Reservation in Private Sector: An Overview of the Proposition

Dr. Anand Teltumbde

"Investment will be more uncertain in an increasingly competitive world, if jobs are given on the basis of my birth and not on the basis of my capability."

-          Arun Shourie, Ex-divestment minister

"I'm not against reservation, but it should be based on economics and not caste. If a person is hampered by resources, I think those people should be given reservation."
-N.R. Narayana Murthy, chairman and chief mentor, Infosys.

"It's ludicrous. The entire industry will go down the drain. The dream of a multi-billion dollar business process outsourcing industry, forget about it."

- Vikram Talwar, CEO, EXL Services:

"If our hands are tied behind our backs, we cannot race ahead. Many of us employ people from these classes and everyone is treated on merit. Why then create an artificial division within employees?"

- Arun Bharat Ram,Chairman, SRF 

"Reservation will not increase job penetration for the lower sections. Industry is already disadvantaged with high cost, bureaucracy and delays. You can't add one more and expect us to produce growth,"

- Rajeev Chandrashekhar, Chief, BPL Innovision.

"We're ready to initiate a public-private partnership where we can make such people more employable through training programmes. But we're not ready to compromise on merit. This will have a negative connotation in the external world and fdi may be affected."

-          N. Srinivasan, Director-General-Designate, CII.

"We're looking at a mass scale massacre kind of a situation. The MNCs will never understand this and software contracts to India may start slowing. I need skilled people to develop mission-critical software. There can be no compromise on that just for social reasons."

-          Vishnu Dusad, MD, Nucleus Software

This is the way the leaders of the so called India Inc. reacted to the idea of bringing in reservations for the backward castes in the private sector. Outlook, an English magazine has published them in its latest issue. “Not a single businessman Outlook spoke to was pro-reservation on caste basis. Most were anti- any sort of reservation, while some felt if it has to be there, it should be on economic and not caste basis. The unanimous view: in a competitive scenario only merit and performance should matter.”


The tone and tenor of these reactions against reservations from the corporate leaders itself should be the reason enough for bringing in reservations in the private sector. The bias and prejudice against the so called low caste people that these reactions stink of well illustrate that if not specifically mandated, the private sector will not touch a Dalit with a bargepole. The underscoring premise of these arguments is so poisonous that it dismisses even the possibility of merit and capability in these people. All of them sing in unison their casteist song that the influx of the BCs in their fiefdom will erode their ‘merit’. None of them reflected a possibility that there could be people from these castes with requisite merit and capability. None of their statements remotely appreciated the naked reality that despite possessing these attributes, people from these oppressed communities would not get entry to their fiefdom, would not get their dues from the Indian society.

Somehow, reservations are construed as concessions extended with the intent of uplifting these low caste people. There is never an iota of reference to the intrinsic disability of the Indian society to treat all people equally and justly, which necessitates externally imposed mandate of reservations. The former, that is, extending a helping hand to uplift these downtrodden people, may be a point but certainly not a major one. Had it been otherwise, there is no justification for restricting the scope of reservations only to the SCs and STs; for there are scores of other communities including the Brahmans having people who certainly needed such a helping hand from the State. The real reason for reservations is the latter. The former connotes just the economic dimension and implies the SC and ST communities statistically come on par with the rest of the population, the reservation should come to an end.

Merit: a spurious ploy

Merit is the patent and permanent argument against reservation which is thrown around as though it were self evident. That is the reason we find every argument against reservations as sampled above contains elements of merit. Surprisingly, none has adequately nailed this lie about merit. If at all, the apologetic arguments from pro-Dalits circles that tended to reason out their lack of competitive merit in terms of their poor material conditions has only served to reinforce adversary argument and embolden its perpetrators. The simple fact is that the entire argument of merit is a bogus ploy. What is merit? They will never tell you what they mean by merit. I tried to search a definition of this oft repeated word but could not find any specific definition. So much organizational politics is played on this word that it is devoid of any meaning whatsoever. Earlier times, people seemed to mean by merit as the scholastic performance, academic rank, marks etc. It was seemingly used against dalits at the beginning because they apparently lacked in these aspects. Here, precisely those apologetic arguments were being used that a dalit boy getting qualifying marks with all kinds of material deprivation was more meritorious than his upper caste counterpart who  had all kinds of material amenities and cultural endowment. But soon thereafter when Dalit students started coming out with equally good marks and even topping the merit lists, the definition of merit started becoming vaguer and vaguer. They started adding performance which blissfully was not measurable. When performance became measurable, thanks to technological advances in management and information technology, they could attempt to make performance measurement objective. However, they chose to do the opposite. They invented and introduced many esoteric psychometric parameters which lately culminated into ‘personal potential’. The measure of merit has become so amorphous that it is not your scholastic performance, it is not how you performed, it is not your concrete contributions but some weird parameters and ‘their’ assessment of your potential that determine what you are and what you become. Merit thus just means which it always did- ‘their’ opinion about you. If this is the definition of merit, is it not a circular logic to expect a Dalit to have it?

And what is the merit of those who are hampering on merit? If merit is defined in terms of actual results, actual performance, which it should be, then the merit of the upper caste elites comes out glaringly through the pathetic state of the country in the comity of nations. Shouldn’t their merit be measured by the history of slavery they gave this country. Certainly there were no dalits around then to meddle in their affair; they were condemned not to have even their shadows pollute theirs. What would they say about these hard facts of incontrovertible history? Was it their merit that anybody could just walk in with a handful of people and lord over this vast country not for a year or two, not for a century or so but for over a long millennium? Even after independence, for almost two decades, despite the Constitutional reservations having come into effect, there was hardly any dalit around to demoralize them with inefficiency. They ran this country virtually without any hindrance. Does it not reflect their merit, or a lack of it, that India despite its unique endowments languished around the bottom whereas many similarly placed countries passed it by in every aspect of development?

What is the merit, if one may ask; of Ramkrishna Bajaj who is so vociferous in opposing the idea of reservations in private sector that he has virtually came to represent the private business and industry? If he had not inherited the wealth and empire his father and grandfather left, what would he be? The entire merit and capability game reduces down to the inheritance. Even the Narayan Murthys of this world and the entire tribe of so called self-made people also need not think they are exceptions. They may not have inherited wealth as Bajaj did but they have certainly inherited their caste and all that goes with it in India. Their socio-cultural inheritance naturally endows them with all the abilities and lends access to network which is considered invaluable in business all over the world, and more so in India. Whatever romantic stories are painted about these self made people, need to be qualified that they are only applicable to their ilk; they may be self made people in relation to the savarna people; not in relation to a avarna dalit.  A Dalit, inherits his caste at his birth and not alone poverty but also all the imaginable humiliations that is associated with it. Howsoever, he wants to forget and ignore it, the society repeatedly reminds him that he can’t. If Ramkrishna Bajaj claims inheritance as his merit, he must realize that he essentially using the same logic that created and sustained the caste system. It is not the meritocratic argument any more. If he persists with that, it itself becomes a justification for extending reservations to private sector.                   

The reservations began in right earnest only in late 1960s and with it Dalits started barely entering their exclusive domains. It was still the preponderant in clerical jobs, at the most. Only in class IV that comprised the lowest jobs and included sweepers the representation of dalits far exceeded the prescribed percentage. Even in clerical cadre, their presence was negligible. Needless to say their presence in Class I posts was negligible. Not many people understand that the so called class I of service is a collection of all the posts within an officer or management cadre. Entering the class I and being counted against it does not necessarily have relationship with power. Power lies at the other end of the spectrum, some 7to 12 steps away from the entry point, which a junior class one person had to climb by way of promotions. Secondly, mere entry in the cadre does not automatically obviate caste oppression; dalits have to work to earn favour from their upper caste bosses. It is only through this process; they can reach positions of real power and in return be acknowledged as meritorious. The fact however remains  that they are turned comprador to their community; while schizophrenically chanting about dalit interests, they unconsciously or consciously serve theinterests of the existing power structure. As the times passed, many Dalits reached various positions of power ladder. The point is that even in this process; Dalits cannot be accused of lowering the merit or eroding the efficiency standards of the upper caste elites. What then is the merit of these people that this country shamefully lay at around the bottom of the scale of the human development indices or had a dubious distinction to have more than half of world’s destitute?

There is no consistency in the argument of merit by the opponents of reservation, moreover. If their merit can be dismissed on empirical terms as above, applying similar logic to their recent euphoric version merit of Dalits can be circumstantially inferred if one concedes that India has made praiseworthy progress in recent years. Lately, the upper caste elite appear to be elated about the progress made by India which was manifested in their slogan “India shining’ during the last general elections. Notwithstanding that most of them attribute it to the private sector, and thereby build their argument in favour of the Reforms. Notwithstanding these claims, there is no statistical evidence for the public sector lagging behind. Also, the bureaucracy that created congenial policy framework and operated it to facilitate this progress also could claim its share of the shine. What has changed in the human resource composition of these sectors is perhaps only the rising percentage of the Dalits and other BCs. One could argue in light of this fact that India’s spectacular progress should thus be attributed to Dalits.  No doubt this would be taken as puerile but then they should also understand that their own argument that dalits lacked in merit is far more baseless and puerile than this one. 

Further Proof of Their ‘Merit’

There is a clear case in this context that directly and incontrovertibly exposes spuriousness of this ‘merit’ argument. Unfortunately, it never surfaced in any discussion so far and hence people scarcely knew about it. In the euphoric days following the adoption of the IMF sponsored economic reforms by the Govt., the latter allowed the PSUs to float joint venture (JV) companies in private sector with suitable private company to contribute 50 % of its equity. Besides being a masked move to privatize operations of the PSUs, it served a longer standing demand of the PSU managements that they should be unshackled from the PSU framework if the Government wanted them to perform. The argument invariably referred to the ‘reservation’ policy that burdened them with inefficient and incapable people. Not only that these people would addto the wage bill but also would lower the standards of efficiency in organization. Implicitly, it meant that if they were allowed to perform without these constraints, as a normal private sector company would do, they can demonstrate their entrepreneurial prowess and managerial competence. Soon after the government cleared the proposition most cash rich PSUs jumped onto this JV-bandwagon and formed private companies not only with Indian companies but in some cases with the MNCs. These companies were manned by the select ‘blue eyed’ boys with remuneration packages which were scandalously inflated to be comparable with the best in the market. Needless to say that there was no SC / ST, not even a clerk, to pollute the hallowed corridors of efficiency of these companies. Taking shelter under the technical definition of PSU as having minimum 51 % of Public equity in them, the PSU equity in these joint venture companies was  restricted to just 50 or 49 %. There should be no doubt that these companies were not the ordinary companies but the demonstration pieces for proving a longstanding claim against the reservation policy of the government that it mars the efficiency of PSUs. However, contrary to their mission, most of these companies have gone sick, most had to write off their capital and close down. The ones that are surviving are being strategically supplied with PSU oxygen in various forms. Does it not conclusively refute the ‘merit’ argument of the upper caste elites once for all? Does it not expose their entire canard against reservations as white lie?

Erroneous discourse

The discourse on reservation in private sector has begun with a wrong implicit premise much like that of the original reservations itself. The premise behind reservations as a mechanism to render a helping hand to the people who were oppressed socially for a long time was basically wrong. It should have been projected as a countervailing force to the socio-cultural disability of the Indian society to treat people from certain communities equally. In corollary, this force should have pervaded all the sectors of society (economy). As the premise behind reservations was wrongly conceived so was the premise behind reservations in private sector. The latter is being articulated in terms of the need in the context of decimation of the public sector which is happening under globalization-policies of the government. The corollary of this conception will mean that if the government does not privatize the public sector, there may not be any need of reservations. The right premise behind reservations in private sector would necessarily follow the rearticulation of the basic premise behind Constitutional reservations as stated above- that it is a counterveiling measure by the state against the socio-cultural disability of the Indian society. This disability does not restrict only to the State for restricting the domain of reservations to the State sector. Rather it pertains more to the civil society than the State which is supposed to be enlightened enough to see the need for reservations. The premise behind reservations in the private sector thus should be restored as the belated correction to the original premise behind the reservations. It is a mechanism with which rights of certain sections of the society are ensured because left to itself, the society will never allow them to exercise these rights.

Thus there cannot be any question about reservations in private sector or any other sector so long as these sectors belong to India. Dalits have their inalienable right to partake their due share of whatever exists in whichever sector until the societal disability is done away with. It is not open for negotiation. If the upper caste elites want reservations to go, they should come forward to work for removing this societal disability rather than crib against reservations. Reservations are like a bitter pill for some chronic disease, which cannot be perennially good for anybody. Nobody likes to take bitter pills without reason. Pills however can be stopped only after the disease is gone. Reservations are not in the interests of Dalits either. They do not come without cost to them. The dalits should realize that they are already paying huge costs for reservations, so huge that in the ultimate cost benefit analysis, it may be disputable whether they are beneficial to them in net terms. Reservations, for instance have marred their rebellion zeal and co-opted them into the system; as observed above, they have converted a cream of dalits into a comprador class which parrots the anti-Brahmin slogans in abstract but serves the interests of Brahmanism. They have led them astray from their long terms emancipatory project of annihilation of castes. Dalits have developed genuine vested interests in continuing with castes so that the crutches of reservations are perennially available to them. No, reservations will do no good to dalits; they are just a tactical measure to safeguard their livelihood concerns; they are the means of protection from the communal onslaught of the upper caste elites. They are needed but not as a panacea; just as a pill to be discarded as soon as you recover.

The real question about the reservations in private sector is not whether they are required or justified much so the debate about their dampening so called merit and affecting the holy FDI into the country. These are all spurious arguments. These spurious arguments themselves are rather the proof enough for the conditions warranting reservations. It is the diseased mind of the Indian bourgeoisie that yet cannot see capitalist virtue in demolishing the feudal vestiges in society; everybody could see its logic at the beginning to strike a compromise with these forces under the umbrella of colonial rule. But, persisting with the same arguments even after 50 years, when they claim to be competing globally does not gel with their claim of maturity. It is in the interest of capital to expand market; de-segmentise labour market for effectively competitive wage rates. They should reread the history of development of capitalism in Europe. How capitalism combated feudalism and freed labour from its clutches. They should revisit the rationale of political economy behind the affirmative actions operated in the most capitalist countries of the world.  Reservations, after all do not mean sitting people merely by birth without cognizance of their capability as it is rhetorically made out to be in public. There are enough qualified people among Dalits in every branch of discipline that can shoulder any job. It is only the jaundiced view of the upper castes as given at the beginning that splits their focus and makes them conscious of their identities. Thus, these are not the issues at all; they are just the subterfuge for

The issue behind the reservations in private sector is of sanatan kind. The issue is whether there is a political will behind these moves? How will these reservations implemented? Whether these reservations will amplify costs than accruing benefits to Dalits? These issues are not at all new; they were associated with the existing type of reservations and over the years they have only been validated by the practice.

As regards the political will; it has always been calibrated with the consideration of the electoral politics. There is no doubt that reservations were a containment strategy of the landlord-bourgeoisie ruling classes. Without reservations, it is inconceivable how such a mass of ‘proletariat’ could have been managed. Reservations were a stratagem to create a stake for them in the system which has been more than successful as we see it. Today, when the demand for the reservation is voiced form the Dalit circles, these classes are rushing forward to grab it. BJP grabbed it saying that they will start discussions on it with all concerned. The Congress came out with it in the manifesto. The CMP of UPA promises it and surprisingly there is no tangible opposition to it except for the Shiv Sena. While, there is approximate consensus on the issue among all the ruling class parties, there are adverse reactions from the bourgeoisie. They came out with all kinds of alarms as given at the beginning. This duality has always been the bane of the Indian political system. The political class that represents the ruling classes takes certain populist stand but the latter could oppose it, creating an illusion that the political classes are independent of the ruling classes.

Even the existing type of reservations that are mandated in the Constitution, suffer from a lack of political will. If there had been a political will behind reservations, its implementation would not have been in such a pathetic state. Even after decades of its implementation, the representation of the SCs and STs in the class I and II which approximately may be considered as on the margins of power is still much below the prescribed level. It took decades for people to reconcile with them and realize that their compliance does not necessarily mean devolution of power. They did not mind filling up vacancies in a depreciated organization structures at the levels sans power. These people had to climb up 9 to 10 rungs of organizational ladder to reach positions of power. This process remained entirely opaque and in the hands of traditional upper caste elites. They naturally ensured such SCs and STs members who will be externally belonging to SCs and STs but will internally be aligned with the upper caste elite. The entire process is run so roughshod that there is hardly any hope of correction. This process converts the SCs into three basic categories: one, those who are mediocre but demonstratively submissive and obedient to authorities; in other words, those who display behaviour according to caste dharma, are immediately favoured by the system and elevated as demo pieces. The second category is of those who may be relatively poor, below mediocrity, and who could not sufficiently display compliant behaviour to the authorities are just ignored and tolerated in the system. This middle band comprises majority of SCs and STs in any organization. The third category is of those in miniscule minority who are really meritorious and who by virtue of being so refuse to bow before the authority and on the contrary tend to raise questions are normally harassed. There is no remedy to internal vile dynamics because the courts at the most go by technicality and never see the viewpoint of the harassed employees. The plethora of institutional mechanisms has proved utterly useless when it comes to redressal of grievances. If this is the state of the political will behind the constitutionally mandated reservations, what may happen to the proposed reservations in private sector can best be left to imagination.

Not unconnected entirely with the political will is the issue of implementation. How will the reservations in private sector be implemented. Public sector is consciously carved and is well organized with established structure, processes and systems. One can easily see the quantum of reservations based on the percentage. Even in the quota system (vide roster), one can prepare the roster. The private sector is mostly unorganized without any structure, systems and established processes. Even the organized section in it comprising big industries etc. of late adopt flexible structure which is dynamic enough to make it difficult to implement reservation. Many people work on projectised organization in which the teams are formed in matrix for a set of tasks and then dismantled. Even the remuneration packages of people holding similar designation could vary a great deal. It is not the reservation but the order in the organization that is prerequisite for reservations that the private sector might be firstly scared of. This peculiar order that keeps the employees of the private sector always on tenterhook and thereby ensures compliance behaviour, characterizes the private sector. The private sector can ill afford to discard this important aspect of control.

This characteristics of private sector is surreptitiously entering the public sector too in the name of the esoteric parameters such as performance, potential, etc. the long pending issue of public sector autonomy is being resolved by the bureaucracy in terms of granting the management of the public sector companies their own domain of rule. They would not grant autonomy in terms of operating freedom to strategize in the marketplace. Backed by the ownership right of the maximum number of shares in the companies a bureaucrat imposes his writ on the public sector management. They have in turn granted the space for the latter to rule    

It is not that there is nothing stable in such industries but in light of the public sector reservations, the private sector reservations appear potentially problematic.

By Way of Conclusion

The business class must realize that their arguments against reservation basically stem from age-old prejudices in Indian society vis-ŕ-vis the lower castes. There is absolutely no rationale in them. There is no connection of merit with reservation. Reservation never meant accepting anyone just on the criterion of birth. Reservation simply means that a person having requisite qualification for the job should not be denied it just because he or she is born in a certain caste. Reservation does not have any connection with efficiency too. The latter is an outcome of many variables, such as organization culture, employee motivation, systems and processes, technology, training etc. Most of these variables depend upon the management which is virtually monopolized by the upper caste elites. If a person in the organization is not efficient, the onus must shift to the manager and not to an individual. Reservations do not have any connection with foreign direct investments. The foreign investments do not flow by seeing the caste of employees. For all these years when India was exclusively ruled by brahmans and banias, foreign investors did not even look at it. They appear enamored with it today because of its huge market, its infrastructure, its trained manpower available at paltry wages, its high interest rates, its political stability and consequently expectation of high rate of returns. Who has created this market; it is not a handful of upper caste ‘meritorious’ people but evidently the majority belonging to ‘meritless’ lower castes. Reservations have certainly contributed in creating this market by putting purchasing power in their hands. It may be easily seen that none of the factors that attract foreign investments into the country depend upon a handful upper caste people but on the contributions of vast masses.

Before taking the debate on reservation in the private sector further, there is a need to rearticulate the concept of reservation in India. Much of the opposition and resistance to reservation can be traced to their wrong conception which even the supporters of reservation have not contested or corrected. The ubiquitous argument of merit, mischievous advocacy for reservations for economically poor, extension of reservation to the other backward castes as implemented as per the Mandal Commission recommendations; the argument of efficiency, erosion of attractiveness of India to the foreign investors, etc. can all be seen clearly in its light. Reservation, in viable terms can only be conceived as a Constitutional contrivance against the disability of Indian society to treat dalits equally and justly. Any other way, it will prove to be a veritable carrot that can be endlessly dangled before the masses in order to engage them in perpetual cold war in the name of archaic castes and communities. Moreover, only this premise can have a promise to end reservation by removing the disability of the society, any other way reservation will remains perpetually contentious. This premise will clear much of the confusion and motivate people to strive for annihilation of castes. It will catalyze right appreciation of these policies and largely eliminate the cause of social conflict.

If this conception takes root, it will be easy to reconcile that Reservations cannot be artificially restricted to the government and Public sectors and they should be applicable naturally to all the other sectors. Going by the labour theory of value the lower caste people as the labouring class can rightly stake claim to the entire wealth of this country. But they are not doing so. The upper caste elites better understand that it is the born right of all such people who are socially discriminated against to avail reservation. Reservation in the private sector thus becomes just a correction to the basic policy enshrined in the Constitution. Our Constitution unfortunately implies the constricted premise for reservation; it may need correction by way of suitable amendment. The Constitutional experts opine that reservation in the private sector also cannot be implemented without an amendment to the Constitution. It is in the interest of all that the rearticulated premise behind reservation as suggested above is agreed and incorporated into the Constitution. Mere policy is never enough. There needs to be a genuine political will backing the policy to get it implemented. This political will not come without pressure from the beneficiaries. The importance of potent Dalit movement here gets underscored. Such a Dalit movement today may sound as a far cry but then one should also reconcile that reservation in the private sectors will also remain a far cry without a dalit movement.

Dalits must realize the limitations of any kind of reservation. The greatest damage reservations have done to dalit interests is to effectively eclipse the dalit struggle for emancipation. Paradoxically, it is the very struggle that can create requisite political will for the effective implementation of reservation too. The technological advances have lowered the employment elasticities to near zero, which means that there is not going to be a big space for reservation within the prevailing system. The capacity of reservation to benefit dalits can be gauged from the fact that less than 1.7 % of dalits have benefited from it over the last 50 years. Notwithstanding the justification of all pervading reservation until the societal disability is removed by complete annihilation of castes, the talk of catalyzing dalit bourgeoisie in some circles is not saying the same. Emergence of dalit petty bourgeoisie through the reservation process has already been problematic; although nobody can deny its potential utility to dalit movement. But promotion of the adversary parasitic class within shall be absolutely suicidal to the dalit interests. There is no alternative for a potent dalit movement against the present system with neoliberal (globalization) ethos. There is no alternative to incessant dalit struggle for creating a just world order.

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