Karnataka Job Quota May Force "Companies To Relocate": Software Body

A day after the Karnataka cabinet approved a bill mandating reservation for locals in the private sector jobs, software body Nasscom has sought its withdrawal saying the provisions "threaten to drive away companies".

The bill enforces 50 percent reservation for administrative posts and 75 percent for non-administrative posts for Kannadigas in private industries and has sparked controversy after it was announced by Chief Minister Siddaramaiah last night.

Nasscom, representing India's $200 billion technology industry, said the restrictions under the 'Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill' could force companies to relocate as "local skilled talent becomes scarce".

"The bill's provisions threaten to 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," said the IT industry's top body.

The contentious bill, on the appointment of 'local candidates', says, "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." If the candidates do not possess a secondary school certificate with Kannada as a language, they must pass a Kannada proficiency test as specified by the 'Nodal Agency', it says.

The bill is slated to be tabled in the Assembly on Thursday.

Expressing serious concerns about the provisions of the bill, Nasscom urged the Karnataka government to withdraw it.

It sought an urgent meeting of industry representatives with state authorities to discuss their concerns and "prevent Karnataka's progress from being derailed".

Globally, there is a huge shortage of skilled talent and Karnataka despite the large pool, is no exception, the body said.

"For states to become a key technology hub a dual strategy is key - magnet for best talent worldwide and focussed investment in building a strong talent pool within the state through formal and vocational channels," Nasscom added.

Earlier, Chief Minister Siddaramaiah indicated in a post on X that the government would seek 100 percent reservation for Kannadigas in select categories. He later amended his post to omit the '100 percent' provision after his post sparked a massive uproar.

The Chief Minister also asserted that it is the government's priority to look after the welfare of Kannadigas. "It is our government's wish that the Kannadigas should avoid being deprived of jobs in the land of Kannada and should be allowed to build a comfortable life in the motherland. We are a pro-Kannada government. Our priority is to look after the welfare of the Kannadigas," he said on X.

Several industry leaders in the state objected to the move saying that it was "discriminatory" and raised apprehensions that the tech industry may suffer.

Karnataka Commerce and Industries Minister MB Patil said that they will have wide consultations to resolve the confusion and ensure that the interests of Kannadigas are protected along with those of industries after industrialists expressed their apprehensions about the proposed bill.

State Labor Minister Santosh S Lad also clarified that if adequate skills are not available in the state, people can be outsourced from other states.

The technology sector contributes almost 25 per cent of Karnataka's GDP and has played a key role in enabling higher growth and higher per capita income than the national average.

With over a quarter of India's digital talent, Karnataka houses over 30 per cent of the total GCCs and around 11,000 startups.