Karnataka jobs quota row: Govt puts bill to provide reservation in private sector on hold after backlash

Bengaluru: Karnataka Chief Minister Siddaramaiah on Wednesday put on hold a Bill his government had drafted to reserve private sector jobs for Kannadigas following backlash from India Inc, which warned that the move would “drive away companies” and “stifle startups”.

Siddaramaiah’s decision came hours after he tweeted that his 'pro-Kannada government' had approved a bill to keep 50 per cent management and 75 per cent non-management jobs in the private sector for Kannadigas.

“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 said.

Earlier in the day, however, Siddaramaiah said the Cabinet had on Monday cleared the Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill. He even met a pro-Kannada delegation, which hailed the government’s move.

Industry body Nasscom expressed deep concern over the bill. “The bill’s provisions threaten to reverse this progress (made by the state in IT and start-ups), drive away companies and stifle startups, especially when more global firms are looking to invest in the state,” Nasscom said in a statement, adding that restrictions could force companies to relocate as local skilled talent becomes scarce.

Biocon executive chairperson Kiran Mazumdar-Shaw said there must be “caveats that exempt highly skilled recruitment from this policy”.

Aarin Capital chairperson TV Mohandas Pai, a former Infosys CFO, described the bill as “draconian, illegal, unconstitutional, undemocratic and fascist”. Pai also argued that reserving jobs like this was against Constitution Article 19. “When Haryana tried to do it, the High Court struck it down as unconstitutional,” he pointed out.

Industries Minister MB Patil and IT/BT Minister Priyank Kharge had much fire-fighting to do.

“During a discussion on the bill in the Cabinet, (principal secretary of the labour department) Mohammed Mohsin said it would be an advisory...that businesses should consider talented Kannadigas. But the Bill carries a different meaning,” Patil said. “It is paramount that Kannadigas shouldn’t face injustice. At the same time, we want to protect the interests of industries.”

Priyank too sought to assuage industry concerns. “As always, we will consult with industries, industry bodies and thought leaders to ensure we foster a favourable environment for investments and job creation for locals...” he said. “No detrimental rules or laws will be enforced without due consultations.”

'No consultation'

According to sources, the bill came to the Cabinet without the inter-ministerial consultations. Specifically, the departments of commerce & industries and IT/BT were not consulted, DH has learnt.

It is also said that the labour department omitted the words ‘reservation’ and ‘quota’ from the bill so that it would stand legal scrutiny. Accordingly, the bill required companies to “appoint” local candidates born and residing in Karnataka for 15 years.

“Employment should be based on skills, not domicile,” Viswanath PS, MD and CEO, Randstad India, said. “The state risks losing its competitive advantage, particularly in attracting MNCs, GCCs, and startups."