Explained: What is the row over Kannadiga job quota Bill? What does it say?

The Karnataka Cabinet on Monday (July 15) cleared a Bill mandating employment reservation for Kannadigas in private firms, drawing widespread criticism from the industry, which believes the diktat is “fascist”, “discriminatory”, and “regressive”.

The Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024, drafted by the Labour Department, will reportedly be tabled in the Assembly on Thursday (July 18). Here is all we know about the proposed law and why it has created a furore.

What is the Bill about?

On Tuesday (July 16), Chief Minister Siddaramaiah announced the decision on X, saying the Bill mandated 100 per cent reservation for Kannadigas in private firms for Group C and Group D posts.

However, he deleted the post after receiving massive backlash online and Labour Minister Santosh Lad clarified simultaneously that the reservation of jobs in private firms will be capped at 70 per cent for non-management roles and 50 per cent for management roles.

Siddaramaiah on Wednesday made a fresh X post, saying the same. “The cabinet meeting held on Monday approved the bill to fix 50% reservation for administrative posts and 75% for non-administrative posts for Kannadigas in private industries and other organizations of the state,” said the post (auto translated)

“It is our government’s wish that Kannadigas should avoid being deprived of jobs in the land of Kannada and should be given an opportunity to build a comfortable life in the motherland. We are a pro-Kannada government. Our priority is to look after the welfare of the Kannadigas,” he added.

What if suitable candidates are not available?

If companies cannot find suitable skilled candidates to fill the quota, they can hire people from outside the state, Lad reportedly said.

“If such skills are not available (among Kannadigas), jobs can be outsourced. The government is trying to bring in a law to give preference to locals... if skilled labour is available here...,” he reportedly said.

However, he claimed there is no shortage of talent in the state. “Karnataka has enough skilled workforce. There are so many engineering colleges, medical colleges, international schools... We are asking them [private firms] to give 70 per cent of work to Kannadigas. If enough talent is not available, they can bring from outside.”

What the Bill says on the appointment of “local candidates”

According to news agency PTI, the Bill says:

• Candidates must pass a Kannada proficiency test, as specified by the ‘Nodal Agency’, if they do not possess a secondary school certificate with Kannada as a language.
• If qualified local candidates are not available, the establishments should take steps to train them within three years, with active collaboration of the government or its agencies.
• If a sufficient number of local candidates are not available, an establishment may apply to the government for relaxation from the provisions of the Act.
• Orders passed by the government shall be final. The relaxation shall not be less than 25 per cent for management category and 50 per cent for non-management categories.
• Every industry, factory or other establishment should inform the nodal agency about the compliance of the provisions of this Act within a certain specified period.
• The nodal agency will verify the reports submitted by the establishment and submit a report to the government indicating compliance.
• The nodal agency can call for any records, information, or documents from the establishment to verify the report.
• The government may appoint an officer not below the rank of Assistant Labour Commissioner as the authorised official to ensure compliance of the provisions of the Act.
• Any contravention of the provisions of the Act would invite a penalty ranging between Rs 10,000 and Rs 25,000.
• If the contravention continues after the penalty has been imposed, a penalty, up to Rs 100, will be imposed each day till the time the contravention continues.

Why was such a Bill necessary?

The Bill proposes that Karnataka-based companies benefitting from state-provided infrastructure must reserve jobs for locals, which are otherwise being given largely to people from the northern states who are then settling in Karnataka.

The proposed policy reportedly reflects the recommendations made in 1986 by the Sarojini Mahishi Committee, which said large-, medium-, and small-scale industrial units with over 50 workers had to reserve 65 and 80 per cent of Group A and Group B jobs, respectively, for Kannadigas.

All Group C and Group D jobs would be kept for Kannadigas, the report had said.

Backlash from industry

Top industry players from the state reacted to the proposed law with disbelief and fury. “This bill should be junked. It is discriminatory, regressive and against the constitution… is govt to certify who we are? This is a fascist bill as in Animal Farm [novel by George Orwell], 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?” Mohandas Pai, chairman of Aarin Capital and former Infosys CFO, wrote on X.

Biocon chairperson Kiran Mazumdar-Shaw cautiously reminded the government that such a law might severely harm the IT sector. ““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,” she posted on X.

RK Misra, co-chairman of ASSOCHAM Karnataka, called the proposal “short-sighted”. “Another genius move from Government of Karnataka. Mandate LOCAL RESERVATION and APPOINT GOVT OFFICER IN EVERY COMPANY to monitor. This will scare (companies)... short-sighted,” he posted on X.

Shriram Subramanian, founder and Managing Director of InGovern Research Services, predicted a pushback from industry and companies. “The societal impact on the psychology of citizens (both Karnataka domicile and those outside Karnataka) will be huge. Karnataka doesn’t have so much talent. Industry and jobs will move out of Karnataka. A bad precedent,” he tweeted.

In another post, he continued, “Who will do even unskilled work [such as security staff, restaurant staff, housekeeping jobs, carpentry jobs, mason jobs? Only people from outside Karnataka are good for these. Visit villages & small towns in Karnataka to see the aversion to do such jobs.”

In a third post, he wrote, “Every sector will be hit directly and indirectly - Startup, education, real estate, hospitality. Real estate - that feeds the politicians - will take a big hit. Demand and Prices will significantly drop.”

Government response to backlash

Lad told news agency ANI that the government respects these apprehensions and he would speak to these industry experts. “We respect their apprehensions and their views. We will talk to them,” he said.

State Commerce and Industries Minister MB Patil said the government would “resolve this confusion...so that it does not have any adverse effect...”

“…We will have wider consultations. We will ensure that the interests of Kannadigas are protected, alongside those of the industries…. Karnataka is a progressive state, and we cannot afford to lose in this once-in-a-century race of industrialization. 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,” he posted on X, which was welcomed by Pai.

State IT Minister Priyank Kharge, too, said he has requested Chief Minister Siddaramaiah to consult industry experts and other departments concerned and only then implement the law.

“There’s no need to panic, we will have wider consultations and arrive at a common ground,” Kharge said. He explained that the government’s aim is to provide more jobs to locals but bring in investments at the same time.

He added that the Bill has been suggested by the Labour Department and there has been no discussion with the Industry or IT departments.

“Karnataka is a progressive state. The clauses of the Bill are a suggestion. If the industry feels it’s not required, we’ll look into it,” Kharge reportedly said.