In the wake of sharp protest and opposition from India Inc, the Siddaramaiah-led Karnataka government has put the Karnataka jobs quota bill on hold. But why is it controversial?
The bill proposes that industries and factories operating in Karnataka must appoint 50 percent local persons in management and 75 percent in non-management jobs. And if a suitable local candidate is not available, the company should take steps to train and engage locals within three years.
The editorials said that the proposed law is likely to fail the constitutional test, is discriminatory, and a burden on the companies.
The Indian Express editorial, headlined “Why Karnataka’s Bill on quota for locals in private sector should be dropped”, said that the Bill is “highly problematic” and “does not measure up to the constitutional letter and spirit”.
It mentioned three reasons why such policy moves are “misconceived”. “The first issue, as the Punjab and Haryana pointed out, is of discrimination – the proposed law seeks to curb some citizens’ constitutionally protected freedom to move freely throughout the territory India and earn a livelihood. The second problem would be reintroduction of the dreaded inspector-raj, where a set of bureaucrats will be empowered to decide whether a firm should attract a penalty or be allowed to employ people from outside the state. Rent-seeking is a given in such a framework. The third, and often ignored aspect of such a law is the impact it will have on the private sector. By now it is clear that there is no way governments in India — both at the Centre and state — can create enough jobs for India’s youth. The solution lies in making it easy for the private sector to grow and create new jobs. Such a law will militate against such job creation. It will raise compliance costs for private firms while undermining their ability to attract the best talent and reducing their overall efficiency and profitability.”
The Deccan Herald’s editorial was titled “Local quota in private sector a shaky idea”. It said the state “cannot direct private employers to do what is forbidden under the Constitution. It cannot discriminate against individuals who do not belong to a certain state as it amounts to discrimination against other citizens of India, the court held. The Karnataka Bill falls into the same bracket. The draft Bill also infringes upon Article 14 (equality before law), as a fundamental wedge is sought to be created between people domiciled in different states, which is contrary to the concept of common citizenship provided in the Constitution.”
It added, “If the Congress government was floating a trial balloon, it has received clear feedback: Industry leaders and bodies, including Nasscom, expressed apprehension and shock over the proposal on the grounds that it would deter talent and investment from flowing into the state, besides leading to a flight of capital.”
The editorial in Hindustan Times was headlined “Karnataka must junk quota non-solution”. It said the bill is “not just regressive, but also may not prove to be the political quick fix the government wants”.
“The income gulf between the migrant IT and largely local non-IT crowds has translated into consumption pressures for the latter, including in housing. While the political need to address this discontentment as well as create more jobs for locals is understandable, the quotas being prescribed are hardly the solution. Bengaluru is built on migrant labour and capital.”
It said that “forcing firms to look within the local talent pool for half of managerial and 70 percent of non-managerial jobs, with onerous compliances, would surely impact the state’s growth momentum”.
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