Karnataka Approves Bill to Reserve 50% to 70% Jobs for Locals a.k.a 'Kannadigas'

The Karnataka government has approved a legislation that mandates private industries to hire only locals, or people known as "Kannadigas", in certain job categories.

The state government has approved a bill mandating 50%-70% jobs for Kannadigas in companies.

Notably, Karnataka's capital, Bengaluru, houses thousands of startups and global firms ranging from Amazon, Facebook, Microsoft, Walmart, and Google. Infosys and Wipro - two Indian tech giants, also operate from the city.

This bill could have several implications for both Indian and global firms, operating in Karnataka. Global companies with operations in Karnataka may need to adjust their workforce composition to meet the local hiring requirements. They'll have to prioritize hiring Kannadiga candidates for management and non-management roles as per the specified percentages.

The key provisions of the Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024 are as below –

Local Candidates: The bill defines a 'local candidate' as an individual born in Karnataka, residing in the state for at least 15 years, fluent in Kannada, and passing a test administered by the nodal agency.

Reservation Percentages

1. Management Categories: Industries, factories, and other establishments must appoint 50% local candidates in management roles.
2. Non-Management Categories: 75% reservation for local candidates in non-management positions.

Qualification Criteria

Candidates must have a secondary school certificate with Kannada as a language or pass a Kannada proficiency test set by a designated nodal agency.

If qualified local candidates are not available, establishments should train and engage local candidates within three years.

Relaxation Clause

If sufficient local candidates are not available, establishments can apply for relaxation from the provisions, subject to government approval.

Penalties

Violation of the provisions can attract a penalty of up to Rs 25,000.

A nodal agency will verify employment reports, and companies failing to comply will face penalties.

As per state government officials, this bill aims to promote local employment, however it has also faced criticism for potential discrimination.

Implications

The Karnataka State Employment of Local Candidates in the Industries, Factories and Other Establishments Bill, 2024 could have several implications for global firms operating in Karnataka such as finding qualified local candidates for specialized roles might be challenging, especially in technology, AI, and semiconductor industries.Companies may need to invest in skill development and training programs to bridge any gaps.

Establishments will need to allocate resources for compliance monitoring, documentation, and reporting. Non-compliance could result in penalties, impacting a company's financials.

Companies may evaluate their long-term viability in Karnataka based on the feasibility of meeting local hiring quotas. Some firms might consider diversifying their operations across states with different regulations.

Technology firms, including those in the semiconductor industry, may face unique challenges due to the specialized nature of their workforce. Renewable energy and waste management companies may need to adapt their hiring strategies.

Remember, the bill aims to boost local employment, but its implementation and impact will be closely watched by businesses and policymakers alike.

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