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March 22, 2018

Karnataka planing to introduce 100% Kannada reservation in blue collar jobs, industry may face severe ‘Skill Shortage’

Rather than cancelling all concessions to private sector companies for employing workers from other states in blue-collar jobs, Karnataka should increase incentives to companies that promote employment of locals, say industrialists and other industry bodies.

The state government is planning to introduce 100% reservation for Kannadigas in blue-collar jobs in the private sector for which it has released a draft amendment to the Karnataka State Employment rules. While many lauded the government for its move to promote local employment, they said that the state should not make this mandatory.

“Promoting local employment in any state is very important. This is something that every state must do and Karnataka doing it is a very good move. This will make sure that the state grows and people are also happy,” said Thallam R Dwarakanath, past president Federation of Karnataka Chamber of Commerce and Industry

However, others have pointed out that introducing reservations could create a bottleneck in growth due to a dearth of skilled labour. Moreover, every state government provides incentives to industries, and this rule could make Karnataka a less attractive state for industries to invest in.

The Information Technology sector and Biotechnology sector have been exempted from the amendments as they do not fall under the Industrial Employment Rules.

Mohandas Pai, a prominent industrialist and chairman of venture capitalist firm Aarin Capital, said that the rule should not be mandatory instead companies who employ locals should be further incentivized. “Basically if the company wants all the benefits they should employ locals. Promoting local employment for any government is a good move” said Pai.

Pai added that every state gives free or subsidized power and land at affordable rates to industries. In order to promote companies to hire locally, the state should not punish those that do not follow the rule but instead incentivize them further.

“They must much more incentivize people (companies) to look at it positively. If they have something over and above the current policy more companies will still keep coming to the state and to get more incentives they will employ more locals,” he added.

It isn’t usual for industries to hire workers from outside a state unless the lack of skilled labour forces them to do so. Bringing in a reservation could hinder the growth of industries in the state, and while finding ways to promote local employment the government should also work towards skill development of people.

“The skill set of the locals need to be developed that match to the industry standards of various sectors. To have complete benefit of the amendment the government should also look at bridging the gap in the skill set and also prepare for the industries that are coming in. The government should push local colleges and local institutions to focus on developing these skill sets,” said N Muthukumar, Chairman of the Confederation of Indian Industry, Mysore region.

Note: News shared for public awareness with reference from the information provided at online news portals.

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