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With New Law in Place, Start-ups In Haryana Are Reconsidering Expansion Plans

The New Haryana State Employment of Local Candidates Act, 2020, is being considered a hindrance in employment for existing and upcoming companies.

Stipulating 75% job reservation for local residents with a monthly salary of up to Rs 50,000 in the private sector, The New Haryana State Employment of Local Candidates Act, 2020, is being considered a hindrance in employment for existing and upcoming companies. This is largely true because 67.3% of start-up employees in the state earn less than INR 50,000 a month. According to a NASSCOM survey, Startups will look at expanding their operations to other states, which do not have such laws. 

More than 40% of the start-ups in Haryana are involved in EdTech or Deeptech. These sectors need highly skilled talent, which may not be available in the local pool of candidates. The move would impact nearly 1.5 lakh existing jobs in the IT sector, which could have a severe impact in 1-2 years with other long-term implications. Start-ups want the government to completely do away with the law or exempt them from it. They have also suggested reducing the salary threshold to below Rs 20,00 and lowering the reservation of localities to anywhere between 10-30%. The law may undermine the position of Gurugram as a start-up hub if there is a mass exodus of start-ups, which will not only reduce employment but also the investment and talent pool.



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