Companies will be forced to relocate, Nasscom expresses "deep concern" over Karnataka's reservation bill

New Delhi [India], July 17 : Industry body Nasscom, which represents the technology and software landscape in the country has expressed its concern regarding the passage of the Karnataka State Employment of Local Industries Factories Establishment Act Bill, 2024.

The Karnataka state cabinet on Monday approved a bill enforcing 50 per cent reservation for administrative posts and 75 per cent for non-administrative posts for Kannadigas in private industries.
Expressing its disappointment The Nasscom urged the state government to withdraw the Bill.
"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. At the same time, the restrictions could force companies to relocate as local skilled talent becomes scarce, the statement read.
Nasscom said that the tech sector contributes to 25 per cent of the state's Gross Domestic Product (GDP), houses a quarter of the country's digital talent, over 11000 startups, and 30 per cent of the total GNU Compiler Collection (GCCs). Restrictions could force companies to relocate as locally skilled talent becomes scarce, the body said.
It further said that The bill's provisions threaten to reverse what the state has achieved in the field of technology and software. It further added that in today's highly competitive landscape, knowledge-led businesses will locate where talent is as attracting skilled workers is crucial for success.
"Nasscom is seeking an urgent meeting for industry representatives with state authorities to discuss the concerns and prevent the state's progress from being derailed," the industry body urged.
Deputy CM DK Shivakumar however allayed the fears of industry saying that the the government would be holding further discussions.
"No investors need to worry. We want investors to come to Karnataka. There are certain sections of the people who are talented and have come from outside the state. We want them to work in Karnataka. Bengaluru's population has grown to 1.4 crores because of the outsiders coming here to work. We just want to give them scope... We are more worried than both the employer and the employee. We will see where we can accommodate Kannadigas..."
Priyank Kharge said, "The bill has been brought in by the labour department. They are yet to consult with the industry, the Minister of Industry and the Department of Information Technology. I am sure that before coming up with the rules of the bill, they will have due consultations with the respective ministries and more importantly, a wider consultation with the industry. So there is no need to panic. We are going to safeguard the jobs for the state as well as encourage investments in the industries with their consultation..."
Earlier on Wednesday, several industry leaders in the state objected to the move, saying that it was "discriminatory" and raised apprehensions that the tech industry may suffer.