Karnataka’s domicile-based reservation is a bad idea that will fail in court

Regardless of the political party in power, expanding the scope of reservation has become a preferred option to bridge the gap between youth aspirations and the reality of the job market

Karnataka’s Congress government is set to join the bandwagon of administrations which are using reservation as a tool to deal with an unsatisfactory job market for the young. The state cabinet has cleared a bill which aims to reserve 50 percent of jobs in a managerial role and 70 percent in non-managerial roles for people domiciled in the state for 15 years. In addition, there’s a condition that they have to display the prescribed proficiency in Kannada.

Reports indicate that the bill will be tabled in the state assembly next week.

The proposal has been criticised by prominent industry leaders because it will undermine the economic vibrancy of one of India’s most important growth engines.

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Karnataka is not the first state to try to reserve jobs in the private sector based on domicile. The most prominent recent example is Haryana. It ended badly for the BJP-anchored coalition government there as the Punjab & Haryana High Court in November 2023 struck down the legislation which provided for 75 percent reservation for locals in jobs that paid a monthly salary below Rs 30,000.

Legal precedent against domicile-based reservation

The High Court termed the policy as manifestly discriminatory. It ruled that this reservation policy violated a series of fundamental rights in the Constitution that provide safeguards against discrimination. Moreover, the law also violated Article 35 of the Constitution, which carves out exclusive powers for Parliament.

The weight of recent legal precedence is against domicile-based reservation. Even if the final contours of Karnataka’s legislation are yet to take shape, the underlying idea is unlikely to survive judicial scrutiny.

Wrong way to tackle jobs challenge

Regardless of the political party in power, expanding the scope of reservation has become a preferred option to bridge the gap between youth aspirations and the reality of the job market.

To illustrate, the union government’s annual employment report (PLFS) showed that from 2018-19, the last pre-Covid year, to 2022-23, the proportion of the workforce in agriculture increased from 42.5 percent to 45.8 percent.

Simultaneously, the percentage of the workforce in manufacturing declined from 12.1 percent to 11.4 percent.

An increase in proportion of workforce in agriculture is a sign that there are simply not enough jobs for rural youth elsewhere.

This is not the same thing as absence of jobs. It could be a case of mismatch between skills on offer and what potential employers need. This gap is not going to be bridged by domicile-based reservation.

Absence of right workforce can lead to economic decline

As some industry leaders have argued, the absence of adequately skilled workforce can drive away industry. There are no shortage of options, either within India or elsewhere.

Skilling is not a challenge that offers immediate solutions. But neither is reservation the answer. Hopefully, better sense will prevail when the bill is debated because Karnataka can ill-afford to spook industry at this juncture.