The Congress government in Karnataka has made a prudent decision by putting the reservation for Kannadigas in private sector jobs on hold. Ideally, the Bill should be scrapped entirely. The state Cabinet’s approval of a draft Bill on July 15, reserving 50% of management and 75% of non-management jobs in private sector companies for Kannadigas, sent shockwaves across the nation. Karnataka, particularly Bengaluru, has earned its status as India’s Information Technology capital and a magnet for direct investment due to its laissez-faire approach towards investors. This Bill threatens to undermine the very foundation of Karnataka’s attractiveness as an investment destination.
The Bill mandates that all management positions up to the Director level be allocated to locals—those born in Karnataka, who have lived there for at least 15 years, and are proficient in Kannada. Similarly, 75% of clerical, skilled, and unskilled jobs would be reserved for locals. This compulsion forces recruiters to lower their hiring standards to comply with government regulations. Consequently, employees selected under this quota will be aware of the preferential basis for their employment, potentially affecting their productivity and loyalty to the company. In the long run, this could harm the efficiency and profitability of private enterprises. No business can thrive without competent staff, and any dilution of hiring standards would drain resources and stifle growth. The scarcity of qualified locals able to compete for these positions is evident in the very need for reservation. If there were sufficient qualified candidates, such a policy would be unnecessary. This reality exposes the potential flaw in the government’s approach. The immediate repercussion could be companies relocating from Karnataka to states with more favourable investment climates, jeopardising the state’s economic prosperity.
A similar policy introduced by the BJP government in Haryana faced significant backlash. Instead of learning from this, the Siddaramaiah government seems to be following the same path to garner local support. However, the local population already reaps numerous benefits from the economic prosperity that such investments bring. Should companies leave, the local community will bear the brunt of the economic downturn. Nonetheless, it is worth noting that employing outsiders for unskilled jobs is not ideal. The government could implement schemes to make hiring local people more attractive for companies, thereby enhancing local employment without coercive measures. This balanced approach would preserve Karnataka’s investment appeal while promoting local employment, ensuring the state’s continued growth and prosperity.