Sources within the Congress, including those who have been members of the teams that drafted its 2019 and 2024 Lok Sabha poll manifestos, said the Karnataka government decision lacked any empirical basis.
IMAGE: Karnataka Chief Minister Siddaramaiah, right, with state Deputy Chief Minister D K Shivakumar on the first day of the monsoon session of the state assembly in Bengaluru, July 15, 2024. Photograph: ANI Photo
The Congress-run Karnataka government's move to reserve jobs for locals was criticised by a Union minister as 'regressive and bad economics', and at least two industries ministers of neighbouring states Andhra Pradesh and Kerala jumped into the controversy to invite Karnataka's industry to relocate to their respective states.
The decision was later put on hold by the state.
In response to a statement by the National Association of Software and Service Companies (Nasscom) expressing 'deep concern' about the Karnataka State Employment of Local Industries Factories Establishment Act Bill, 2024, Andhra Pradesh IT, Communication and Industries Minister Nara Lokesh said Karnataka's IT industry was welcome to relocate to Visakhapatnam.
'We understand your disappointment. We welcome you to expand or relocate your businesses to our IT, IT services, AI and data centre cluster at Vizag,' Lokesh, who is Andhra Pradesh Chief Minister N Chandrababu Naidu' son, said.
'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,' Lokesh posted on X.
Kerala Industries Minister P Rajeev said, 'Invest in Kerala. Employee talent and merit are the only criteria for recruitment. It is the right time for companies to discover Kerala with its highly skilled talent pool, the best climate and a hassle-free environment. Embrace this opportunity.'
Earlier in the day, Union Minister of State Jayant Chaudhary, who has independent charge of skill development and entrepreneurship portfolio, said Karnataka's move was unconstitutional.
'Karnataka state mandating up to 100 per cent reservations in the private sector for locals is regressive and bad economics. I have spoken on this previously as well and I believe such measures by any state violate the Constitutional rights of all Indians,' said Chaudhary, who heads the Rashtriya Lok Dal, a constituent of the ruling National Democratic Alliance.
But BJP leaders, whether in Karnataka or in the national capital, were silent on the issue.
The BJP-Jannayak Janta Party coalition government in Haryana in 2020 had passed a Bill to provide for 75 per cent reservation for locals in private sector jobs.
The Punjab and Haryana high court quashed it in November 2023.
Congress leaders such as Manish Tewari, who is now an MP from Chandigarh, had welcomed the court judgment last year, but maintained silence on the Karnataka government's announcement.
Sources within the Congress, including those who have been members of the teams that drafted its 2019 and 2024 Lok Sabha poll manifestos, said the Karnataka government decision lacked any empirical basis.
"To my knowledge, no study was undertaken. There is no empirical evidence to support the move," a Congress strategist, who didn't want to be named, said.
In 2016, the first Siddaramaiah-led Congress government planned to reserve 100 per cent of groups C and D jobs in the private sector for Kannadigas.
The government's law department had shot it down, saying the move violated Articles 14 and 16 of the Constitution.
'Where will industry find local employees?'
Shivani Shinde and Shine Jacob
The controversial draft Bill proposing job quota for locals in Karnataka was put on hold late Wednesday evening following high-pitched industry protests through the day.
This came just a day after the Karnataka cabinet had approved a draft Bill mandating 50 per cent reservation to locals in private sector management jobs and 75 per cent in non-management positions.
In a X post in the evening, State Commerce and Industries Minister M B Patil said Chief Minister Siddaramaiah has taken 'due cognizance' and the Bill 'is withheld until further consultations and due diligence'.
Patil said that industry leaders need not panic.
'The government is committed to further creation of jobs and furthermore for Kannadigas, however, in a more amicable manner,' Karnataka minister Patil said.
Before this, Siddaramaiah asserted that the Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024, was still at the preparatory stage and that a final decision would be taken after comprehensive discussion in the next cabinet meeting.
Earlier in the day, reacting to the Karnataka government decision on job quota for locals, IT industry body National Association of Software and Services Companies (Nasscom) raised serious concerns over the move, calling it 'deeply disturbing'.
Bengaluru, which is often called the Silicon Valley of India, has been a scene of furore over job for locals in the last 24 hours or so.
Industry leaders slammed the decision taken by the Karnataka cabinet on Tuesday, describing it as discriminatory and regressive.
Mohandas Pai, chairman of Manipal Global Education Services and the former CFO of IT major Infosys in a post on the X said: 'This bill should be junked. It is discriminatory, regressive and against the Constitution... This is a fascist bill as in Animal Farm, unbelievable...'
Kiran Mazumdar Shaw, executive chairperson of Biocon, also posted on the microblogging platform X.
She wrote: '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.'
The technology sector has been crucial to Karnataka's economic and social development, with Bengaluru known globally as India's Silicon Valley, a Nasscom statement pointed out.
'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 stated.
On Wednesday morning, Karnataka Chief Minister Siddaramaiah had posted on X that the cabinet had 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.
In a dramatic turn of events, he deleted that post later in the day.
R K Misra, co-chairman, Assocham-Karnataka, in his social media post called the bill short sighted.
'Another genius move from the government of Karnataka... This will scare Indian IT & GCCs,' Misra said.
The Bill defined a local candidate as a person who is born in Karnataka, domiciled in the state for a period of 15 years, and capable of speaking, reading, and writing Kannada legibly.
According to Praveen Agadi of the Karnataka Chamber of Commerce and Industry, the decision is a double edged sword as it will affect both large companies in the information technology and construction spaces and micro small and medium enterprises (MSMEs) as well.
Karnataka is heavily dependent on outside employees in major sectors like IT and construction in the management level, he said.
Also, in the non-management level, majority of MSMEs and large companies in the construction sector are dependent on migrant population.
"Where will the industry find local employees? Industry will start losing benefits from the government," Agadi said.
According to the last Census, around 51 per cent of the population in Bengaluru were migrants.
Karnataka has a higher proportion of interstate migration at 37.82 per cent, versus a national average of just 4.48 per cent.
The net in-migration state had 3.2 million migrants from other states in 2011, while outward migrant population was just 2.5 million.
A R Ramesh, CEO, TeamLease Degree Apprenticeship, said: "The current need is to emphasise skill development to address the gap between available opportunities and the requisite skills for employability."
He added that it is vital that a state like Karnataka is founded on the principles of meritocracy.
Feature Presentation: Aslam Hunani/Rediff.com
