Saving Private Mandal

Arun Jaitley, BJP General-Secy "PSEs will be incentivised for opportunities for SC/STs."

 

Bangaru Laxman, Ex-BJP President "Jobs have been shrinking in the public sector post-reforms."

 

Digvijay Singh, Former MP CM "Govt purchases from SC/ST youth gave them business." 

Sanjiva Reddy Member, INTUC "How will the private sector survive global competition?" 

Amit Mitra, FICCI Secy-General "Extra-market forces can compensate for history." 

Ram Vilas Paswan, Lok Janshakti Leader "It is the social responsibility of the private sector." 

Fourteen years after V.P. Singh’s National Front government introduced reservations for OBCs, triggering off violent reactions among the upper castes, Mandal is back on the frontburner. The UPA government may be more politically correct in calling it ‘affirmative action’ instead of ‘reservation’, but its decision to explore the same in the private sector is raising a few hackles. Already, the first responses from industry range from being guarded to hostile, major political parties stand divided and the trade unions are split down the middle.

If the government position is "no legislation as of now", most political votaries of affirmative action believe it to be inevitable. The very explosiveness of the subject makes it a hot election issue and while there may be no real national consensus on reservation, every political party has come to terms with the fact that to oppose reservation is to lose votes.

While politicians see reservation as an effective tool, many trade unions are surprisingly wary of it. The Congress-affiliated INTUC’s Sanjiva Reddy says the move could kill jobs as it would reduce the competitive edge of the private sector. "The idea of reservation may be good," he says, "but the cost to the nation in creation of jobs may be too much. How will the private sector survive amidst global competition?" Girish Awasthi of the RSS-affiliated bms is categorical: "We’re opposing the move. If it goes through, education will be downgraded and merit will suffer. The disadvantaged sections should be given training and education to help them compete with others." Only the Left unions are backing the move. Says the CPI(M)-affiliated CITU’s M.K. Pandhe: "This is a matter that has to be legislated, it can’t be left to the good sense of the private sector."

The current debate began after Prime Minister Manmohan Singh constituted a Group of Ministers (GoM) on August 31 "to examine the issue of affirmative action, including reservations, in the private sector" and initiate "a dialogue with industry to see how best the private sector can fulfil the aspirations of SC/ST youth". The GoM followed commitments made in the Congress manifesto—reiterated in its political resolution at its recent convention on August 21, in the UPA’s Common Minimum Programme and in President A.P.J. Abdul Kalam’s first address to the joint session of Parliament on June 7.

At his first press conference on September 4, the PM made it clear that the government felt "opportunities for SCs, STs and similar disadvantaged groups in the private sector need to be enlarged". But he was diplomatic when he said "the GoM will engage in a constructive dialogue with industry, without legislation as of now", Later, responding to another question, he punctured industry’s argument that it would adversely affect efficiency and hence growth by saying that affirmative action would not hurt growth, as "growth must be equitable, otherwise, its sustainability will be affected".

But the UPA’s stated commitment aside, opinion within the government itself is divided. A prime ministerial aide said the stress was on "affirmative action" rather than "reservation".Other PMO functionaries said the object was "to generate a national debate", that it was "an issue addressed to a specific constituency", that "education" was the only route to "empowerment" and that the present exercise envisaged tax incentives for companies which gave a certain number of jobs rather than mandatory reservation to SC/STs.

If most government functionaries are playing down the current move, others are open about it. One senior PMO official told Outlook, "It’s now on the table and has the potential to become an election issue if there’s too much resistance to it." According to him, if industry was asked to give a break-up of castes/communities employed even at the lowest level, it would reveal a skewed representation."In the US, when affirmative action on the basis of race was challenged in the Supreme Court, it ruled that since race rather than poverty was the basis of discrimination, it had to be the basis of affirmative action too. In our case, substitute caste for race. That’s the basis for discrimination; it must be the basis for affirmative action." But hadn’t the PM ruled out legislation? "He doesn’t wish to start on a contentious note, but influential sections, not just among the allies but even within the Congress, want to push it through."

The GoM’s composition is interesting. Headed by the pragmatic Sharad Pawar, the diehard Mandal votaries Laloo Yadav, Ram Vilas Paswan and Meira Kumar are balanced by industry-friendly P. Chidambaram, Kamal Nath and Dayanidhi Maran. Of course, the views of Maran’s party, the DMK, may not coincide with his. Already, the PMK, a DMK ally, has asked the government to legislate for reservation in private sector. Of the GoM members, Kumar’s asked industry "to rise above the Dronacharya mindset and the Eklavya phobia". Paswan says "with jobs shrinking in the public sector—where there’s reservation—it’s the private sector’s social responsibility to fill the gap".

Industry, of course, is opposed to legislation or any mandatory directive from the government, arguing it would impair efficiency, militate against merit, hamper growth. Indeed, its opposition to reservation has ensured that a Maharashtra government legislation—Maharashtra Act No. VIII of 2003 which received the governor’s assent on January 22, 2004—which envisages, among other things, 52 per cent reservation for OBCs, SCs and STs in companies which have either taken land leases or loans from government, is yet to be implemented. While some major companies have threatened to pull out of Maharashtra if forced to implement this law, CII and FICCI representatives have persuaded CM Sushilkumar Shinde to review the matter after assembly polls next month.

Industry feels the emphasis should be elsewhere. FICCI secretary-general Amit Mitra’s report on the subject concludes that skill development and encouragement of entrepreneurship among vulnerable sections, combined with tax incentives for companies practising affirmative action, is the answer rather than government-imposed quotas. "We have to use market forces and extra market forces—such as price preferences for entrepreneurs from these sections—to compensate for history," he says. CII director-general N. Srinivasan lists what his organisation has already done to fulfil its social responsibilities. These include a skills-upgradation programme covering one million people; the Bharat Yuva Shakti Trust which has created 1,000 entrepreneurs from the weaker sections over the last eight years who’re now employing 12,000 persons; sponsorship of three villages in the South to promote dying crafts; helping upgrade industrial training institutes, and a project to make J&K youth "employable".

Governments, too, have experimented with other affirmative action models, such as the one initiated by former MP chief minister Digvijay Singh, through which 30 per cent of all government purchases are made from SC/ST entrepreneurs.In the last two years, the state government has made such purchases totalling approximately Rs 100 crore. "Since the government is one of the largest purchasers, this was a good way to give business to SC/ST youth. All contracts worth up to Rs 2 lakh were given to them without the procedure of tenders," says Digvijay Singh.

If the government’s move has put industry in a fix, it seems to have put the BJP too in a quandary. Party general-secretary Arun Jaitley says the party line is in its Vision Document. "Private sector enterprises will be incentivised for creating more educational, training, employment and entrepreneurship opportunities for SC/STs," he says.But Bangaru Laxman, former BJP president and a Dalit to boot who reflects the views of the party’s substantial Dalit, tribal and OBC base, supports reservation in the private sector: "The assurance given by our constitution-makers on reservation will become meaningless if the private sector does not give reservation, as jobs in the public sector post-liberalisation are shrinking."

Clearly, reservation, be it by any name, ruffles feathers any which way and the government wants to test the waters before it takes the plunge. That explains why it’s first walking the talk with political parties, the industry and trade unions.