Mint Primer | Karnataka: One step too far with local-only quota

The Karnataka government has pressed the brakes on a bill aimed at quotas for “locals” in the private sector. The pause comes when the state is facing labour shortages. Besides, the bill would have deterred firms, delayed projects and impacted investments. Mint explains:

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What does the draft bill say?

It directed firms to set aside 50% of management and 75% of non-management jobs for locals. It defined management as those who are in administrative, technical jobs and non-management as those in clerical posts—skilled, semi-skilled, unskilled. Those employed on contracts in factories and industries too would have gone through a sifting, and firms which did not adhere to this were to be penalized. The “local” candidate has to be someone born in Karnataka, who has spent at least 15 years in the state and can speak Kannada. The candidate had to provide school certificates to that the authorities.

Which sectors are most at risk?

E-commerce firms, startups, IT and ITes companies, and global capability centres (GCCs) that are headquartered in Karnataka will face disruptions if they have to select employees based on their where they come from. The IT and ITes sector, that employs millions, has warned that investments will dry up on the back of such protectionist measures. Industry body Nasscom that represents the IT companies said it was “seriously concerned”, pointing out the tech sector contributes 25% to the state’s GDP. Such a step will “drive away companies”, that will be forced to relocate as skilled talent becomes scarce.

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What about the employment scenario?

The migrant workforce in the state has had an important role in infrastructure development and manufacturing, both of which will get impacted if the bill becomes law. Companies typically hire from colleges and vocational training grads. Job fairs and mass recruitment drives can come to a halt if firms have to offer roles only to certain sections of candidates.

Could the bill really have gone through?

Lawyers say that the bill is just a draft. It has to pass through the Lower and Upper Houses and then get the Governor’s assent. And bills like these are often challenged in courts. In 2020, the Haryana government tried to do something similar but the bill was struck down by the Punjab and Haryana High Court as it went against Article 14 and 19 of the Constitution. Article 14 guarantees equality before the law, and Article 19 the freedom to move freely, form associations, and carry out a profession.

Can Karnataka lose out from these steps?

“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,” Kiran Mazumdar Shaw, executive chairperson of Biocon Ltd said in a post on X. The state which attracts millions of Indians—in both white- and blue- collar jobs—also faces stiff competition from other wealthy states like Maharashtra, Gujarat, Tamil Nadu and Haryana.

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