A bill mandating reservations for locals in private sector establishments in Karnataka has been withheld until further consultations are conducted, said state Minister for Commerce and Industries MB Patil on Wednesday.
On Monday, the state Cabinet cleared the Karnataka State Employment of Local Candidates in the Industries, Factories, and Other Establishments Bill, 2024. It was expected to be introduced in the ongoing Assembly session.
The bill mandated 50% reservation in jobs in management positions and 75% in non-management positions for locals in industries, factories and other establishments.
Technology industry body National Association of Software and Service Companies had expressed disappointment and concerns about the bill and said it could “force companies to relocate as local skilled talent becomes scarce”.
Following the criticism, Chief Minister Siddaramaiah said in a social media post that the proposed law was still at the stage of preparation.
“A comprehensive discussion will be held in the next cabinet meeting to make a final decision,” Siddaramaiah said on Wednesday.
Patil said that the Karnataka government was committed to “further creation of jobs for Kannadigas, but in a more amicable manner”.
The state commerce and industry minister added: “Industry leaders needn’t panic as assured.”
The bill
The bill cleared by the Cabinet defines a “local” as someone “born in the state of Karnataka and domiciled in the state for 15 years, capable of speaking, reading, and writing Kannada legibly, and has passed a required test conducted by the nodal agency”.
To be eligible for the scheme, a candidate has to have completed secondary school with Kannada as a language. Those who did not study Kannada in secondary school must pass a Kannada proficiency test, as specified by the nodal agency notified by the government.
If industries and establishments do not find qualified candidates, the bill said that steps should be taken in collaboration with the government within three years to train locals. Such establishments need to seek relaxation of the law’s provisions from the government.
Even in establishments and industries that are granted this relaxation, local candidates must constitute at least 25% of management positions and 50% of non-management positions.
Failure to comply with the law could result in penalties ranging from Rs 10,000 to Rs 25,000.
Opposition to bill
After the announcement, the National Association of Software and Service Companies said it was “deeply disturbing” to see this kind of a bill, which would “not only hamper the growth of the industry” but impact jobs and the global brand for the state.
The industry body noted that the technology sector contributes 25% of Karnataka’s gross domestic product, houses a quarter of the country’s digital talent, over 11,000 start-ups and 30% of the total Global Capacity Centres.
“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,” it said. “At the same time, the restrictions could force companies to relocate as local skilled talent becomes scarce.”
Biocon founder Kiran Mazumdar Shaw said the bill should include a caveat of exempting highly skilled recruitment from this policy.
“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,” she said.
Bharatiya Janata Party MLA and Leader of Opposition in Karnataka Assembly R Ashok said the bill was part of the Congress government’s “sinister politics” to divert people’s attention from a “series of scams and failures”.
The bill was approved amid public demands for reservations in private and public sector jobs in the state.
Earlier this month, Kannada organisations had held rallies across Karnataka, calling for the immediate implementation of the Sarojini Mahishi report, which recommends quotas for locals in both government and private sector jobs.
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