Nasscom Urges Karnataka to Scrap Bill Reserving Jobs for Locals in Private Sector
Nasscom Urges Karnataka to Scrap Bill Reserving Jobs for Locals in Private Sector
Industry body warns the bill could force companies to relocate due to a shortage of local skilled talent
The National Association of Software and Service Companies (Nasscom) has demanded the withdrawal of a Karnataka bill aimed at reserving jobs for locals in the private sector, stating that it would compel businesses to relocate. The Karnataka State Government Employment of Local Candidates in Industries Bill, 2024, was cleared by the state cabinet on July 15.
Nasscom expressed disappointment and deep concern over the bill, which mandates a 50 per cent reservation for locals in management jobs and 75 per cent in non-management categories in private firms. The industry body highlighted that these restrictions could lead to a significant talent shortage. This could lead to forcing companies to consider relocating.
“Nasscom members are seriously concerned about the provisions of this bill and urge the state government to withdraw it,” the organization said in a statement on July 17.
Nasscom emphasized the tech sector’s substantial contribution to Karnataka’s economy, noting that it accounts for 25 per cent of the state GDP, houses a quarter of the country’s digital talent, more than 11,000 startups, and 30 per cent of the total Global Capability Centres (GCCs). The bill, Nasscom argued, threatens to reverse this progress, drive away companies, and stifle startups, especially when more global firms are looking to invest in the state.
The industry body has requested an urgent meeting with state authorities to discuss these concerns and help 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,” Nasscom stated.
Karnataka is not the first state to attempt to reserve jobs for locals in the private sector. In November 2023, the Punjab and Haryana High Court struck down a similar law in Haryana, which mandated a 75 per cent reservation for locals in jobs with a monthly salary below ₹30,000. The Haryana law faced criticism for infringing upon constitutional rights and disrupting the skill-based job market.
Nasscom argued that for Karnataka to become a key technology hub, a dual strategy is essential: attracting the best talent worldwide while investing in building a strong local talent pool through formal and vocational channels.
“The government’s move to reserve jobs in the private sector for locals has come in for sharp criticism from industry leaders, who argue that the measure will deter talent and investment from flowing into the state,” Nasscom said. Industry bodies have voiced that such reservations violate the federal structure and are contrary to public interest, benefiting only one class at the expense of others.
