After the World Bank pulled out, so did the Asian Infrastructure Investment Bank, which means for now, there is simply not enough capital for Amravati to be built. But Reddy doesn’t seem too perturbed.

However, the development that might have the biggest impact is a Bill passed by the Assembly that reserves 75% of jobs in industries and factories for locals. This move has been hailed by many in Andhra Pradesh, labeled as populist by others and criticised heavily by industry watchers. It is bound to have major repercussions. The Madhya Pradesh government has promised something similar, and politicians are bound to raise the same demand in other parts of the country.

Two elements are key here. One, the reservations are in the private sector. Two, they are based on parochialism, rather than addressing social backwardness (although the two might be connected).

In the past, rules like this were traditionally limited to the public sector, not just because it usually provided large amounts of employment but also because of the fear that private companies would simply not invest in a place that has too many limitations on labour availability.

The parochial element, meanwhile, raises the hackles of those who would like to see India as a one large market where people are free to move as they wish, even if that means labour for large projects often being sourced from other parts of the country.

From a political angle, Reddy’s move makes sense. With anxiety growing all over the country about the lack of jobs and the fear that the benefits of development will go to others, the new rule tries to head off these concerns. It projects Reddy as someone willing to go the extra mile for his people.

But with all this renegotiation of contracts, judicial review and labour rules, will companies want to invest in the state at all? And beyond Andhra, will the passage of such a law unleash more parochial politics elsewhere?

What do you think of Andhra Pradesh’s new jobs-for-locals rule? Write to rohan@scroll.in

Reader’s note

Excerpts of a message from reader Shyam Narayanan, in response to last week’s Political Fix on the Anti-Defection Law:

“There is absolutely no doubt that the anti-defection law should go. But the problem is not simply the presence or absence thereof of an anti-defection law but the parliamentary system as a whole. As long as the executive is dependent on the legislature with the most blurriest line of checks and balances, we are always left with one of two options viz a completely unstable government which has left national agenda to the dogs in favour of “coalition dharma” or a totally autocratic one with an executive commanding majority (God forbid, a super majority) and totally in charge of both drafting passing and implementation of laws with absolute certainty of tenure. Simply abolishing the anti-defection law reverts what is now a wholesale aya ram gaya ram (The 1/3rd number of parliamentary members rule) back to a retail aya ram gaya ram.

In fact what should be booted out along with the anti defection law is the entire parliamentary system and replace it with a presidential system with a directly elected executive and directly elected legislature each having defined spheres of work independent of each other but having the right kind of checks and balances not only in letter but also in spirit...

Imagine having a legislator from your area actually going to the parliament or the assembly to purely draft and pass laws instead waiting for his turn to become cabinet minister and a mere yes man to whatever the executive brings to the table or on the other hand sit sulking in the opposition and oppose everything a government brings.”

Catch-up

The Karnataka drama somewhat came to an end on Friday after the Congress-JD(S) government fell because it did not get enough support in a trust vote. BJP leader BS Yeddyurappa has staked claim to be chief minister and needs to prove his majority on the floor, even as the rebel MLAs have been disqualified.

So, is India going to sell sovereign bonds or not? Reports emerged over the last week that the government was reconsidering the idea to raise funds abroad, but finance minister Nirmala Sitharaman then gave a statement saying that there was no rethink of the much criticised move.

The speculation came after Finance Secretary SC Garg was moved to a different role and promptly asked to get retirement instead. This prompted some questions about whether he was being blamed or scapegoated for Budget proposals that have made the markets unhappy.

After butting heads with the US government over proposed rules that brought protectionism to data, India may be softening its position. The much-awaited data protection bill may take on board American concerns after much lobbying by its giant tech companies.

The intention to carry out labour reform remains, though the government isn’t planning to make it easier for companies to fire workers for now. Instead, it may consider laying down fixed-term employment norms instead.

Special Report

Did you know, a population half the size of Switzerland – i.e. the entire city of Kolkata – might be declared stateless by India? In The Final Count series, Ipsita Chakravarty and Arunabh Saikia cover every aspect of Assam’s National Register of Citizens process, with all of its bureaucratic bungling and personal trauma. Read all the stories in the series here, and sign up to get every story in your inbox here.

Reports, analysis & opinions

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The Adani Group was awarded contracts to run six Indian airports, even though the Finance Ministry recommended not giving more than two to the same bidder. Jagriti Chandra reports on how key suggestions from a finance ministry panel were brushed aside.

There is no such thing as class consciousness in Indian politics, with the rich and the poor often voting for the same parties. That is the conclusion Roshan Kishore draws in this piece that also examines why that is the case.

The changes passed to the Right to Information Act in Parliament last week are unconstitutional. So says Gautam Bhatia, arguing that guaranteeing a right to information also means ensure that the right actually can be used.