K’taka pvt jobs quota on hold after backlash
Karnataka halts bill reserving private sector jobs for locals amid backlash. Industry warns of relocation if passed. Government to consult further.
Karnataka on Wednesday put on hold a controversial bill reserving jobs for locals in the private sector after sweeping backlash over the draft legislation approved by the state cabinet the day before, even as industry bodies and business leaders pointed out that the proposal was “unconstitutional” and that, if passed as a law, it would force companies to move away from the state.
On Tuesday, the state’s cabinet approved a bill that reserves 50% of all management jobs and 70% of all non-management ones in private companies for locals, with companies having up to three years to meet the quota.
While the state’s IT minister Priyank Kharge said nothing would be done without consulting industry, it wasn’t clear why the government rushed through its announcement. Industry bodies said they were taken by surprise and that they had not been consulted. Ramesh Chandra Lahoti, president of the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), criticised the lack of consultation with key industry bodies before drafting the legislation.
Many locals, especially those who have not benefited from the IT boom in Bengaluru and other parts of Karnataka, fear their culture is under threat from “outsiders” -- one reason for the huge brouhaha over signboards recently.
On Wednesday, as pressure from industry mounted, Karnataka chief minister Siddaramaiah deleted one of his posts on social media platform X on the issue. Later in the day, he walked back the bill.
“The draft bill intended to provide reservations for Kannadigas in private sector companies, industries, and enterprises is still in the preparation stage.A comprehensive discussion will be held in the next cabinet meeting to make a final decision,” the chief minister posted on X.
A statement issued by the office of the chief minister confirmed the development. ”The bill approved by the cabinet to provide reservation for Kannadigas in private sector organisations, industries and enterprises has been temporarily put on hold. This will be revisited and decided in the coming days,” the statement said.
State industries minister MB Patil reposted the chief minister’s post and said, “Honble CM has taken due cognizance. Bill is withheld until further consultations and due diligence. Industry leaders needn’t panic as assured.The government is committed to further creation of jobs, and furthermore for Kannadigas, however in a more amicable manner.”
The National Association of Software and Service Companies (Nasscom), which represents India’s technology sector, expressed deep apprehension about the bill., warning that it could force companies to relocate due to a shortage of local skilled talent, potentially driving global firms away from Karnataka and stifling the growth of startups.
“The technology sector has been crucial to Karnataka’s economic and social development, with Bengaluru known globally as India’s Silicon Valley. It’s deeply disturbing to see this kind of bill which will not only hamper the growth of the industry, impact jobs and the global brand for the state,” the body said in a statement.
It pointed out that technology sector contributes almost 25% of the state GDP and has played a key role in enabling higher growth for the state, and higher per capita income than the national average. With over a quarter of India’s digital talent, the state houses over 30% of the Global Capability Centres (the development arms of MNCs) in the country and around 11000 start-ups.
“Nasscom members are seriously concerned about the provisions of this bill and urge the state government to withdraw the bill. The bill’s provisions threaten to reverse this progress, drive away companies, and stifle startups, especially when more global firms are looking to invest in the state,” Nasscom said.
Kiran Mazumdar Shaw, chairperson of Biocon, said there is a need for skilled talent to maintain Karnataka’s reputation as a leading tech hub. “As a tech hub, we need skilled talent. While the goal is to provide jobs for locals, we must not compromise our leading position in technology. There should be exemptions for highly skilled recruitment from this policy,” she said on X, tagging the chief minister and the IT minister.
“The provisions for penalties should be reconsidered. Imposing such stringent laws isn’t right, especially considering that we are the primary job creators in the private sector.”
A veteran of Bengaluru’s IT industry, TV Mohandas Pai slammed the state government saying that skilling Kannadigas is the only way to ensure jobs . “If you want to promote Kannadigas for jobs, spend more money on higher education. Give training to them. Spend more money on skill development. Spend more money on internships, spend more money on apprenticeship programs. So they all become skilled. Not like this. What are you trying to achieve by this?”
Karnataka deputy chief minister D K Shivakumar said investors need not worry and that the government will listen to them.
Kharge said that there is no need for panic. “They (industry bodies and leaders) have expressed their thoughts through social media and the media. But these are the very same industry leaders who have sat with us across the table and helped us draft policies. Today, if Karnataka is a powerhouse, we also owe it to these industry leaders for advising us. So, we will seek their counsel and we will act accordingly.”
State heavy industries minister, M B Patil, said that the interests of the industry will be protected. “Keeping the interests of Kannadigas paramount, I will discuss this issue with Chief Minister Siddaramaiah, IT Minister, Law Minister, and Labour Minister. We will have wider consultations. We will ensure that the interests of Kannadigas are protected, alongside those of the industries,” he posted on X.
Andhra Pradesh, Haryana and Jharkhand have similar laws in place that have all been challenged before their respective high courts. The Punjab and Haryana high court last year quashed the Haryana law providing for 75% reservation for locals in private sector for a certain category of jobs , saying it was in violation of the Article 14 and 19 of Constitution which provides for freedom of employment.