Parochial economics

Karnataka's proposed job reservation law is regressive

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The Karnataka Cabinet recently added a twist to a controversy roiling India's business community by mandating a reservation for locals in private-sector jobs. The Bill, which has now been put on hold, mandates 50 per cent reservation for locals in management and 75 per cent in non-management positions. Unsurprisingly, this proposal evoked a sharp response from businesses in Bengaluru, the centre for information technology, startups, global capability centres (GCC) and pharma industries - all racehorses for the Indian economy. The National Association of Software and Services Companies issued a statement expressing "disappointment” and sought a meeting with state authorities. This bid for nativist employment laws is not novel - Maharashtra set the ball rolling in 2008 (with an 80 per cent mandate), then Andhra Pradesh passed a law (75 per cent) in 2019, and Haryana (75 per cent) in 2020. All these laws have been challenged in courts by industry associations. The first to be struck down was the Haryana law in Novem