Bengaluru, July 17 (FN Representative) The National Association of Software and Service Companies (NASSCOM) on Wednesday launched a blistering attack on the state government’s latest misstep, the Karnataka State Employment of Local Industries Factories Establishment Act, 2024. The draconian legislation, which enforces stringent local hiring quotas, is poised to force companies to consider relocating elsewhere due to an acute shortage of skilled talent. NASSCOM, furious over the bill’s potential to decimate the state’s thriving tech sector, demanded an immediate and urgent meeting with state authorities.
The association also called on the government to rescind this ill-conceived legislation before it does irreparable damage to Karnataka’s reputation as a global tech hub and economic powerhouse. The technology sector, a linchpin of Karnataka’s economy, contributes a staggering 25% to the state’s GDP. It fuels innovation and employment, hosting over 11,000 startups, a quarter of India’s digital talent, and 30% of the nation’s Global Capability Centers (GCCs), NASSCOM said. Yet, this new bill threatens to eviscerate this vital ecosystem, making it nearly impossible for companies to operate effectively amid a shrinking pool of qualified professionals, it said. NASSCOM’s statement underscores the absurdity of the bill’s restrictions, which could drive businesses to abandon Karnataka in favour of regions with a more accessible talent pool.
In today’s fiercely competitive global tech arena, the state’s ability to attract and retain top talent is critical. The bill’s onerous requirements could force companies to uproot their operations, thereby undermining Karnataka’s status as a premier technology center. Bengaluru, once lauded as India’s Silicon Valley, has played a crucial role in the state’s economic ascent, leading to higher per capita income and significant growth. NASSCOM warns that this misguided legislation could devastate job creation, stifle startup innovation, and sully the state’s hard-earned global reputation.