Playing Karnataka’s pride card a little too hard may prove counter-productive for the state, especially in terms of reservations on the job issue. While the Siddaramaiah-led Karnataka government has decided to tweak the bill after its withdrawal, its stand to save jobs for ‘Kannadigas’ in managerial and clerical roles in the private sector remains, prompting neighboring states to put up a ‘welcome card’.
The controversial bill, approved by the Siddaramaiah government, mandates the appointment of Kannadigas to 50 per cent management positions and 75 per cent non-management positions. In addition, it requires the hiring of 100 percent Kannadigas for “C and D” grade posts in all private industries in the country. However, the third point that caused outrage is still under review, and the bill is currently on hold.
Despite assurances from Karnataka Deputy Chief Minister DK Shivakumar and IT Minister Priyank Kharge, the impact of the industry in Karnataka has been left behind by the new legislation.
‘Disappointed And Concerned’
NASSCOM, the IT industry body, wrote a scathing letter to the Karnataka government, asking them to reverse the decision. They say it will reverse progress, drive companies away, and prevent start-ups, especially as global companies will invest in the country.
Calling the move disappointing and deeply concerned, NASSCOM stated that giving significant reservation to locals would harm the technology sector and the talent pool. He pointed out that Karnataka’s economy, which contributes 25 percent to the country’s GDP and makes up more than 30 percent of the total Global Capability Center (GCC), may be affected by the decision, disrupting future investments.
Please Contact: Andhra Minister for Business
Neighboring Andhra Pradesh found the time right to attract investment to their state. AP, under the newly elected TDP government led by Chandrababu Naidu and his son and IT Minister Nara Lokesh, gave NASSCOM an opportunity to expand or shift its business to Visakhapatnam if it finds Karnataka unprofitable.
On X (before Twitter), Lokesh wrote, “We welcome you to expand or relocate your business to IT, IT services, AI, and data center clusters in Vizag…Andhra Pradesh is ready to welcome you. Please get in touch!”
Adding a surprising touch, the Andhra Pradesh Minister also assured that his state will provide the most appropriate power, infrastructure and skilled talent to the company without any government restrictions.
We Are Just Call Away: Karnataka Minister to NASSCOM
“This is your Government, and as always, we are just calling,” tweeted Karnataka IT Minister Priyank Kharge, who immediately went into firefighting mode. He assured NASSCOM that the government will not take any decision that cannot withstand legal scrutiny.
Kharge also had a sub-nationalism counter-pitch to his AP counterpart Lokesh, asking if he also didn’t want to ensure that every company that invests in AP employs deserving, trained and skilled workers from Andhra Pradesh.
Countries With Equal Quotas
In 2019, the Andhra Pradesh Assembly has passed a bill to save 75 percent of jobs for local candidates. The Andhra Pradesh Employment of Local Candidates in the Industries/Factories Bill mandates reservation of up to 75 percent for jobs with a monthly salary of Rs 30,000. However, in 2020, the Andhra Pradesh High Court said the bill “may be unconstitutional”.
In 2020, Haryana also passed a similar bill that will provide 75 percent of jobs with a monthly salary of up to Rs 30,000 in the private sector to local residents. However, the bill was challenged in the Punjab and Haryana High Court, which struck it down. The bill is currently before the Supreme Court after the Haryana government challenged the High Court order.
How Karnataka Missed Opportunities over the years
There have been several instances where Karnataka has lost multi-crore business transactions due to delayed land acquisition, EV-unfriendly legislation, or delayed response to industries seeking to set up shop.
The latest incident was in June this year when Bengaluru-based electric two-wheeler manufacturer Ather Energy made Maharashtra its home to set up its new and third manufacturing facility. It turned into a political blame game, with the BJP criticizing the Congress for its lack of effort and initiative to retain the company. The Congress countered by saying that it was the previous BJP government in Karnataka that forced Ather to move to Maharashtra due to inadequate land allocation. Ather has sought 50 hectares for the plant, while the government has sanctioned only 35 hectares, of which 5 hectares are considered disputed.
Frustrated with the back-and-forth politics, Ather set up a factory in Aurangabad Industrial City (AURIC) in Maharashtra with an investment of Rs 2,000 crore.
In February 2023, during the Basavaraj Bommai-led BJP government, Karnataka saw another electric vehicle manufacturer leave its land for neighboring Tamil Nadu. Ola Electric, with plans to set up an EV hub in Karnataka, faced disappointment when the BJP government could not provide the required land. Industry leaders have called for changes in EV policy to make Karnataka more investor-friendly. Ola then announced plans to set up the world’s largest EV hub in Tamil Nadu and signed a Memorandum of Understanding (MoU) to invest Rs 7,614 crore, including the world’s largest EV hub with 2W gigafactories, cars, and integrated lithium cells.
In June 2016, under the Congress government when Siddaramaiah was the chief minister, another two-wheeler giant, Triumph Motorcycles India, decided to pull investment from Karnataka. It initially planned to build a manufacturing facility in Kolar district on 30 acres of land in the Narasapura Industrial Estate, with an investment of Rs 850 crore. The company said that despite several reminders and redressal of their grievances, the state government did not respond, hence they had to move to Manesar.
Triumph has also paid an undisclosed amount as an advance to the Karnataka Industrial Area Development Board (KIADB) towards the acquisition and allotment of land, but they are facing some problems related to the land that is not sorted out by the government, forcing them to look elsewhere. He even asked for the return of the investment made for KIADB.
So, the big question is, will this game of sub-nationalism bear fruit other than political posturing? Are there lessons from past experiences? It clearly helps to play Kannadiga pride, but the growth of the country is measured by development, infrastructure, and investment- showing one’s local pride is just icing on the cake.