Karnataka Reservation Bill: Who Would It Benefit? Why Was It Put On Hold?

After massive backlash over a proposed law mandating reservation for ‘local candidates’ in Karnataka in a large chunk of private sector jobs, the state Congress government has walked back on its decision. Chief Minister Siddaramaiah clarified that a ‘final decision’ is yet to be arrived at and will be taken after the next cabinet meeting.

The state cabinet approved ‘The Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024’ on Monday. "Any industry, factory or other establishments shall appoint 50 per cent of local candidates in management categories and 70 per cent in non-management categories," the bill read, and provided penalties between Rs 10,000 to Rs 25,000 if an employer fails to fulfil these obligations. Although it was expected to be tabled in the assembly on Thursday, the Bill has been temporarily put on hold for now, a statement by the Chief Minister’s Office said on Wednesday.

What is the Karnataka private job quota bill?

The Bill, according to the chief minister, intended to implement reservation for Kannadigas in private sector institutions, industries and enterprises. This has been one of the long-pending demands of several Kannada organisations in the state. In fact, in 1984, the Sarojini Mahishi committee – set up to recommend job opportunities for Kannadigas in Karnataka – submitted a report calling for 100 per cent reservation for locals in group C and D jobs in Central government departments and public sector undertakings (PSUs) operating in Karnataka. Siddaramaiah even posted a tweet on ‘X’ yesterday which said: "The Cabinet meeting held yesterday approved a bill to make recruitment of 100 per cent Kannadigas mandatory for "C and D" grade posts in all private industries in the state." The post was later deleted. 

According to the bill, a person can be qualified as a ‘local’ if they are “born in the state of Karnataka and are domiciled in the State for a period of fifteen years and who are capable of speaking, reading and writing Kannada in a legible way.” Candidates must also have a secondary school certificate with Kannada as a language. If not, then they must pass a  Kannada proficiency test as specified by the 'Nodal Agency’. 

If there aren’t enough local candidates, then the employer must collaborate with the government to train such candidates within a period of three years. Even then, if sufficient number of local candidates aren’t available, then the employer “may apply for relaxation from the provisions of this Act to the government, and after due enquiry, the government may pass appropriate orders and such orders passed by the government shall be final.”

Who would it benefit?

The Bill would have benefited those seeking management jobs, which, according to the government, include those falling in the category of supervisory, managerial, technical, operational, administrative and other higher positions in any factory, industry and company, excluding directors, and non-management jobs include those in the category of clerical, unskilled, semi-skilled, skilled employees, as well as contract and casual workers. 

Why did it receive backlash?

Bengaluru – also known globally as India’s Silicon Valley – has been one of the go-to destinations for start ups and the technology sector, which has also in turn been crucial for the state’s development. Several industry veterans on Wednesday slammed the Bill as “discriminatory” and “regressive”, pointing out that many of their own employees do not hail from Karnataka.

Founder and CEO of PhonePe Sameer Nigam said in a post on ‘X’: "I build companies. Have created 25000+ jobs across India! My kids don't deserve jobs in their home city? Shame.”

The National Association of Software and Service Companies (NASSCOM) noted that restrictions imposed by the Bill could force companies to relocate as local skilled talent becomes scarce. With the Information Technology sector contributing 25 per cent of the state's GDP and housing a quarter of the country’s digital talent, “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,” NASSCOM said in its statement. 

In fact, soon after the industry’s backlash made headlines, ministers from Andhra Pradesh and Kerala invited investors to relocate businesses to their states. AP’s IT minister Nara Lokesh responded to NASSCOM’s statement and said, “We welcome you to expand or relocate your businesses to our IT, IT services, AI and data center cluster at Vizag. We will offer you best-in-class facilities, uninterrupted power, infrastructure and the most suitable skilled talent for your IT enterprise with no restrictions from the Government. Andhra Pradesh is ready to welcome you. Please get in touch!”

P Rajeev, Kerala’s Law and Industries Minister made a similar post, inviting companies to invest in Kerala “with its highly skilled talent pool, the best climate, and a hassle-free environment.”

What was the government aiming to do with the Bill?

The Congress government being led by Siddaramaiah and DK Shivakumar might have intended to balance regional interests, which has in fact played a huge role in the state’s politics for decades. 

Not long ago, in December 2023, Bengaluru saw violent protests by pro-Kannada activists who demanded strict implementation of the 60 per cent rule – wherein all sign boards in the state must atleast be in 60 per cent Kannada. Siddaramaiah had then asserted that an ordinance would be brought in that would assure the same. The state’s legislature passed a law to that effect in February. 

The party’s manifesto for the 2023 Assembly elections also included a promise to “ensure 80 per cent jobs in Karnataka to local people in both public and private sector”.

“We are a pro-Kannada government. Our priority is to look after the welfare of the Kannadigas,” the CM said in a post on ‘X’ on Wednesday. 

Meanwhile, the state’s ministers have assured the industry that deliberations will be held with them about the bill, to protect the interests of both Kannadigas as well as industries.