A surprise move by the Karnataka Congress government to reserve jobs in the private sector for locals has faced sharp criticism from industry leaders, who argue that the measure will deter talent and investment from flowing into the state. 

Many industry leaders said the state government’s decision will impact business activities and may even force some to relocate to other states. 

Kiran Mazumdar-Shaw, executive chairperson of Biocon Limited, wrote 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”. 

Former Infosys CFO TV Mohandas Pai also slammed the draft bill. “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 the private sector. People must take a language test?” he wrote on X. 

On July 15, the Karnataka cabinet approved a draft bill mandating that 50 per cent of management jobs and 70 per cent of non-management roles to be reserved for locals in the private sector.  

In a now-deleted post, CM Siddaramaiah endorsed a 100% quota for Kannadigas in Group C and Group D jobs (blue-collar workers) in the private sector. 

Industries minister MB Patil also posted to X saying, “India is currently experiencing a manufacturing and industrial revolution driven by the global China Plus One policy. 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. Keeping the interests of Kannadigas paramount, I will discuss this issue with the Hon’ble CM, IT-BT Minister, Law Minister, and Labour Minister.”  

He added that there will be wider consultations to protect the interests of Kannadigas and industries. “Karnataka is a progressive state, and we cannot afford to lose in this once-in-a-century race of industrialization. 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 said in the same post. 

Nasscom concerns

On the other hand, IT industry body Nasscom expressed concern about the Karnataka State Employment of Local Industries Factories Establishment Act Bill, 2024, pointing out that the restrictions could force companies to relocate as local skilled talent becomes scarce.

“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,” said Nasscom.

Adding that the tech sector contributes to 25 per cent of the state GDP, it said the state houses a quarter of the country’s digital talent, over 11,000 startups and 30 per cent of the total GCCs.

 “Globally, there is a huge shortage for skilled talent and Karnataka despite the large pool, is no exception. 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,” it added.

Nasscom seeks an urgent meeting for industry representatives and state authorities to discuss the concerns.

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