Private job quota: political gimmick?

As the consecutive ministries at the centre and state failed to achieve the status of welfare state even after fifty years of centralised planning and after job reservations in the mammoth public sectors of the country, the Congress party has mooted the idea of forcing job quotas on the flourishing private sector of the country. As India, Inc. openly voiced their reluctance to such a policy, the Prime Minister, himself the architect of the broad economic liberalisation in 1991, has mooted the idea of private sector coming out voluntarily to make reservations for the weaker sections of the society. The election slogan of India Shining may belong to BJP but five years down the lane the Congress also would like to market themselves boasting such a punchline. So is it that the political class is seeing the presence of a very large economic underclass as a threat to rapid economic development, hopes and aspirations, and social harmony in India. Furthermore, an economic underclass of such magnitude is peculiar to India. It is very young. India''s demography is distinctly different from that of, say, China. Comparisons with China become inevitable. In such a scenario let''s examine the sensitive issues attached to job reservations in private sector and its implications for society, economy and industry. What are job quotas in public sector? Job reservation in private sector is basically an item in the Congress election manifesto. After the elections the coalition with the Left parties saw the suggestion getting a place in the Common Minimum Programme (CMP). The CMP says the government will consider ''affirmative actions including reservations'' in the private industry sector. It (the government) will immediately initiate a national dialogue with all political parties, industry and other organisations to see how best the private sector can fulfill the aspirations of scheduled caste and schedule tribe youth, says the CMP. Job reservations for backward castes already exist in the government sector. But this is the first time there has been talk of extending quotas to the private sector; an obvious has made the idea controversial. Why does the UPA want quotas in private sector? The huge defeat of the BJP in the Parliamentary elections reiterated the fact that surviving in Indian politics is all about populism and not an urban biased growth model. Jobs in PSUs are not growing and politicians feel the number of job opportunities available for the so-called backward castes are dwindling. The logic behind job quotas in the private sector is that scheduled castes and scheduled tribes will have greater opportunity or economic and social mobility. In the words of the Prime Minister, It can be done voluntarily by the corporate sector. I am not suggesting jobs should be given without merit. People can be trained. Nobody can stop an idea whose time has come, he said. The country should ensure that weaker sections like scheduled castes, scheduled tribes, minorities and women get a fair and square deal. The Left parties are of the view that liberalisation, privatisation and globalisation have taken its toll on employment. The private sector must be answerable to the country about how it would practice non-discrimination and ensure equal opportunity to all. What are the economic and sociological indicators that highlight the need of job quotas? The ratio of the employed to those that are dependent on the employed is about 50 per cent more in China than in India as fewer people are employed or self-employed in India. The young constitute a very large part of the dependent class. More than 50 per cent of India''s population is aged below 25. Their literacy level is just over 74 per cent. More than 65 per cent of the young are `stuck'' in the villages. The Central and State Governments in India are too poor and helpless to offer any hope or help to the dependents. Due to the rapid narrowing of the state sector on account of privatisation and the withdrawal of the State from many spheres under the liberalisation regime, the little space that the discriminated groups had gained in public employment is now being compressed further. India has a case for an Equal Employment Opportunity Act (as in the United States) so as to provide legal safeguards against discrimination. What are the major issues countering the idea of private sector job reservations? The proposed reservation in the private sector may turn counter-productive in the long run. Reservation in government jobs was not justifiable even at the time when it was introduced and the country did pay dearly as it did not recognise efficiency. Excellence and merit are not identified with government jobs even till date. Reservation might have provided some relief to the people from poor and down trodden sections, who had scarce opportunities, but the same could have been provided through subsidised better education and other support services. With higher education provided at such a subsidised rates there is hardly any ground for continuing with the job reservation policy. The private sector is a business venture, set up to earn profit or â€˜investible surplusâ€™ and the objectives of business can not be achieved if it is allowed to be run by less competent people. The business has to be competitive. With the global integration of the markets, the industry and business has become highly competitive, requiring the services of skilled efficient and specialised personnel. With compulsory job reservations in place this may not be possible. Reservation may be counter-productive for the growing sectors such as information technology (IT), IT enabled services (ITES) and business processes outsourcing (BPO), which are employing large number of youth. If the government insists that reservation should be applicable, it may cause brain drain as the employment opportunity will shift to other countries and create confusion and frustration among the educated youth of the country. Even if reservation in the private sector is adopted by the government in its best judgement, it may not be possible to enforce it in the unorganised and rural sector. What is the BJP stand towards the issue? Though not the one to trail the populism bandwagon; the BJP has proposed setting up of a national commission within to provide for job reservation for economically weaker sections among upper castes. The upper caste Hindus constitute bulk of the BJP vote bank. The resolution said the BJP was of the view that certain sections of society, which are not covered under existing reserved categories, were economically so poor that they needed a special treatment. The sections should be called economically backward classes (EBCs), it said adding, however, the party favoured this provision in addition to the reservation for existing castes. What is the view of India, Inc.? Corporates are terrified of the idea. Industry says while it supports the idea of a solution that will help the so-called backward castes move upward socially and economically, implementing job quotas in the private sector is not the answer. If Indian industry has to be globally competitive, companies say they should have the freedom to hire based on merit, rather than any other reason. Says CII president Anand Mahindra: â€œThis matter has to be dealt with extremely carefully. The concept of reservation without reference to merit could have a distorting effect on the operations of the private sector. We are, however, glad that the government is initiating a dialogue to solicit all points of view, including that of the industry, before making any specific policy changes.â€� â€œThere will be uniform resistance to this desire. At a time when the domestic market has been opened up and the manufacturing sector as a whole is looking at ways to downsize operations to become globally competitive, how can the think of putting such a heavy burden on us,â€� says the CEO of a leading domestic company. The big worry for the private sector, however, is that most political parties, regardless of their personal views, could voice their support for job reservations, as it could otherwise affect their political support, particularly among the sections concerned. â€œIf the underprivileged section of society has to be economically advanced, it has to be brought to the same education level as the other sections of the society,â€� Nasscom president Kiran Karnik said. How soon is this likely to be implemented? There is nothing concrete, the first step being suggested is a dialogue between politicians, industry and trade unions. If a consensus is arrived at, the government can draft legislation and then get it passed in Parliament. The process will take a considerable amount of time. This may take the next couple of years. The present statement by the Prime Minister is clearly an election rhetoric as the Congress seeks the mandate to comeback to power in Maharashtra.

Private job quota: political gimmick?

It's time to examine the social, economical and industrial implications of quotas for the weaker sections.

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