The Karnataka government has decided to put a hold on the proposed law mandating job reservations for local candidates in the private sector following strong opposition from top CEOs and industry bodies. The Bill, titled ‘The Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024,’ which was approved by the state Cabinet on Tuesday, has now been withheld for further discussions.
The Bill mandates 75 percent reservation in non-management jobs and 50 percent in management jobs for “local candidates” in industries, factories, and other establishments. The definition of “local candidates” includes individuals born in Karnataka or those who have lived in the state for at least 15 years and are proficient in Kannada.
Biocon founder Kiran Mazumdar Shaw expressed concerns about the impact of the proposed law on skilled recruitment, stating, “The proposed law should exempt highly skilled recruitment from this policy.” Similarly, Nasscom, an industry body representing software and service companies, warned that the Bill’s provisions would “stifle startups” and “force companies to relocate as local skilled talent becomes scarce.”
Venture capitalist Mohandas Pai took to social media to criticize the Bill, describing it as “discriminatory,” “regressive,” and “fascist.”
In response to the adverse feedback, Chief Minister Siddaramaiah announced that the draft Bill would undergo comprehensive discussion in the next Cabinet meeting before a final decision is made. “The draft Bill intended to provide reservations for Kannadigas in private sector companies, industries, and enterprises is still in the preparation stage. A comprehensive discussion will be held in the next cabinet meeting to make a final decision,” Siddaramaiah posted on social media platform X.
State Industries Minister MB Patil assured industry leaders that the Bill is “withheld until further consultations and due diligence.” He added, “Industry leaders need not panic.” Both Patil and Information Technology and Bio-Technology Minister Priyank Kharge emphasized that “wider consultations” would take place before the Bill is passed.
“No rule will be passed without wider consultations,” Kharge told The Indian Express.
Patil reiterated that the government would protect the interests of both Kannadigas and industries, saying, “We will ensure that the interests of Kannadigas are protected, alongside those of the industries.”
The Bill outlines that industries must train and engage local candidates within three years if qualified candidates are unavailable. For special cases, the Bill proposes to reduce the reservation to 50 percent in non-management and 25 percent in management jobs.
Nasscom’s statement expressed “deep concern” about the Bill and urged the state to withdraw it. “The Bill’s provisions threaten to reverse this progress (in Karnataka), drive away companies, and stifle startups, especially when global firms are looking to invest in the state,” the statement read. Nasscom called for an urgent meeting between industry representatives and state authorities to discuss the concerns and prevent the state’s progress from being derailed.
Mohandas Pai questioned the implementation of the Bill, asking, “… a govt officer will sit on recruitment committees of private sector? People have to take a language test?” He labeled the Bill as a regressive law against the constitution. Mazumdar also warned of the potential negative impact on Karnataka’s leading position in technology, stating, “We must not affect our leading position in technology by this move.”
Despite support from pro-Kannada organizations, who congratulated Chief Minister Siddaramaiah for fulfilling their longstanding demand for reservation, prominent ministers indicated that the government might reconsider the Bill.
Leader of Opposition R Ashok criticized the Bill as “a new drama to divert people’s attention” from corruption scandals under Congress rule, urging CM Siddaramaiah to resign.
The Congress party’s 2023 Assembly elections manifesto had promised 80 percent reservation in all public and private sector jobs in the state. The Sarojini Mahishi report of 1984 had also recommended priority for locals in employment, which recently prompted demonstrations from pro-Kannada organizations demanding implementation of the report’s recommendations.