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Bengaluru: Apex IT industry body Nasscom has expressed deep disappointment and concern over Karnataka's quota-for-locals bill mandating reservation for locals in private sector, and has exhorted the state government to withdraw the bill.

Nasscom's strong note of dissent assumes significance as it adds to the growing chorus of top industry voices, which have warned that the legislation would erode the state's edge in technology, and reverse the progress made so far.

The IT industry body has sought an urgent meeting with state authorities to discuss the concerns and "prevent the state's progress from being derailed", the association said.

"Nasscom members are seriously concerned about the provisions of this bill and urge the state government to withdraw the bill. The bill's provisions threaten to reverse this progress, drive away companies, and stifle startups, especially when more global firms (GCCs) are looking to invest in the state," a Nasscom release said.

Stating that the tech sector contributes to 25 per cent of the state GDP, houses a quarter of the country's digital talent, has over 11,000 startups and 30 per cent of the total GCCs, Nasscom contended that the restrictions could force companies to relocate as local skilled talent becomes scarce.

"In today's highly competitive landscape, knowledge-led businesses will locate where talent is as attracting skilled workers is crucial for success... For states to become a key technology hub a dual strategy is key - magnet for best talent worldwide and focussed investment in building a strong talent pool within the state through formal and vocational channels," it said.

The technology sector has been crucial to Karnataka’s economic and social development, with Bengaluru known globally as India's Silicon Valley.

"The technology sector contributes almost 25 per cent of the state GDP and has played a key role in enabling higher growth for the state, higher per capita income than the national average. With over a quarter of India’s digital talent, the state houses over 30 per cent of the total GCCs and around 11,000 start-ups," it said.

Nasscom rued that it is "deeply disturbing" to see this kind of bill which will not only hamper the growth of the industry, but impact jobs and the global brand for the state.

The Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024 was approved by the state cabinet on Monday, and it seeks to reserve 50 per cent of management positions and 75 per cent of non-management positions in the private sector for locals.

The Bill has triggered controversy and criticism from across industry. Industry veteran Mohandas Pai termed the Bill "very regressive", and "draconian".

Bengaluru: The Congress government in Karnataka on Wednesday defended its move to reserve jobs in private sector for Kannadigas in the state, even as industry veterans objected to the proposed quota, calling it 'fascist,' and 'short-sighted.' The government also sought to reach out to the private sector, saying their interests will be protected.

The state cabinet on Monday cleared the Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024, making it compulsory for private firms to reserve jobs for Kannadigas in their establishments. It is likely to be tabled in the Assembly on Thursday.

"Any industry, factory or other establishments shall appoint fifty percent of local candidates in management categories and seventy percent in non-management categories," the bill read.

If the candidates do not possess secondary school certificate with Kannada as a language, they should then pass a Kannada proficiency test as specified by the 'Nodal Agency', it added.

The nodal agency will have powers to call for any records, information or documents in the possession of an employer or occupier or manager of an establishment for the purpose of verifying the report.

The Government may appoint an officer not below the rank of Assistant Labour Commissioner as the authorised officer regarding compliance of the provisions of the Act.

Any Employer or Occupier or Manager of an Establishment, who contravenes the provisions of this Act should be liable for a penalty between Rs 10,000 to Rs 25,000.

Hailing the bill, Karnataka Deputy Chief Minister D K Shivakumar said, "The Congress came to power in Karnataka to uphold the dignity of the Kannadigas--be it the issue of signboards of private establishments, the Kannada flag, Kannada language, culture, documents or specific percentage of reservation in jobs for Kannadigas."

Minister for Infrastructure Development, Medium and Heavy Industries M B Patil also backed the bill saying there is no doubt that Kannadigas should get jobs in Karnataka.

He, however, underlined that the interests of the industries will also be safeguarded.

"In private sector, certain ranks of posts will be reserved 100 percent for Kannadigas. The interests of industries will also be protected." In a statement issued by his office, the Minister was quoted as saying that he will discuss with Chief Minister Siddaramaiah, IT-BT, Law and Labour Ministers in the event of any confusion in the bill.

"The government will also work on the skill development of Kannadigas. We cannot miss the bright opportunities of manufacturing sector and industrial revolution," he said.

"This bill will be discussed with all concerned. There is no need to worry in this regard," Patil said.

The move, however, has not gone down well with industry leaders.

Well-known entrepreneur and former Chief Finance Officer of Infosys, TV Mohandas Pai dubbed the bill as "fascist."

"This bill should be junked. It is discriminatory, regressive and against the constitution @Jairam_Ramesh (Congress leader) is govt to certify who we are? This is a fascist bill as in Animal Farm, unbelievable that @INCIndia can come up with a bill like this- a govt officer will sit on recruitment committees of private sector? People have to take a language test?" Pai said on 'X'.

Pharma company Biocon Managing Director Kiran Mazumdar Shaw said, "As a tech hub we need skilled talent and whilst the aim is to provide jobs for locals, we must not affect our leading position in technology by this move. There must be caveats that exempt highly skilled recruitment from this policy."

ASSOCHAM, Karnataka co-chairman R K Misra said on 'X', "Another genius move from Govt of Karnataka. Mandate LOCAL RESERVATION & APPOINT GOVT OFFICER IN EVERY COMPANY to monitor. This will scare Indian IT & GCCs. Short sighted."

Karnataka's move is similar to a bill introduced by the Haryana government, mandating 75 per cent reservation in private sector jobs to the residents of the state. It was, however, struck down the Punjab and Haryana High Court on November 17, 2023.

Bengaluru, Jul 16: Karnataka Deputy Chief Minister, DK Shivakumar expressed his displeasure over the Central Bureau of Investigation's (CBI) handling of his Disproportionate Assets (DA) case, stating that the agency was overstepping its limits.

Speaking to the media on Tuesday at the Vidhana Soudha in Bengaluru, Dy CM Shivakumar said, "The state government has referred the same case to the Lokayukta, which is currently investigating it. I don't understand why the CBI is going beyond its limits in their investigation."

He added, "I will meet them personally soon and convey my objections. I have done nothing wrong, and they are trying to harass many unconnected people. I'm confident that I've done nothing wrong."

When asked about Union Minister for Heavy Industries and Steel, HD Kumaraswamy's criticism over the all-party meeting on the release of Cauvery water to Tamil Nadu, Dy CM Shivakumar accused him of not taking interest in the Cauvery dispute.

He is not bothered about the interests of Karnataka, he stated.

"Kumaraswamy only makes allegations in a dramatic style. He is nursing a grudge against me and harbouring envy. He has been doing this since the beginning, which is why I'm asking him for a discussion," he stated.