Siddaramaiah-led Karnataka Government In Damage Control Mode

The Siddaramaiah-led Karnataka government has done well to put on hold its Cabinet decision to reserve a major portion of jobs for Kannadigas. These quotas were to be applicable in different sectors, including Information Technology and related segments.

The decision to keep the Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024, on hold was taken, following the sharp backlash from industry captains.

One startup founder, who remains anonymous, summed up the mood of the industry in general with his comment on X, posting that the state government’s decision could well force industries to say “RIP to Karnataka”. He added that, “global tech giants are not here for our dosas. It is a diverse talent pool, genius! Now you want to slap a ‘Kannada only’ sign on it.”

He was quoted by ‘MoneyControl’ as saying that “we are already bleeding talent to Hyderabad and Pune. This is handing them our workforce gift-wrapped. I've spent a decade building my company here. Now I am eyeing Chennai. RIP Bangalore tech scene, 1990-2024. Cause of death: linguistic chauvinism and political myopia.”

Rubbing salt into the wound, as it were, the Andhra Pradesh government quickly sensed an opportunity to woo businessmen from Karnataka. Minister Nara Lokesh invited “Nasscom members to relocate their IT business to Andhra Pradesh, which offers the best facilities in terms of power, infrastructure and skilled talent.” Kerala too invited the shocked industrialists from Karnataka.

The proposed Bill which has now been deferred, stipulated 50 percent reservation at the managerial level, and 70 percent reservation for non managerial roles, for Kannadigas.

This predictably led to an outcry from different sections of industry ,including the National Association of Software and Service Companies, in addition to the Confederation of Industry, Federation of Karnataka Chamber of Commerce and Industry, along with Kiran Majumdar, chairperson Biocon, and Mohan Das Pai, a former Infosys Chief Finance Officer.

Even as the government claimed that the idea behind the move was to ensure that the locals were provided enough jobs, the hasty manner in which its ministers, led by the CM, backtracked on the quota issue, clearly indicated a lack of understanding of the sensitive subject.

The hurried initiative appeared to be an attempt to divert attention from the controversies plaguing the Siddaramaiah government. These include an allegation against the CM himself over land allotment to his wife coupled with the multi-crore scam in the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation where over Rs 90 crore was allegedly pilfered.

After the flood of dissent from the industry, the CM deleted his post on job reservation on X, followed by statements from the industry and IT ministers. Priyank Kharge, IT minister, claimed that his department had requested the CM to have wider consultations with the industry on the issue, adding that there was no need to panic. “The clauses in the Bill are just suggestions. If the industry feels these are not required, we will look into it,” he said.

Industry minister, M. B. Patil added his bit to the confusion by promising to address the concerns of the industry, asserting that he would discuss the matter with the CM and allied ministers. “Karnataka is a progressive state, and we cannot afford to lose in this once-in- a-century race of industrialisation.

“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” Patil said.

However, these belated reactions confirm that the ruling party and its leaders did not do their homework. A little bit of research would have shown them that the Bharatiya Janata Party-ruled Haryana had also proposed reservation of jobs in the private sector. However, the Faridabad Industry Association approached the Punjab and Haryana High Court in protest against the move.

The court upheld the association’s petition, following which the state approached the Supreme Court where the matter is pending now.

Even Andhra Pradesh and Jharkhand, had proposed reservation of jobs for the locals in their state. the matter which may also be listed in the Apex Court now. In fact, Jharkhand had planned to reserve jobs for the locals in government jobs.

All that the Karnataka government needed to do was to consult the industry to seek its views on ensuring that the locals also got a fair share of jobs and also provide the needed skills to meet the job requirement.

The corporate sector gets enough rebates from the Union government for its Corporate Social Responsibility (CSR) initiative. This is something that the state government could have tapped effectively, after discussions with different industry associations. This would have helped save the government from the embarrassment it is now facing.

Ironically, Karnataka which is home to over 570 Global Capability Centres is seeking to host over 2000 enterprises in the state, to turn it into a GCC hub, according to a report released by the state’s Department of Electronics IT/BT section and the Karnataka Digital Economy Mission( KDEM), with a focus on encouraging more firms to invest in the state.

State IT minister Kharge had gone on record saying “we are implementing strategic interventions and facilitators to establish a resilient business and operational ecosystem for GCCs.”

In the light of these assertions, it is not surprising to find that the industry in general, was at a loss to understand the motive behind the Siddaramaiah government’s job quota move. The move is also violative of Article 14 of the Constitution, which provides for freedom of employment across the country.

It is here that the sound advice from I.N.D.I.A bloc member, Sharad Pawar, chief of the Nationalist Congress Party, could have come in handy for the ruling party in Karnataka. When asked about the move by the Siddaramaiah government on reservation of jobs for the locals, Pawar was quoted by the ‘Economic Times’ as saying that the “Karnataka government’s decision will not be upheld in the court. It will be struck down.”