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Industry body Nasscom has strongly criticised the decision of the Karnataka government to introduce a bill that mandates reservation of jobs for locals in the private sector, stating it would reverse the progress made by the technology industry in the State and force companies to relocate to other states.

“Nasscom members are seriously concerned about the provisions of this bill and urge the state government to withdraw the bill,” said a statement by Nasscom.

The Karnataka State Employment of Local Industries Factories Establishment Act Bill, 2024, mandates 50% reservation for administrative posts and 75% reservation for non-administrative posts for Kannadigas in private industries and other organisations. This Bill has been passed by the State Cabinet and is yet to get approval from the legislature.

Nasscom highlighted that 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% of the state’s GDP and has played a key role in enabling higher growth for the state, higher per capita income than the national average.

Karnataka today houses over 30% of the total global capability centres and around 11,000 startups. “It’s deeply disturbing to see this kind of bill, which will not only hamper the growth of the industry, impact jobs and the global brand for the state,” the statement said.

Nasscom emphasised that 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.