On Monday (16th July), the Congress government in Karnataka held a cabinet meeting headed by CM Siddaramaiah. It decided to present seven bills including 100% reservation for Kannadigas in Category C and D jobs in all private industries in the state. However, the legislation extending reservations in the private sector has triggered massive opposition from top Industry leaders and within the state government.
Notably, after facing massive backlash, CM Siddaramaih reportedly deleted his post that highlighted the Cabinet’s decision to extend reservations in the private sector. Additionally, two of his senior ministers have slammed the Labour Ministry for bringing the draft bill without consulting other Ministries and holding discussions with Industry bodies.
Significantly, one of the draft bills seeks to reserve 50% of management jobs and 75% of non-management jobs for local Kannadigas in the private sector. According to news agency ANI, the bill to provide 100% job reservation for Kannadigas in C and D grade jobs was approved in the Cabinet meeting. The bill is called the State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024. Officials from the Labour Department said that the Bill will be presented and passed in the same session.
A day after the Cabinet meeting, CM Siddaramaiah hailed his government for the move describing it as a “Pro-Kannada government”. However, the Chief Minister went on to delete the post after facing backlash for the move.
In the now-deleted post, Siddaramaiah had written, “The Cabinet meeting held yesterday approved a bill to make it mandatory to hire 100 per cent Kannadigas for ‘C and D’ grade posts in all private industries in the state. It is our government’s wish that the Kannadigas should avoid being deprived of jobs in the land of Kannada and should be allowed to build a comfortable life in the motherland. We are a pro-Kannada government. Our priority is to look after the welfare of Kannadigas.”
Karnataka CM Siddaramaiah tweets, "The Cabinet meeting held yesterday approved a bill to make it mandatory to hire 100 per cent Kannadigas for "C and D" grade posts in all private industries in the state. It is our government's wish that the Kannadigas should avoid being deprived…
— ANI (@ANI) July 17, 2024
Conspicuously, the Congress government blamed North Indians for taking away the jobs from the locals and necessitating the government to bring this draft bill. The bill has been drafted by the Labour Department. It claimed that the jobs of industries operating in the state are going to the states of North India. It states that industries that get infrastructure including land and water from the state should give reservations for jobs to the locals, and this has been approved in the cabinet meeting.
Content of the draft bill that has stirred a massive row in the state
Regarding the appointment of ‘Local Candidates’, the bill states, “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.”
As per the bill, a local candidate is defined as a person born in Karnataka or living in the state for 15 years and can speak, read, and write in Kannada.
According to the bill, if the candidates did not have Kannada as a language in their secondary school certificate, they must pass a Kannada proficiency test as specified by the ‘Nodal Agency’.
In case, the industries fail to get enough qualified local candidates, they will have to take steps to train local candidates within three years while collaborating with the government.
According to the bill, even if the company fails to get a sufficient number of local candidates, they may apply for relaxation. However, the bill mandates that the relaxation provided shall not be less than 25% for management level and 50%-management level jobs.
The bill also proposes penalties for failure to comply with the Employment of Local Candidates Act. These penalties range from Rs 10,000 to Rs 25,000.
Strikingly, the draft of the bill does not mention the 100 per cent reservation for Group C and D posts. Additionally, the Labour Minister also issued a clarification in which he didn’t mention 100% reservation in C and D categories jobs.
Siddaramaiah government takes a U-turn on 100% reservation, issues clarification as well as give assurance of “wider discussions”
On Wednesday (17th July), hours after the decision and CM Siddaramaiah’s post mentioning 100% reservation for Group C&D categories stirred a hornet’s nest, Karnataka Labour Minister Santosh S Lad issued a clarification about the Chief Minister’s post which was later deleted.
The Labour Minister clarified that the state government has capped reservations in private firms at 70% for non-management roles and 50% for management-level positions.
#WATCH | Karnataka Labor Minister Santosh S Lad clarifies on CM Siddaramaiah's tweet (that appears to be deleted now).
— ANI (@ANI) July 17, 2024
He says, "At management (level), it has been decided to provide reservation to 50% of the people. At the non-management level, it has been decided to provide… pic.twitter.com/xKrSNQTY0T
In the clarification statement, the Labour Minister claimed that if people with such skills are not available, the company can “outsource” people.
Industries bodies oppose the bill, and demand it should be scrapped
The Pro-Kannada organisations hailed the state government for this move describing it as a boon for locals. However, many industry leaders argued that the government should focus on skills not quotas. Many industrialists claimed that it is a “discriminatory” and regressive law because of which the industries in the state may suffer adversely. According to many Industry leaders, the decision may force many of the companies to relocate to other states and will deter talent and investment from coming into the state.
The Chairman of Manipal Global Education Services, Mohandas Pai described the bill as “fascist” and “unconstitutional” adding that the bill should be “junked”.
This bill should be junked. It is discriminatory, regressive and against the constitution @Jairam_Ramesh 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… https://t.co/GiWq42ArEu
— Mohandas Pai (@TVMohandasPai) July 17, 2024
Biocon executive chairperson Kiran Mazumdar Shaw also opposed the move arguing that the government should focus on skill and talent.
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. @siddaramaiah @DKShivakumar @PriyankKharge https://t.co/itYWdHcMWw
— Kiran Mazumdar-Shaw (@kiranshaw) July 17, 2024
The co-chairman of ASSOCHAM Karnataka and the co-founder of YULU, RK Misra described the bill as “shortsighted”. He argued that if a government officer is appointed in every private company to monitor its implementation, it will scare away Indian IT and Global Capability Centres.
Another genius move from Govt of Karnataka. Mandate LOCAL RESERVATION & APPOINT GOVT OFFICER IN EVERY COMPANY to monitor.
— RK Misra (@rk_misra) July 17, 2024
This will scare Indian IT & GCCs. Short sighted. @nasscom
@siddaramaiah @kris_sg @kiranshaw https://t.co/EhvBLHeuiX
Will hold wider consultation: Priyank Kharge slams Labour Ministry and says other ministries not consulted yet
When the controversy escalated and several Industrial leaders criticised the government’s move, State IT Minister Priyank Kharge and Minister for Commerce & Industries said that they would hold discussions with the Chief Minister. They also added that the state government will now hold wider consultations and discussions on this matter.
India is currently experiencing a manufacturing and industrial revolution driven by the global China Plus One policy. In this competitive era, states like Karnataka, Maharashtra, Tamil Nadu, and Telangana are striving to be at their best. It is of utmost importance for all states… pic.twitter.com/Y4Qll1DzxW
— M B Patil (@MBPatil) July 17, 2024
#WATCH | Bengaluru: Karnataka minister Priyank Kharge says, "The bill has been brought in by the labour department. They are yet to consult with the industry, the Minister of Industry and the Department of Information Technology. I am sure that before coming up with the rules of… https://t.co/qDQgUeSAXx pic.twitter.com/ViUJYPUGbS
— ANI (@ANI) July 17, 2024
Ramifications of the move
As pointed out by many industry leaders and legal experts, the draft bill brought by the Congress government in Karnataka is discriminatory and regressive as it seemingly violates both Article 14 – Equality of all citizens and Article 19 which allows every citizen freedom of movement including the right to reside and work in any part of the country.
On numerous occasions, the courts have struck down reservations for locals in private jobs and legislations that breach a certain limit (50% in most cases). Several industrialists have highlighted how the Punjab and Haryana High Court quashed a law that mandated 75% reservation in private sector jobs for residents of Haryana.
Furthermore, the legislation mandating job quotas for locals has an implicit clause that the companies can seek relaxation in case they fail to avail enough skilled locals for the job which renders it prone to misuse and corruption. This could lead to moral policing by regional and linguistic chauvinistics as was witnessed in the form of violent protest against shop owners in the name of non-compliance of 60% Kannada language on signages on banners. The ambiguity and scope for favouritism/witch-hunt and government/police intervention in the day the day-to-day functioning of the company’s operation also builds a terrorising atmosphere for non-local owners in starting or running their operations.
Pertinent to note that employment generation for local youths to avoid and mitigate intra and inter-state migration among other related problems has been a major focus area for all state governments in coordination with the Union government. Political parties – with regional parties having higher propensity – have been more inclined towards introducing restrictive measures and job quotas for locals just for the sake of vote bank consideration.
However, Congress’ Karnataka government’s decision to go through the populist measure is a counterintuitive one as rather than focusing on enlarging the pie (state’s economy) – which requires newer investment – it has a chilling effect on meritocracy, ease of doing business, investment opportunities and render the companies prone to “corruption”, “bureaucratic red-tapism”, and sends the state back to the “License quota raj” period, Pre-LPG reform era. It also left them at the mercy of regional and linguistic chauvinist groups to spare them from wanton violence as they could torment any company they dislike in the name of “not following the law which has a great amount of ambiguity.”
