India’s tech hub Karnataka approves controversial bill reserving jobs for locals

The state government of Karnataka, home to India’s tech hub, has approved a bill mandating companies to allocate 50%-70% of jobs to local candidates. This move could pose challenges for global firms operating in the region to attract top talent.

The bill, approved by the Karnataka cabinet on Tuesday, requires employers to give 50% of management roles and 70% of non-management positions to locals, with a 100% quota for locals in “C&D” grade government jobs. However, the bill still needs clearance from the state legislature to become law.

Bengaluru, with a population of approximately 14 million, hosts thousands of Indian startups and international firms, including major players like Walmart, Google, Infosys, and Wipro. Industry leaders have criticized the bill, arguing it would discriminate against non-local workers and hinder talent acquisition.

“There must be caveats that exempt highly skilled recruitment from this policy,” said Kiran Mazumdar-Shaw, executive chairperson of Biocon Limited, emphasizing the need for skilled talent to maintain Bengaluru’s leading position in the technology sector.

Mohandas Pai, former Chief Financial Officer of Infosys, took social media to  condemned the bill as “discriminatory, regressive, and unconstitutional,” calling for its immediate withdrawal. He suggested instead investing in higher education and skill development for locals.

“This is a fascist bill as in Animal Farm,” wrote Pai, criticizing the provision for government officials to sit on private sector recruitment committees and the potential requirement for language tests.

The IT industry body Nasscom also urged the state government to retract the bill. ASSOCHAM Karnataka co-chairman RK Misra labeled the move as “shortsighted,” expressing concerns about its impact on Indian IT companies and Global Capability Centers (GCCs). Dr. Chi VSV Prasad, Managing Director of Swarna Group, warned that such restrictions could lead to labor shortages and even industry closures.

In an attempt to mitigate the backlash, Karnataka Chief Minister Siddaramaiah deleted his tweet announcing the 100% quota for Kannadigas in “Group C and Group D” jobs. Labour Minister Santosh Lad also issued clarifications.

Minister Priyank Kharge assured stakeholders of consultations with relevant ministries and the industry before finalizing the bill’s implementation procedures. “The bill is with the labour department,” Kharge said. “They haven’t yet consulted with the Industry or IT departments. I am confident they will hold proper consultations with all stakeholders before finalizing the rules. There’s no need to panic. We aim to safeguard jobs for Kannadigas while also encouraging investment through consultations.”

This legislative push in Karnataka follows a similar attempt by the northern state of Haryana in 2020 to impose a 75% job quota for locals, which was later overturned by a court. Political analyst Sandeep Shastri noted that the move reflects a growing sentiment for greater local protectionism in urban parts of Karnataka.

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