India debates private sector
quotas By Priyanka Bhardwaj
NEW DELHI - One aspect of a successful
democracy is that politics often impinges on
business, for good or bad. In the quest to impress
the largest sections of the electorate, a public
debate rages in India over whether the caste-based
reservations in jobs that exist in government
should extend to the private sector as well.
The United Progressive Alliance (UPA)
government led by the Congress party raised the
issue for the first time in 2004 and
wrote to more than 200
corporate houses and associations about the need
for reservation or job quotas in the private
sector. Only a few replied to the missive,
promising to implement such measures in exchange
for subsidies, tax breaks and other incentives.
Recently, the issue was raked up again by
the left parties, on the heels of a constitutional
amendment to allow reservations in private
educational institutions. This month Minister of
Social Justice Meira Kumar reportedly said the
government would be forced to enact laws to ensure
reservation in the private sector, if the latter
failed to institute job quotas voluntarily. Ram
Vilas Paswan, another federal minister who
represents the dalits (considered the lower
caste), recently said the constitution should be
amended to allow for private-sector reservations.
Prime Minister Manmohan Singh has also spoken
about such quotas.
Most in the Indian
private sector are against reserving jobs. They
argue that discriminatory hiring practices lower
profits, as the focus in the age of global
competition should be on qualifications, merit and
efficiency, and not caste. An interventionist
economy will only lower productivity and interfere
with natural market forces. They suggest
affirmative action wherein the government and the
corporate sector create an enabling environment by
instituting scholarships and setting up sound
education infrastructure, the basis of entering
the job market.
However, the proponents of
quota are equally vehement and want the private
sector to reserve jobs. The Indian constitution
provides for reservations in government posts to
sections of society known as the scheduled castes
(SC), that is the dalits and scheduled tribes
(ST).
More than a decade ago, the Mandal
Commission report that recommended 27% reservation
for the backward castes (BCs) was implemented, to
the chagrin of upper castes. Today, there are
about 3.5 million reserved postings, with another
2 million offspring benefiting.
Quotas are
a result of the socio-economic-religious history
of India, at the heart of which is a hierarchical
caste system that has percolated for centuries.
Caste became intertwined with economic well-being
as the original divisions were a work-based
structure, with the top rung held by religious
leaders and the bottom by menial workers.
The leftists and dalit groups claim that
social exclusion that SCs, STs and other backward
classes (OBCs) face is extended to employment,
where the so-called upper castes keep the best
jobs. Social and economic segregation combine to
create severe bottlenecks in procuring loans,
acquiring capital and accessing infrastructure,
such as water from common wells. Goods
manufactured by the community may not get sold in
the open market. Similarly, traders may not sell
them raw material.
According to government
estimates, in the year 2000, of all the SC/ST
households that cultivated land, only 16% did so
independently. Only 12% owned businesses. Compared
with 56% of rural non-SC and ST households that
had access to capital assets, only 28% of rural SC
and ST households did. The unemployment rate was
double that of non-SCs and STs. In rural areas 61%
of the community did manual labor jobs. In urban
areas the figure is higher, at 64%. Non-SC/ST
communities recorded only one-third of their
population engaged in manual labor. Also, 38% were
below the poverty line, as against 20% for other
communities. Only 37% of them are educated,
compared with 58% of the rest of the population.
Last year, at the national summit on
reservation in private sector, Sitaram Yechury, a
prominent left party leader, along with nearly
1,000 dalit delegates raised a common voice for
reservations in the private sector. Paswan
recently said that 95% of Naxalites in the country
were SCs.
The left parties say India's
organized private sector should take on social
responsibility, given the 30 million people
employed, even as the size of the government
shrinks because of public-sector divestment to
private owners that is estimated to have left
200,000 dalit employees jobless.
Examples
from the West are also cited. Fortune 500
companies such as General Motors, ExxonMobil,
Wal-Mart and Ford hire 16-23% of their staff from
minority communities, with a similar ratio for
contracts doled out. In contrast, BCs, who
constitute 23% of the Indian population, have a
presence of just 3.4% in domestic industry and
only 7.1% in factories. An article in The Hindu
calls reservations in the private sector a
"placebo" that does not do much good, but provides
an emotional and mental push forward.
Indian business houses, however, are
vehement in their criticism. They feel the
government has failed to provide the right
opportunities to dalits. While the government does
have a responsibility to the citizens of a
country, private corporations are responsible to
those they employ, and do not have a
responsibility to employ.
The Federation
of Indian Chambers of Commerce and Industry
(FICCI) has outlined four definite measures:
concentration on the educational and skill
development aspects of the BC group; lessons in
entrepreneurship; awards of government licenses to
BCs; and voluntary hiring of BCs in the private
sector. The Confederation of Indian Industries
(CII), on the other hand, is in favor of economic
reservation that is not caste-based, but again
voluntary, with emphasis on education. The
Associated Chambers of Commerce and Industry of
India (ASSOCHAM) underlines the norms of US
affirmative action, fair employment measures in
Northern Ireland, the positive-action policy in
the United Kingdom, and a new policy in Malaysia
in which the minority job-seeker will get
preference when other aspects such as
qualification and efficiency are the same.
The World Bank's World Development Report
2006 presents data to show that material
deprivation translates into low cultural/skill
attainment that is transmitted across generations.
While this is amenable to remedial action, the
best time for intervention is from early infancy
until about six years of age, which again means
proper education.
Indeed, with persuasive
arguments on both sides, the last of the debate on
reservations in the private sector has not been
heard.
Priyanka Bhardwaj is a
New Delhi-based writer.
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2006 Asia Times Online Ltd. All rights reserved.
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