Explainer: A lowdown on Karnataka’s draft bill for local quota in govt jobs
The draft bill mandates 50% reservation for locals in managerial positions and 75% in non-managerial positions
The Karnataka cabinet chaired by chief minster Siddaramaiah on Tuesday approved a draft bill to provide reservation in private sector jobs in the state, evoking a strong reaction from the industry leaders. A lowdown on the bill provisions and its possible implications:
Main provisions of the Bill
The bill mandates 50% reservation for locals in managerial positions and 75% in non-managerial positions. In case enough eligible candidates are not available, the industry in collaboration with government will have to train local candidates in three years and engage them. So effectively, the government is proposing to provide three years to industry to implement provisions of the proposed law.
Even after three years the industry faces problems, the bill provides the government powers to exempt the industry from reservation provisions after an inquiry into their claim of not finding enough suitable locals for employment even after training. Officials said the exemption is to provide companies with the opportunity to employ professionals for highly specialised work.
However, the exemption will be provided only if 25% of managerial positions and 50% of non-managerial positions are filled by locals.
Who are locals?
A person born in Karnataka, who is domiciled in the state for 15 years, and is well versed with reading and writing Kannada language is defined as a local in the bill. Those seeking benefit under the law will have to clear a language proficiency test of the state government. Those who don’t have Kannada at senior secondary level will have to clear the test to take benefit under the proposed law.
Difference between managerial and non-managerial jobs
The managerial category covers positions in supervisory, technical, operational and administrative roles excluding directors. All other positions such as clerical positions, semi and skilled workers including outsourced jobs are under non-managerial category. The categorisation has been done to enable the industry to find suitable people for both categories, officials said. 50% reservation for managerial jobs and 75% for non-managerial.
Who will implement the law?
The bill provides the government will appoint an agency to implement the provisions of the law. Most likely the labour department will be the nodal agency for the same. The authority will have powers to seek reports on appointments in both managerial and non-managerial positions from industry periodically and conduct inquiry in case of non-compliance. The agency can seek any documents from the employer to verify the claims made in periodic reports, as per the bill. Officials said the agency officials will also have power to inspect industry, if needed. The authority can appoint an officer not below the rank of assistant labour commissioner for implementation of the proposed law.
Proposed Penalties
For contravention of the proposed law, the minimum penalty of ₹10,000 and maximum of ₹25,000 has been prescribed. For continued violation of the law, the penalty amount can be increased to ₹1 lakh. There is no jail provision. The bill also provides for limitation to prosecution for six months meaning that no court can take cognizance of the offence under the proposed law after six months.
Its possible implications
The Bengaluru technology industry worth $ 245 billion having workforce of 1.5 million can face adverse impact of the proposed law as most of the people working there are non-Kannadigas. Industry leaders said the proposed law would push the top-grade industry out of the state to other places, where the law is more industry friendly.
Nasscom in a statement said that the Information Technology sector contributes 25% of the states’s GDP and houses a quarter of country’s digital talent. “Restrictions could force companies to relocate as local skilled talent becomes scarce,” the Nasscom said.
According to the state government, Bengaluru contributes 43.86% to Karnataka’s economy. Karnataka contributes 7% of the national GDP as per state finance department estimates presented in the budget for 2022-23. Industry experts said the restrictions in the bill could impact state government plans for a one trillion-dollar economy in the next five years.
Similar legal provisions elsewhere
Andhra Pradesh and Haryana were among the first states to reserve jobs in private sector in India. Both the states have provided reservations for jobs with a salary cap. In the case of Haryana, reservations up to 75% were applicable for jobs with monthly salary of ₹30,000 and in the case of Andhra, the monthly salary cap for 75% reservation was ₹50,000. The Karnataka bill does not provide a salary cap and imposes quota on all private sector jobs except that of directors. However, like Andhra Pradesh, Karnataka has also provided three years to the industry to implement the law, once passed by the state legislature.
Legal tangles
The proposed law can face legal hurdles. In 2020, Haryana enacted Haryana State Employment of Local Candidates Act, providing for 75% reservation in private sector jobs for locals for wages up to ₹30,000 and it was challenged in the Punjab and Haryana high court. The high court in 2022 quashed the law terming it ultra vires of Part III of the Constitution and violative of Article 14 and 19 of the Constitution which provides for freedom of employment across India.