Nasscom Demands Repeal Of Karnataka Job Reservation Bill, Citing Relocation Threats

Karnataka Job Reservation Bill: Nasscom expressed its disappointment and deep concern over the Karnataka government's employment bill, which was approved by the state cabinet on July 15

Karnataka Job Reservation Bill: The National Association of Software and Service Companies (Nasscom) has called for the scrapping of a new Karnataka bill that mandates job reservations for locals in the private sector, warning that it could force businesses to move out of the state.

In a statement released on Wednesday, Nasscom expressed its disappointment and deep concern over the Karnataka State Government Employment of Local Candidates in Industries Bill, 2024, which was approved by the state cabinet on July 15.

"Nasscom members are seriously concerned about the provisions of this bill and urge the state government to withdraw the bill," the industry body stated.

The bill, passed in a cabinet meeting led by Chief Minister Siddaramaiah, requires private companies to reserve 50 per cent of management jobs and 75 per cent of non-management positions for local candidates.

Nasscom argued that these restrictions would lead to a talent shortage, compelling companies to relocate. The tech sector, which contributes 25 percent to Karnataka's GDP and houses a quarter of India’s digital talent, over 11,000 start-ups, and 30 per cent of the country's Global Capability Centres (GCCs), could be significantly impacted.

The industry body warned that the bill could reverse progress, drive away companies, and stifle start-ups, particularly as more global firms and GCCs consider investing in Karnataka.

Nasscom has requested an urgent meeting with state authorities to discuss these concerns and prevent potential setbacks to the state's progress. "It's deeply disturbing to see this kind of bill which will not only hamper the growth of the industry but also impact jobs and the global brand for the state," the statement added.

Despite Karnataka's large talent pool, Nasscom highlighted a significant shortage of skilled workers. The organisation highlighted the importance of a dual strategy for states aiming to become key technology hubs, attracting global talent and investing in building a robust local talent pool through formal and vocational education channels.

The government's move to reserve jobs in the private sector for locals has faced sharp criticism from industry leaders, who argue that it will deter talent and investment from entering the state.

However, Karnataka is not the first state to attempt such measures. Haryana's recent effort to reserve 75 per cent of jobs for locals, in positions with monthly salaries below Rs 30,000, was struck down by the Punjab and Haryana High Court in November 2023.