Industry Leaders Criticise Karnataka Government's Nod For Private Jobs Quota For Locals

The Karnataka government's move to green light the draft bill proposing to mandate reservations for local candidates in private sector companies, is being met by criticism from industry leaders. Industry stakeholders are terming the move to be short sighted, and discriminatory. 

The bill mandates all companies in the state to reserve 50% of management posts and 75% of non-management posts for local candidates. The Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024, was cleared in a cabinet meeting headed by Chief Minister Siddaramaiah. The draft bill will be tabled during the ongoing legislative session.

IT industry body nasscom is seeking withdrawal of the bill and an urgent meeting for industry representatives with state authorities to discuss the concerns. “Its 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. nasscom members are seriously concerned about the provisions of this bill and urge the state government to withdraw the bill,” it said. 

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 industry body further noted.

Criticizing the move, Kiran Mazumdar-Shaw, executive chairperson of Biocon Limited posted on X, “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.” 

Similarly, TV Mohandas Pai, Chairman, Aarian Capital, former CFO of Infosys wrote, “This bill should be junked. It is discriminatory, regressive and against the constitution. Is govt to certify who we are? This is a fascist bill as in Animal Farm, unbelievable that INC 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?” 

RK Misra, co-chairman of ASSOCHAM and co-founder of Yulu said the move is short sighted and will scare away Indian IT and GCCs. 

Apprehensions for the move is seen within CM Siddaramaiah’s cabinet too. Karnataka industries minister M.B Patil on X said that he will discuss this issue with the CM, IT-BT 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 said. 

India is currently experiencing a manufacturing and industrial revolution driven by the global China Plus One policy, he added. "In this competitive era, states like Karnataka, Maharashtra, Tamil Nadu, and Telangana are striving to be at their best. It is of utmost importance for all states to be at their competitive peak." 

After the industry backlash, the Chief Minister too on Wednesday deleted his post on X regarding the reservation for locals draft bill, indicating that the cabinet might rethink the move. 

Amid heated discussions on social media platforms over the proposed bill, Andhra Pradesh minister and TDP leader Nara Lokesh has jumped in to woo companies to setup in his state instead. Addressing nasscom, he wrote on X, "We understand your disappointment. We welcome you to expand or relocate your businesses to our IT, IT services, AI and data centre cluster at Vizag."

The Andhra government will offer the best facilities, uninterrupted power, infrastructure and suitable skilled talent for companies without any restrictions from the government, he added.