Karnataka’s Misguided MNC Mandate: Putting politics over progress

The Karnataka government ought to recall that Bengaluru's ascent as the IT capital of India stemmed from its ability to attract IT services jobs outsourced by global companies to India.

Karnataka is instituting regulations aimed at compelling multinational corporations (MNCs) to disclose the number of Kannadigas they employ. Minister for Kannada and Culture Shivaraj Tangadagi, in a recent statement to the press, disclosed ongoing deliberations regarding this matter. Non-compliance with this directive could lead to severe consequences, including the rescinding of operating permissions extended to these entities.

Anti-Business Measure

This sparks legal and economic concerns. While touted as a means to champion local interests, these regulations risk harassment and favouritism, undermining businesses and constitutional rights. These regulations exhibit legal frailty and present opportunities for misuse, potentially subjecting companies operating in Bengaluru and across the state to unwarranted harassment.

While refraining from outright labelling them unconstitutional, it is evident that such regulations are inherently burdensome and politically motivated, fostering a culture of favouritism towards local interests. Furthermore, imposing such expectations on MNCs reflects a bias against them, demonstrating a regressive and fundamentally anti-business approach. It is becoming commonplace in many Indian states, for the political parties to generate mindless nuisance-by-design and needless furore over sons-of-the-soil.

Businesses exist to generate profit. If local talent lacks the necessary skills to meet their demands, they will seek talent from other sources. The Karnataka government ought to recall that Bengaluru's ascent as the IT capital of India stemmed from its ability to attract IT services jobs outsourced by global companies to India.

In today's era of globalisation, states must enhance their competitiveness and refrain from coercing businesses into prioritising local hires for mere statistical representation. This serves as an urgent call to all states to prioritise equipping their residents with high-quality education, skills relevant to current and future job markets, and opportunities for grassroots entrepreneurship. Relying on outdated colonial-era tactics is untenable in the modern economic landscape.

Heed The Constitution

Furthermore, within the legal framework, the question arises: how will the state delineate individuals originating from that particular region? Will it be based on birth, linguistic proficiency, parentage, lineage, or marriage? The reality is that while the Constitution of India guarantees every citizen the freedom to move within the country, there is no explicit constitutional fundamental right to employment.

Certain rights pertaining to the freedom of employment are enshrined as fundamental rights. For instance, Article 19(1)(g) ensures that all citizens have the right to pursue any profession or engage in any occupation, trade, or business, subject to reasonable restrictions imposed in the interest of the public. This allows for the Indian citizens to seek employment anywhere in India.

The right to life and personal liberty, as guaranteed by Article 21, has been interpreted by the Supreme Court ("SC") to encompass the right to livelihood. Thus, any denial of the right to work, which is essential for livelihood, amounts to depriving individuals of their right to life. It is crucial to note that these rights are primarily negative rights, safeguarding individuals from arbitrary state interference in their professions.

The proposed reactionary measure by Karnataka reeks of political posturing and represents a misguided public policy approach towards fostering economic competitiveness in the state. Rather than indulging in such trivial and ineffective measures, policymakers would be better served by focusing on initiatives aimed at equipping citizens with contemporary skills conducive to sustainable livelihoods.

In an era demanding global competitiveness, states should prioritise skill development over outdated mandates. As Karnataka reflects, fostering innovation and opportunity outweighs political posturing. It’s time for policies that empower citizens, not hinder progress.

Srinath Sridharan is Author, Policy Researcher & Corporate Advisor, Twitter: @ssmumbai. Views are personal, and do not represent the stand of this publication.