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Karnataka Bill for job reservation: The Karnataka governmonent’s proposed bill on job reservations for locals in private sector jobs has sparked a raging controversy. The bill, titled the Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill 2024, mandates that 50% of management jobs and 75% of non-management jobs in industries and factories be reserved for local residents. Additionally, companies were required to train and hire local candidates within three years if suitable candidates were not readily available.
The announcement by Chief Minister Siddaramaiah emphasised that this move aimed at boosting job prospects for local Kannadigas. Initially, the bill mandated 100% reservation for ‘C’ and ‘D’ grade posts for locals, meaning only Kannada-speaking individuals could be recruited for these positions. However, following backlash from industry leaders and stakeholders, Siddaramaiah deleted this announcement from social media. Karnataka labour minister Santosh S Lad clarified that the reservation for locals is capped at 70% in non-management roles and 50% in management roles.
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High unemployment behind quota move
The bill’s introduction comes amid high unemployment rates in India, which significantly influenced recent elections. State governments, elected by local voters, often attempt measures to gain favour, and this bill can be seen as an attempt to address local employment concerns. However, the bill faced immediate backlash for its perceived unconstitutionality and discrimination.
Such laws infringe on the constitutional right of all Indian citizens to seek employment anywhere in the country. The Punjab and Haryana High Court had struck down a similar law last year. Moreover, industry leaders and trade bodies, including Kiran Mazumdar-Shaw and Mohandas Pai, have voiced strong opposition. They argue that the bill would hinder Karnataka’s position as a tech hub, deterring skilled talent and investment, and could lead to the return of the inspector raj, where bureaucrats wield significant power over employment decisions, potentially leading to corruption.
Karnataka Bill can trigger capital flight
The Federation of Karnataka Chambers of Commerce and Industry suggested greater consultation and feedback to develop better legislation. NASSCOM also expressed concerns about the bill’s potential to deter talent and investment and lead to capital flight. The overarching fear is that such restrictive measures will impede the private sector’s growth and job creation, exacerbating the unemployment crisis rather than alleviating it.
The bill also includes provisions for penalties in case of non-compliance, with fines ranging from ₹10,000 to ₹25,000 for violations, and additional daily fines if the contravention continues. Companies failing to find suitable local candidates can seek relaxation from the bill’s provisions, but the government’s decision will be deemed final. The bill states that any relaxation will not be less than 25% for management roles and 50% for non-management roles.
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In the face of strong opposition, the Karnataka government has put the decision on hold and plans to conduct a comprehensive discussion in the next cabinet meeting before making a final decision. The move highlights the tension between populist measures aimed at securing local votes and the broader economic implications of such policies.
The fear is that such restrictive measures will impede the private sector’s growth and job creation, exacerbating the unemployment crisis rather than alleviating it. Karnataka’s experience reflects the broader national debate on local job reservations, as similar laws in states like Andhra Pradesh and Haryana have faced judicial challenges and implementation hurdles. The ongoing discussions and consultations with stakeholders and policy makers in Karnataka will be critical in determining the final shape and impact of this contentious bill.