Restrictions could force companies to relocate: Nasscom on Karnataka's job reservation bill

Bengaluru: The National Association of Software and Service Companies (NASSCOM) on Wednesday expressed disappointment and concern over Karnataka's new bill mandating reservation for locals in private sector jobs.

The Karnataka State Employment of Local Industries Factories Establishment Act Bill, 2024 states that private firms should recruit Kannadigas in Group C and D category posts.

Also, it requires private firms to give priority to local candidates in the jobs.

In a statement, the tech body said, "Nasscom and its members are disappointed and express deep concern regarding the passage of the Karnataka State Employment of Local Industries Factories Establishment Act Bill, 2024." NASSCOM is an Indian non-governmental trade association and advocacy group that primarily serves the Indian technology industry.

The association noted that the tech sector contributes 25 per cent of the state's Gross Domestic Product, houses a quarter of the country's digital talent, over 11, 000 start-ups and 30 per cent of the total Global Capacity Centres.

"Restrictions could force companies to relocate as local skilled talent becomes scarce," it cautioned.

In today's highly competitive landscape, knowledge-led businesses will locate where talent is available and attracting skilled workers is crucial for success, it pointed out.

Globally, there is a huge shortage for skilled talent and Karnataka despite the large pool, is no exception. The technology sector has been crucial to Karnataka's economic and social development, with Bengaluru known globally as India's Silicon Valley.

NASSCOM expressed "serious concern" about the provisions of this bill and urged the state government to withdraw it.

"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 association said it is seeking an urgent meeting for industry representatives with state authorities to raise concerns and prevent the state's progress from being derailed.