When politics overrides prudence
The Karnataka government’s sudden decision to reserve jobs for Kannadigas in the private sector — now on hold in the aftermath of the swift backlash from industry leaders and shaken by lightning invitations from neighbouring states beckoning industries to shift from Bengaluru to their states — is an outrageous, bird-brained, irrational, and regressive idea from a progressive state headed, ironically, by a rational chief minister. It’s surprising because Siddaramaiah was known for his financial acumen, and fiscal and monetary prudence during his earlier stints as Karnataka’s finance minister.
If the government follows through with this imprudent decision, it will spook investors who will migrate to other parts of India — as was witnessed in West Bengal where industry took flight during the Left rule — and turn Karnataka into a ‘beemaru’ Hindi heartland state. It’s also likely to be set aside by the courts as happened in Haryana during the overzealous tenure of Manohar Lal Khattar, when 75% of the jobs were reserved for the locals.
It is shocking, and disappointing, as it was announced in a similar hasty, thoughtless, and crude manner reminding one of the recent Bharatiya Janata Party (BJP) government in Karnataka, which acquired notoriety for bulldozing ordinances and issuing bizarre rules without wide consultations and debates with stakeholders and think-tanks. To cite a few examples: raking up non-issues such as the hijab controversy by changing school uniforms policies, stoking communal tensions by denigrating Tipu Sultan, changing school textbooks without involving reputed academics, and banning Muslim vendors around Hindu temples or ratha festivals which polarised communities along religious lines tearing society’s social fabric.
The Congress government is invoking misplaced regional chauvinism based on Kannada pride, and is sowing seeds of schisms between Kannadigas and outsiders across Karnataka, particularly in Bengaluru which is a tolerant, vibrant, and cosmopolitan melting pot. This is reminiscent of the diabolical policies of the Shiv Sena two decades ago when migrant workers from Uttar Pradesh and Bihar (who were the backbone of that great city) were terrorised. Such policies are detrimental to social harmony and sound business policy. Bengaluru generates about 70% of Karnataka’s revenue, and creates millions of jobs — clearly, the proposed Bill will wreck its economy.
Bengaluru attracts entrepreneurs from across India and abroad not only in the IT sector that has generated lakhs of jobs, but it has attracted mega investments from Volvo and Toyota, and auto ancillary industries. It has also welcomed with open arms aggregators of Internet technology like Ola, companies in the aerospace sector and other hi-tech industries. This has had a positive effect on real estate prices, on local businesses, on companies in the healthcare and pharma sector like Biocon, boosted tourism across the state, and changed the economies of Coorg, Chikmagalur, Hassan, Hampi, and other hinterlands.
In reality, millions of small entrepreneurs in myriad enterprises — whom we seldom hear or read about — are fuelling economic growth. This is not to undermine the importance and contributions of the giants of India Inc, but to highlight the fact that the majority of employment is generated by less glamorous, tiny, corner shops, small enterprises like dhabas, vegetable vendors, restaurants, bakeries, millions of street/pavement/pushcart sellers, and the thousands of retail shops and services of every conceivable variety that are crowding the lanes of village squares, towns, district headquarters, and megacities.
You only have to walk through Sarojini Nagar, Khan Market, or Chandni Chowk in Delhi, or Avenue Road, Chickpet, Russell Market, Shivaji Nagar, or D V Gundappa Road in Bengaluru, or the Gandhi Bazaar in Hassan to sense the hum of activity, and see an enormous population engaged in daily struggles to make a living and, in turn, not
only become self-employed but offer jobs to millions.
The hard numbers tell the story. The employees of corporates in the organised sector and all government employees (state and Centre) add up to roughly 50 million, which is just around 6% of the total population. The public sector enterprises, including the Railways and the armed forces, account for another 5 million jobs. This means, out of an employable 850 million from a 1.4 billion population, just about 55 million are in the organised sector. About a little more than 350 million — small farmers and rural labour — are directly employed in agriculture and related activities.
And the balance nearly 350 to 400 million (which includes urban labour) are involved in various occupations and services. The unknown, small entrepreneurs are the true backbone of economic activity who, from humble beginnings, start with zero capital or often borrowed capital. They face and overcome obstacles at every step with stoic courage, survive the stifling bureaucracy, offer speed money, and grease the palms of hundreds of inspectors. What keeps them going is the unquenchable desire to rise above their miserable conditions and break out of the inhibiting circumstances that circumscribe them
Colossal corporates even in advanced economies do not create a majority of the jobs. They come from tiny, small, and medium enterprises.
Siddaramaiah and his colleagues will do well to focus on quality education, affordable healthcare, and concentrate on skill development. Along with it, focus on good governance, the reduction of corruption, and ease of doing business for small businesses. Corruption has been the bane and root cause of all the ills of Karnataka under successive governments. It is an open secret that for a small Udupi hotel corporation licence, the government fees are Rs 3,000 but what’s given under the table is anything from Rs 30,000 to Rs 1,00,000. Both the Bommai government and the Siddaramaiah government have seen
the ‘40% commission’ charges being levelled against them.
The free movement of labour and goods is the very bedrock of a developing and developed economy, from Beijing to Bengaluru, and London to Ludhiana. A few lakh migrants occupy high-paying tech jobs, but millions in droves in Bengaluru can be found in the shadow economy. They are cooks, maids, drivers, carpenters, plumbers, security guards, beauticians, and therapists, to name a few. Migrant labour is also increasingly visible in traditional Udupi hotels, and in many coffee plantations. They are hard-working and Bengaluru’s economy will collapse if we drive them out.
Competition from migrants will be good for Kannadigas to be more aspirational, shake them out of their comfort zone, and move up the job market.
It will be saner to reserve 30-40% for Class C and D jobs instead of the proposed 100% after wider consultations and shun reservations in top and mid-management levels. Any attempts to push through the current proposal driven by misguided jingoism will herald the death knell for Bengaluru’s and Karnataka’s economies.
(The writer is a soldier, farmer, and entrepreneur)