Time for caste quota in private sector

26 February,2024 06:52 AM IST |  Mumbai  |  Ajaz Ashraf

Public sector is shrinking rapidly, and the upper-caste leadership of companies that aren’t State-controlled is disinclined to voluntarily undertake affirmative action. I.N.D.I.A must take up this issue

In 2019, a Right to Information application filed by journalist Sarah Khan showed private companies were less keen on creating jobs for the lower castes than spending money on their education. Representation Pic

The whittled-down I.N.D.I.A formation has stayed the course on promising a caste Census and distribution of government jobs in proportion to the count of the Scheduled Castes, Scheduled Tribes, Other Backward Classes and General Category. This promise is unlikely to have efficacy in the context of the public sector shrinking rapidly. The Opposition must tap the private sector for retaining the robustness of India's reservation policy.

Consider this: between 2013 and 2023, the number of employees in the Central public sector enterprises (CPSEs) contracted from 17.3 lakh to 14.9 lakh, and that of Central government employees, excluding the armed forces, from 33.2 lakh to 31.7 lakh. Contract or casual labour accounted for 43 per cent of CPSEs employees in 2023, up from 17 per cent in 2013. Contract workers do not enjoy security of tenure, have low wages and minimal social security. Public sector jobs are decreasing and losing sheen.

The shrinking of the public sector began with the liberalisation of the economy in 1991, a year after 27 per cent reservation was extended to the OBCs. The overlapping of these simultaneous trends was not perceived as coincidental. There, thus, arose a cry for imposing a caste quota on the private sector.

In response, the government of Manmohan Singh, in 2004, wrote to 200 organisations to elicit their views on private sector reservation. Few replied. The government entered into dialogue, in 2006, with the private sector, which baulked at the idea of mandatory caste quota. Ultimately, the government accepted the proposal of the Confederation of Indian Industry to evolve for its affiliates a voluntary Code of Conduct for pursuing affirmative action.

The 13-point Code included companies avowing that social diversity improves business productivity, eschewing conscious discrimination, spending money on the education of disadvantaged social groups, and skilling workers. In 2006 itself, the parliamentary committee on the welfare of SCs and STs read the Code as an attempt to stonewall caste diversity in private sector employment. The committee, therefore, proposed a law for introducing SC and ST quotas in the private sector. Ten years later, the National Commission for Backward Classes recommended 27 per cent OBC reservation in the private sector.

Voluntarism became an escape route for the private sector. For instance, in 2019, a Right to Information application filed by journalist Sarah Khan showed private companies were less keen on creating jobs for the lower castes than spending money on their education. Milind Kamble, the founder chairman of the Dalit Indian Chamber of Commerce and Industry, rued to a newspaper, in 2022, that the private sector mistakes expenditure under Corporate Social Responsibility as spends on affirmative action, eventually leading to its derailment.

Private sector companies claim they cannot discriminate as their motive of profit maximisation has them hire in their own interest meritorious employees regardless of their identities. However, in a 2007 study, the research team of Sukhadeo Thorat and Paul Attwell sent by post three sets of applications - one each by an SC, a Muslim, a high caste, all easily identifiable by their names - with matching educational qualifications in response to private sector jobs advertised in newspapers. SC and Muslim candidates fared significantly less than their high- caste counterparts.

Again, in a 2018 study, Thorat, S Madheswaran and B P Vani showed that 73 per cent of job differentials between the SCs and high castes in the urban labour market were due to discrimination and 27 per cent on account of education and professional skills. In contrast to the private sector's belief that affirmative action undermines merit, Ashwini Deshpande and Thomas E Weisskopf's study showed the Indian Railway's productivity to be positively linked with the proportion of SC/ST employees in its higher echelons. Avowals to implement affirmative action just do not help.

One way of introducing it is to emulate South Africa's Broad-Based Black Empowerment Act (B-BBEE), which has created a legal framework for scoring companies on the basis of verifiable benchmarks for affirmative action. The B-BBEE scorecard takes into account the percentage of Black ownership of a company, the percentage of Blacks in its top management, the percentage of its purchases from Black-owned enterprises, the expenditure incurred on skilling workers, and investments made for the development of Blacks. Large companies are considered B-BBEE compliant when these have 30 per cent Black ownership and 50 per cent of their executive management are Black.

B-BBEE compliance is not a legislative requirement, but companies opt for it so as not to lose out on government procurements and tenders. A good B-BBEE scorecard enhances their reputation and widens customer base. To push up their own score, companies prefer to do business with those that are B-BBEE compliant. This system, without directly imposing mandatory race quotas, has notched successes because there is a unity of purpose among Blacks regarding their own empowerment in a country overwhelmingly Black.

India's caste system is infinitely more socially heterogeneous than the racial one, making it difficult to build consensus on affirmative action in the private sector. Its largely upper-caste leadership appears disinterested in voluntarily undertaking affirmative action. It is indeed time for I.N.D.I.A as well as India to talk of introducing a caste quota or other mandatory benchmarks for affirmative action in the private sector.

The writer is a senior journalist.
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