The Karnataka government has temporarily suspended its controversial bill proposing significant job reservations for “local candidates” in the private sector. The decision follows intense backlash from industry bodies and the business community.
Late Wednesday night, the Chief Minister’s Office (CMO) announced the suspension of the bill, which had been approved by the state cabinet the previous day. The proposed legislation aimed to reserve 50% of managerial roles and 70% of non-managerial positions for locals in business establishments across the state.
The announcement was marred by poor communication. The Chief Minister’s social media handle mistakenly shared a proposal from the previous BJP administration advocating for 100% reservation in certain private sector jobs, which was later retracted, causing confusion and criticism.
Industry reactions were swift and severe. The National Association of Software and Service Companies (Nasscom) raised concerns that the bill could harm Karnataka’s reputation as a global technology hub, potentially discouraging investment and driving companies away. Prominent figures such as Kiran Mazumdar-Shaw, Executive Chairperson of Biocon, and former Infosys CFO TV Mohandas Pai criticized the bill as discriminatory and detrimental to the state’s technological leadership.
The Federation of Karnataka Chambers of Commerce and Industries also expressed frustration over the lack of prior consultation with the private sector before the bill’s introduction.
In response, Deputy Chief Minister D. K. Shivakumar, Industries Minister M. B. Patil, and IT Minister Priyank Kharge engaged in damage control. They pledged to hold extensive consultations with industry leaders and stakeholders to refine the bill. Kharge assured that the government aims to balance local employment opportunities with maintaining Karnataka’s attractiveness for investors. Patil committed to working closely with Chief Minister Siddaramaiah to address industry concerns and adjust the proposal as needed.
The bill, titled the “Karnataka State Employment of Local Industries Factories Establishment Act Bill, 2024,” defines a local as someone who has been domiciled in Karnataka for at least 15 years and meets certain criteria, including proficiency in Kannada. Previous iterations of local job quota proposals have been considered but not enacted.
