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The Karnataka government on Wednesday put the reservation bill for Kannadigas in private firms on hold amid fierce criticism from business leaders and tech tycoons.
The Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024 was cleared by the state Cabinet on Monday and was expected to be tabled in the Assembly on Thursday.
"The bill approved by the Cabinet to provide reservation for Kannadigas in private sector organisations, industries and enterprises has been temporarily put on hold. This will be revisited and decided in the coming days," a statement issued by the Office of the Chief Minister said on Wednesday.
Earlier, Karnataka Chief Minister Siddaramaiah also posted on X: "The bill intended to implement reservation for Kannadigas in private sector institutions, industries and enterprises is still in the preparation stage. A final decision will be taken after comprehensive discussion in the next cabinet meeting."
According to the Bill, "Any industry, factory or other establishments shall appoint 50 percent of local candidates in management categories and 70 per cent in non-management categories."
Reacting strongly to the state government move, industry veterans objected to the proposed quota, calling it 'fascist,' and 'short-sighted.'
Well-known entrepreneur and former Chief Finance Officer of Infosys, TV Mohandas Pai dubbed the bill as "regressive".
"This bill should be junked. It is discriminatory, regressive and against the constitution, @Jairam_Ramesh (Congress leader) is govt to certify who we are? 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 private sector? People have to take a language test?" Pai said on 'X'.
Pharma company Biocon Managing Director Kiran Mazumdar Shaw said, "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."
ASSOCHAM, Karnataka co-chairman R K Misra said on 'X', "Another genius move from Govt of Karnataka. Mandate LOCAL RESERVATION & APPOINT GOVT OFFICER IN EVERY COMPANY to monitor. This will scare Indian IT & GCCs. Short-sighted."
National Association of Software and Service Companies on Wednesday cautioned the government that "the restrictions could force companies to relocate as local skilled talent becomes scarce."
Karnataka's move was similar to a bill introduced by the Haryana government, mandating 75 percent reservation in private sector jobs to the residents of the state. It was, however, struck down by the Punjab and Haryana high court on November 17, 2023.
Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024 makes compulsory for the private firms to reserve jobs for Kannadigas.
"Any industry, factory or other establishments shall appoint fifty percent of local candidates in management categories and seventy percent in non-management categories," the bill read.
Karnataka Chief Minister Siddaramaiah on Wednesday deleted his post on 'X' about '100 percent reservation for Kannadigas'.
He posted another message on the social media platform that the cabinet approved the bill to fix 50 percent reservation for administrative posts and 75 percent for non-administrative posts for Kannadigas in private industries and other organisations.
As business leaders criticised the move, Karnataka infrastructure development and medium and heavy industries minister MB Patil and Information Technology and biotechnology minister Priyank Kharge said the government will have a wider consultation to protect the interests of Kannadigas as well as industries.
"We will ensure that the interests of Kannadigas are protected, alongside those of the industries," Patil said on 'X'
He said Karnataka is a progressive state, and the government cannot afford to lose in this once-in-a-century race of industrialisation.
"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," the Minister said on 'X'.
He said, " We will put forth discussion with the industry as well. This I would like to assure the industry."
The development drew the attention of neighbouring Andhra Pradesh.
Ruling Telugu Desam Party general secretary and IT minister Nara Lokesh tried to tap the opportunity for the benefit of his state.
In a post on 'X' he invited NASSCOM "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!" he said.
Priyank Kharge jumped into the discussion and clarified to Lokesh that this draft bill will include recommendations from our industry partners.
He also told NASSCOM, "be rest assured, we will not do anything that will not withstand legal scrutiny. This is your Government and as always we are just a call away."