Karnataka government temporarily halted the reservation bill for Kannadigas in private companies, following significant backlash from business leaders and tech industry figures.
The Karnataka State Employment of Local Candidates in the Industries, Factories, and Other Establishments Bill, 2024, which was approved by the state Cabinet on Monday, was anticipated to be presented in the Assembly on Thursday.
A statement from the Chief Minister's Office on Wednesday noted, "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."
Chief Minister Siddaramaiah also addressed the issue on X: "The bill intended to implement reservation for Kannadigas in private sector institutions, industries and enterprises is still in the preparation stage. A final decision will be taken after comprehensive discussion in the next cabinet meeting."
The Bill stipulates that "Any industry, factory or other establishments shall appoint 50 per cent of local candidates in management categories and 70 per cent in non-management categories."
Industry leaders reacted strongly, criticizing the proposed quotas as "fascist" and "short-sighted."
TV Mohandas Pai, former CFO of Infosys, condemned the bill as "regressive," stating on 'X', "This bill should be junked. It is discriminatory, regressive and against the constitution... This is a fascist bill as in Animal Farm, unbelievable that @INCIndia 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?"
Kiran Mazumdar Shaw, Managing Director of Biocon, emphasized the need for skilled talent in the tech hub, warning that while the aim is to create local jobs, the move could jeopardize Karnataka's leading position in technology. She suggested exemptions for highly skilled recruitment.
ASSOCHAM Karnataka co-chairman R K Misra also criticized the move on 'X': "Another genius move from Govt of Karnataka. Mandate LOCAL RESERVATION & APPOINT GOVT OFFICER IN EVERY COMPANY to monitor. This will scare Indian IT & GCCs. Short-sighted."
The National Association of Software and Service Companies (NASSCOM) warned that "the restrictions could force companies to relocate as local skilled talent becomes scarce."
Karnataka's bill resembles a similar one by the Haryana government, which mandated 75 percent reservation for residents in private sector jobs but was struck down by the Punjab and Haryana High Court on November 17, 2023.
The Bill requires private firms to reserve jobs for Kannadigas: "Any industry, factory or other establishments shall appoint fifty per cent of local candidates in management categories and seventy per cent in non-management categories."
Chief Minister Siddaramaiah on Wednesday deleted an 'X' post about '100 percent reservation for Kannadigas' and clarified in another post that the cabinet approved the bill to fix 50 percent reservation for administrative posts and 75 percent for non-administrative posts for Kannadigas in private industries and other organisations.
In response to the criticism, Karnataka Infrastructure Development and Medium and Heavy Industries Minister M B Patil and Information Technology and Biotechnology Minister Priyank Kharge stated that the government would consult widely to balance the interests of Kannadigas and the industries.
"We will ensure that the interests of Kannadigas are protected, alongside those of the industries," Patil said on 'X'. He emphasized that Karnataka is a progressive state and must remain competitive in the industrialization race.
Patil assured, "We will make sure that everyone's interests are safeguarded. The industries are assured that they need not have any fear or apprehensions and can rest assured." He added that there would be discussions with the industry to address concerns.
The development also caught the attention of neighboring Andhra Pradesh, where IT minister Nara Lokesh invited NASSCOM to consider relocating to Vizag, offering superior facilities, uninterrupted power, infrastructure, and skilled talent without government restrictions.
Priyank Kharge reassured NASSCOM that the draft bill would include industry recommendations and would withstand legal scrutiny, stating, "This is your Government and as always we are just a call away."
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