Karnataka job reservation bill ‘short-sighted’, ‘regressive’; industry experts demand withdrawal

NEW DELHI: Industry experts expressed disappointment and objected to the Karnataka job reservation bill mandating quota for locals in the private sector. The state cabinet recently cleared the Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024, making it compulsory for private companies to reserve jobs for Kannadigas.

The Karnataka job reservation bill reserves 50 percent administrative posts and 75% non-administrative posts for local candidates in private firms and other organisations in the state. Candidates who don’t possess high school education from Karnataka will have to take a language proficiency test and the government may appoint an officer to keep a check on the compliance of the provisions, as per the bill.

Calling the move ‘short-sighted’ and ‘regressive’, the entrepreneurs and tech bodies demanded withdrawal of the bill. Entrepreneur and former chief finance officer of Infosys, TV Mohandas Pai, dubbed the bill as 'fascist.' Taking to X, he said, "This bill should be junked. It is discriminatory, regressive and against the constitution. Jairam Ramesh (Congress leader) is govt to certify who we are? This is a fascist bill as in Animal Farm, unbelievable that INC India can come up with a bill like this- a govt officer will sit on recruitment committees of private sector? People have to take a language test?"

Pharma company Biocon’s managing director Kiran Mazumdar Shaw said in a post, "As a tech hub we need skilled talent and whilst the aim is to provide jobs for locals, we must not affect our leading position in technology by this move. There must be caveats that exempt highly skilled recruitment from this policy."

The co-chairman of Karnataka region of the Associated Chambers of Commerce and Industry of India (ASSOCHAM), R K Misra, wrote on X, "Another genius move from Govt of Karnataka. Mandate local reservation and appoint government officers in every company to monitor. This will scare Indian IT & GCCs. Short-sighted."

Private firms demand withdrawal

The National Association of Software and Service Companies (NASSCOM) expressed disappointment and concern over the bill. In a statement, the tech association said, "Nasscom and its members are disappointed and express deep concern regarding the passage of the Karnataka State Employment of Local Industries Factories Establishment Act Bill, 2024."

The association noted that the tech sector contributes 25% of the state's Gross Domestic Product (GDP), houses a quarter of the country's digital talent, over 11,000 start-ups and 30% of the total Global Capacity Centres. "Restrictions could force companies to relocate as local skilled talent becomes scarce," the body cautioned. In today's highly competitive landscape, knowledge-led businesses will locate where talent is available and attracting skilled workers is crucial for success, it pointed out.

Globally, there is a huge shortage for skilled talent and Karnataka despite the large pool, is no exception. The technology sector has been crucial to Karnataka's economic and social development, with Bengaluru known globally as India's Silicon Valley, NASSCOM said, and expressed "serious concern" about the provisions of this bill and urged the state government to withdraw it.

"The bill's provisions threaten to reverse this progress, drive away companies, and stifle startups, especially when more global firms (GCCs) are looking to invest in the state. At the same time, the restrictions could force companies to relocate as local skilled talent becomes scarce." The association said it is seeking an urgent meeting for industry representatives with state authorities to raise concerns and prevent the state's progress from being derailed.