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BW Businessworld

Dump Reservation

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Corporates are protesting and have offered to hire more dalits voluntarily and consciously. But they are hapless against a desperate political move of an inactive government to pander to the huge dalit vote bank in a bid to counter the stunning ascent of dalit political parties, such as Mayawati’s Bahujan Samaj Party in UP and the Republican Party in Maharashtra. Industry fears that since the government has few achievements to showcase for its five years of rule, it may use legislation as a trump card before the next Lok Sabha elections.

There are several reasons why the government must desist from doing so. First, if it comes at such a nascent stage of India’s spectacular economic revival, this could only be counterproductive. The move from merit-based employment to reservation-based employment has had its own drag effect in the government and in PSUs. Despite 50 years of reservation, SCs/STs haven’t even made it to the senior management of most PSUs, with the number of SC/ST directors on their boards not even averaging one per company. This is because the school dropout rate of SC/ST students is very high

The enormous vacuum of inclusive growth in India is a failure of governance. Fobbing off reservation to the private sector is no solution — it is equivalent to treating the symptom rather than the disease. The real cause of the failure of inclusive growth lies in our inability to educate SC/STs and OBCs so they can be self-dependent. According to a FICCI study, a shocking 81 per cent of all reserved seats in technical institutes, such as ITIs, remain vacant while 88 per cent of all reserved seats in IITs remain vacant. Largely because school dropouts are as high as 63 per cent among SC/STs. In Delhi University, as against a reservation of 22.5 per cent, they fill only 11.37 per cent seats in graduate courses, 9.40 per cent in post-graduate and a low 3.77 per cent in research.

India needs to address this fundamental problem and spare the private sector of the political motivations. It’s in the interest of the underprivileged to provide them with the right education and prepare them for the highly competitive corporate world, so that they can compete for the best jobs available. Let’s build strong foundations, rather than repair the buildings. Giving them reserved jobs that they aren’t prepared for is a myopic, politically challenged idea.

It is a huge disservice to the unsuspecting because it will throw them into the vortex of a cutthroat environment and could create more social problems than has been bargained for. In the long run, those unable to cope with the pressures will tend to congregate into unions to protect their interests. So far, labour rights have been fought with caste agnostic unions; soon, there will be caste-based unions. Over a generation or two, this will become a Frankenstein’s monster. Unions that can’t trust the management can bring down the best of industries. Take the case of United Auto Workers in the US, which has collaborated in the decimation of Detroit as the Mecca of the global auto industry. Closer home, let’s remember the mighty National Textile Mills for a while.

One option put forth to the opponents of reservation is that it should be for a fixed period of 10, 20 or 30 years. An impractical idea. Mind you, the founding fathers of the Constitution had introduced reservation for a limited period of 10 years only. Regimes thereafter haven’t been able to muster the courage to abolish it. Instead, decade after decade, they’ve used renewal of the 10-year period as a political tool of achievement.

The government should step aside from forcing reservations in the private sector. Rather, it should use media campaigns to make affirmative action trendy and much of an “in thing” as corporate social responsibility or global warming. Peer pressure will do the rest. Intense corporate citizens take their responsibility towards society far more seriously than the government. Better still, the government could provide a one or two-year tax break to companies that take affirmative action. Carrot, clearly, would work better than stick here.

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(Businessworld 29 April-5 May)