'It'll Force Firms To Relocate': Software Body Nasscom Flags Concerns Over Karnataka's Private Job Quota Move

Nasscom on Wednesday raised concerns over the Karnataka Bill on 100% private sector employment reservation for Kannadigas in Group C and D jobs, which has been cleared by the state’s Cabinet, and said it could hamper the growth of the industry, impact jobs, and force companies to relocate. Urging the state government to withdraw the bill, the software body also seeks an urgent meeting for industry representatives with state authorities.

The Karnataka Cabinet on Monday approved the ‘Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024,’ that made industries, factories and other establishments mandatory to appoint local candidates in 50 per cent of management positions and 75 per cent in non-management positions. It also mandates 100 per cent reservation for Kannadigas in private sector for Group C and D posts, said Chief Minister Siddaramaiah.

“It’s deeply disturbing to see this kind of Bill, which will not only hamper the growth of the industry, impact jobs and the global brand for the state. Nasscom members are seriously concerned about the provisions of this bill and urge the state government to withdraw the bill,” Nasscom said in a statement.

It added that 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.

“Nasscom is seeking an urgent meeting for industry representatives with state authorities to discuss the concerns and prevent the state’s progress from being derailed,” it said.

It said in today’s highly competitive landscape, knowledge led businesses will locate where talent is as attracting skilled workers is crucial for success. 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.

The technology sector has been crucial to Karnataka’s economic and social development, with Bengaluru known globally as India’s Silicon Valley. The technology sector contributes almost 25% of the state GDP and has played a key role in enabling higher growth for the state, higher per capita income than the national average. With over a quarter of India’s digital talent, the state houses over 30% of the total GCCs and around 11000 start-ups.

About the Bill

The Bill mandates 100 per cent reservation for Kannadigas in private sector for Group C and D posts.

On the appointment of ‘Local Candidates”, the bill 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 secondary school certificate with Kannada as a language, they must pass a Kannada proficiency test as specified by the ‘Nodal Agency’, it says.

If the qualified local candidates are not available, the establishments within three years with active collaboration of government or its agencies should take steps to train them, it says.

If sufficient number of local candidates are not available, then an establishment may apply for relaxation from the provisions of this Act to the government.

“Such orders passed by the Government shall be final: Provided that, the relaxation provided under this section shall not be less than 25 per cent for management category and 50 per cent for non-management categories,” the proposed bill says.

Every industry or factory or other establishment should inform the nodal agency about the compliance of the provisions of this Act in such form, within such period as may be prescribed, the copy of the bill read.

The role of the nodal agency will be to verify the reports furnished by an employer or occupier or manager of an establishment and submit a report to the government indicating the implementation of the provisions of this Act.

The nodal agency will have powers to call for any records information or documents in the possession of an employer or occupier or manager of an establishment for the purpose of verifying the report.

The government may appoint an officer not below the rank of Assistant Labour Commissioner as the authorised officer for the purpose of compliance of the provisions of the Act.

Any employer or occupier or manager of an establishment, who contravenes the provisions of this Act, should be liable for a penalty between Rs 10,000 to Rs 25,000.

“If the contravention continues after penalty has been imposed, then, with further penalty which may extend to one hundred rupees for each day till the time contravention so continues,” the proposed bill says.