Karnataka Cabinet Approves Bill for 50% Reservation for Locals in Management Jobs, 70% in Non-Management Roles

The Karnataka Cabinet has approved a new bill that has made provisions for extending huge employment reservations to local candidates in management and non-management positions in industries, factories, and other establishments situated in the state. This historic law goes by the name of the Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024. This is aimed at promoting local employment and toward tackling the long-pending demand for reservations in jobs for Kannadigas.

Key Provisions of the Bill

Reservation Mandate: It makes the reservation of 50% of the management and 70% of the non-management posts in any industry or establishment incumbent upon the local candidates.

Local Candidate Definition: A local candidate means a person born in Karnataka, domiciled in the state for a period of not less than 15 years, having knowledge of reading, writing, and speaking Kannada, and who has passed a test conducted by any Nodal Agency as may be designated.

Eligibility Criteria: The applicant shall pass the secondary school certificate examination with Kannada as one of the languages or should pass any Kannada language test introduced by the government.

Training and Exemption: In case of nonavailability of eligible local candidates, the industries shall undertake training of locally available candidates in coordination with the government within three years. Where sufficient local candidates are not available to industries on account of nonavailability after training, the exemption from the provisions shall be granted to such industries on the recommendations of the government, whose decision shall be final.

Minimum Reservation: As per the bill, percentage of local candidates shall not be less than 25 percent in management position and 50 percent in non-management. Violation may lead to penalties ranging from ₹10,000 to ₹25,000.

Possible Adverse Impact

Impact on Diversity

This may negatively impact the diversity in Karnataka’s workforce. As this new mandate prioritizes appointments of local candidates, it will be difficult to find the right people from different walks of culture and geography.

Diversity is an important component of innovation and creativity at the workplace, for this will have different points of view and ideas. This reduces the pool of candidates which can affect the inclusive climate most businesses try to achieve, reducing creativity and problem-solving capabilities.

Degradation of Human Resource Quality

The legislation has the potential to degrade the overall quality of human resources within the state. Forcing local hiring quotas rigidly can cause companies to hire less qualified candidates just to meet the set percentages. The impact may be a degradation in the standard of expertise and skills in the workforce.

Gradually, the deterioration of the quality of human resources will negatively impact the productivity and efficiency level of the concerned businesses in Karnataka, operating in both national and global marketplaces.

Negative Effects on State Growth and Business Operations

The emphasis on local employment can also bring a negative impact on the growth of the state and the business’ operational activities. Many times, companies require highly specialized skills and expertise that cannot be easily found locally.

Therefore, mandated reservations will result in qualified shortages which will force the companies to heavily invest in training and developmental programs. This adds to the operational costs but delays business processes and innovation.

Moreover, the companies can review their decision to set up their operations here in Karnataka State. This can shift to areas with more lenient policies in recruitment, ultimately affecting investment and economic growth.

History and Response 

The reason for passing the bill is due to pressure for addressing the decades’ demands for reservations of quota jobs to locals. Earlier this month, Kannada outfits took out rallies across the state demanding immediate implementation of the Sarojini Mahishi report that recommended hefty job reservations for locals in both government and private sectors.

The report of the Mahishi Committee, headed by the former Union Minister Sarojini Mahishi, consisting of 58 recommendations, which included matters relating to 100 percent reservation for locals in Group C and D jobs in Central government departments and public sector undertakings in the State of Karnataka, was submitted in 1984.

Next Steps

The cabinet draft, cleared at a Cabinet meeting chaired by Chief Minister Siddaramaiah on July 15, 2024, will be tabled in the ongoing legislature session for further debate and approval. This legislation, if enacted, will bring about a tectonic shift in the employment policies of Karnataka while making serious efforts to strengthen local employment and see that Kannadigas directly benefit from the economic growth of the state.

This new policy thus underlines the seriousness of the government toward the concerns of local employment, as well as its commitment to addressing a long-pending demand made by Kannada-speaking populations. Still, the possible negative impacts on diversity, human resource quality, and business operations bring out the need to strike a balance between gains toward local employment and other wider economic implications.