After CEOs and industry bodies warned the Karnataka government about the proposed law on reservation in private sector jobs, the state leadership on Wednesday said the bill has been put on hold and will be discussed in the cabinet.
The state cabinet has approved the Employment of Local Candidates in Karnataka State Government Industries, Industries and Other Institutions Bill, 2024, which mandates 75 per cent reservation in non-management jobs and 50 per cent in management jobs for “locals”.
While Biocon founder Kiran Majumdar Shah said the proposed law should “exempt highly skilled recruitment from this policy”, Nasscom, an industry body representing software and services companies, said in no uncertain terms that the bill's provisions would “stifle startups” and “displace companies”. Local talent will become scarce.”
Venture capitalist Mohandas Bhai took to social media to describe the bill as 'discriminatory', 'regressive' and 'fascist'.
Based on such adverse feedback, the state government decided to revise the bill and its provisions. “The draft bill to provide reservation to Kannadas in private sector companies, industries and institutions is still in the preparation stage. A detailed discussion will be held in the next cabinet meeting and a final decision will be taken,” Chief Minister Siddaramaiah said on social networking site X.
State Industries Minister MP Patil said the bill is on hold pending “further consultations and due consideration” and asked that “industry leaders need not worry”. He and IT and Biotechnology Minister Priyank Kharge assured the industry that “broad consultations” would be held before passing the bill.
“No rule is passed without broad consultations,” Kharge told The Read.
Patil said the government will ensure that the interests of all are protected. Assuring that industries “need no fear”, the minister said he would take up the issue with the chief minister and his other cabinet colleagues. “We will ensure that the interests of Kannadigas are protected along with the interests of the industry,” he said.
The bill describes “local candidates” as those born in the state or residents of Karnataka for 15 years, who have passed the requisite examination conducted by the nodal agency and are “able to speak, read and write Kannada”. “Management” category means persons holding positions of supervisory, managerial, technical, operational, managerial nature in industries, organizations or institutions. “Non-Management” category includes posts of clerical, unskilled, semi-skilled, skilled workers in IT-ITES sector.
In the absence of qualified candidates, companies must take steps to “train and engage local candidates within three years”. For special cases, the Bill proposed to reduce the reservation to 50 per cent in non-managerial posts and 25 per cent in managerial posts.
In a statement, the National Association of Software and Services Companies (NASCOM) expressed “deep concern” over the bill. Urging the government to withdraw the bill, it said, “The provisions of the bill threaten to derail this progress (in Karnataka), drive away companies, and crush startups, especially when global companies want to invest in the state.” Report.
It called for an emergency meeting of industry representatives and state officials to “discuss concerns and prevent the state's progress from derailing.”
Mohandas Bhai, “…shall a government official sit on the recruitment committees of the private sector? Should people take a language test? He said the retroactive law was unconstitutional. Majumdar said that while the aim of the bill was to provide jobs to local people, “we should not compromise our leading position in technology with this move,” he said.

While pro-Kannada organizations met and congratulated Chief Minister Siddaramaiah for fulfilling their age-old reservation demand, key ministers showed signs that the government is reconsidering the bill.

Leader of Opposition R. Ashok attacked the Bill as a new drama to divert people's attention from the corruptions that took place during the Congress rule. “You cannot hide the rampant corruption and failures of your government,” he told Siddaramaiah, reiterating that the chief minister should take responsibility for the scandals and step down.
In its 2023 assembly election manifesto in Karnataka, the Congress party had promised 80 per cent reservation in all public and private sector jobs in the state.
In 1984, the Sarojini Mahishi Report recommended giving preference to local people while recruiting employees to various industries and other institutions in the state. Pro-Kannada organizations and activists recently staged protests demanding the implementation of the report's recommendations.

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