Karnataka Puts Private Sector Reservation Bill on Hold Following Industry Backlash 

After severe backlash, the Karnataka government has halted the controversial Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024. The bill makes it mandatory to provide 50 per cent reservation for local candidates in managerial positions.  

Further, it says that there should be 70 per cent reservation for locals in the non-managerial roles. The Bill defines "local candidates" as individuals born in the state or resided in Karnataka for at least 15 years. Additionally, the candidates must be able to speak, read, and write Kannada proficiently, having passed a necessary test administered by a designated agency. 

Karnataka Chief Minister Siddaramaiah had earlier announced on X (formerly Twitter) that the bill would provide 100 per cent reservation for Kannadigas in C and D categories. However, amid criticisms the post was deleted, and a revised announcement was made.  

Taking to X (formerly Twitter), M B Patil, Minister for Commerce & Industries, Infrastructure, wrote, “Honble CM has taken due cognizance. Bill is withheld until further consultations and due diligence. Industry leaders needn’t panic as assured. The government is committed to further creation of jobs, and furthermore for Kannadigas, however in a more amicable manner.” 

The decision by the government came after widespread panic and uncertainty prevailed in the industry about the bill. Warning that the bill might force companies to relocate, National Association of Software and Service Companies (NASSCOM), said, “Nasscom members are seriously concerned about the provisions of this bill and urge the State government to withdraw the bill. The bill’s provisions threaten to reverse this progress, drive away companies, and stifle start-ups.” 

Biocon Managing Director Kiran Mazumdar Shaw said, "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." 

Karnataka's move is similar to a bill introduced by the Haryana government, mandating 75 per cent reservation in private sector jobs to residents of the state. It was, however, struck down by the Punjab and Haryana High Court on November 17, 2023. 

(With inputs from PTI)