PREFERENTIAL policies for the benefit of socially disadvantaged groups have been devised and applied in various countries. These policies are of many different kinds, and they go under different names, such as affirmative action, positive discrimination, reverse discrimination or, simply, reservations. They have been justified by the argument for equality as well as the argument for diversity. In India the argument for equality has been the predominant one whereas in the United States the argument for diversity has had a strong appeal. In both countries the policies have had strong supporters and equally strong opponents, and it is not easy to make a balanced assessment of their overall consequences even for a single country.

India’s preferential policies are among the oldest and most comprehensive of such policies in the world. They have undergone many transformations since they were first introduced by the colonial government just after World War I, i.e. more than 80 years ago. The British who administered the country at the time did not generally regard India as a society of citizens but as one of castes and communities, and in the 19th and early 20th centuries there was some justification for doing so. They felt that in such a society the different castes and communities would not be adequately represented in education and employment unless special provisions were made for their presence.

The leaders of the Congress party which spearheaded the nationalist movement did not view quotas in education and employment, whether on the basis of caste or of religion, with much favour. They saw them as being socially and politically divisive, and certainly the British were not above using them to keep the nationalist movement in check. The colonial administration did not have any grand design for transforming the structure of Indian society. Their objective in introducing quotas was mainly the practical one of governing a large, complex, and alien society by balancing the different interests in it and without causing too much internal friction. But their policies had created new expectations of a kind unknown in the past, and these came to be expressed with increasing force after their departure from India.

The coming of independence in 1947 and the adoption of a republican constitution in 1950 brought a change in the framework of preferential policies. The British had introduced quotas in a piecemeal fashion and on a small scale without thinking to create a new structure of rights to be supported by a new kind of jurisprudence. In colonial times, caste quotas were matters of policy rather than matters of right. The new constitution created a whole array of rights, including fundamental rights, for individuals as citizens. In course of time caste quotas came to be represented more and more as matters of right – as what was due to members of disadvantaged communities for their past mistreatment – and not just as matters of policy. In the period since independence, the course followed by reservations has been shaped not only by the greatly expanded scope of politics but also by extensive judicial intervention.

Between the two commissions, the movement for increasingly comprehensive quotas was spurred by the combined operation of the political and the judicial processes in a manner that may be regarded as characteristic of Indian democracy. Politicians dangled the prospects of quotas before more and more castes and communities in the expectation of gathering their political support. The courts showed themselves to be increasingly responsive to demands made in the name of social justice. The restraints that the Supreme Court under Justice Gajendragadkar had sought to impose on the expansion of caste quotas in Balaji’s case in 1962 were progressively relaxed.

What led to the shift from a policy-based to a rights-based approach to caste quotas? The new constitution not only sought to advance the conditions of disadvantaged castes and communities, it also made ample provisions for the rights of individuals as citizens of a kind that did not exist under British rule. It prohibited discrimination on grounds of religion, race, caste, sex and place of birth, and guaranteed equality of opportunity in public employment without consideration of those grounds. The first amendment to the constitution had to be made in the wake of the Champakam Dorairajan case in which a Brahmin girl who had failed to secure a place in a medical college in Madras on account of caste quotas pleaded before the court that her fundamental right under Art. 15 which prohibited discrimination on the ground of caste had been violated.

But in the social as in the physical world, every action generates its own reaction. The argument that individual rights had to be protected by the constitution came to be met by the one that socially-disadvantaged castes also had rights and they too needed the care and attention of the state. One right was invoked to trump another, and in the prevalent political turmoil the courts allowed and encouraged, and sometimes themselves adopted, the language of rights in dealing with positive discrimination cases.

In arguing for affirmative action in the Bakke case, he maintained that Alan Bakke did not have a right of admission to medical school simply because his test scores were relatively high. But then, neither did the Black students selected under the affirmative action programme have such rights. He supported the admission of those students as against Bakke on the ground that it was good policy for the medical school of the University of California at Davis to have a diverse student body and, since that policy did not violate any rights, of either Black or White students, it should be adopted.

Dr Ambedkar saw more clearly than most other persons in his time or since the tension created by having special provisions for some sections of society over and above the general provision of equality of opportunity for all its individual members. He advocated very strongly the rights of citizenship, and those rights were the rights of individuals without consideration of race, caste or gender. But he felt that it was not enough to have equal provisions for all citizens, and urged the need to have special provisions for those sections of society that had suffered from severe social disabilities since time immemorial.

At the same time, he warned that the special provisions should not be allowed to ‘eat up’ the general provision of equality of opportunity for all. The restraint urged on the creation of special provisions by Dr Ambedkar has not always been observed with due care by either the legislatures or the courts.

The constitutional provisions for positive discrimination are elaborate and complex. To begin with, a distinction has to be made between mandatory provisions and enabling provisions. Mandatory provisions, like the one relating to the reservation of seats in the Lok Sabha under Art. 330, are those that must be applied. Enabling provisions, like the one under Art. 16(4) relating to reservations in employment, are those that may be applied, depending upon conditions and circumstances. Enabling provisions are necessary where preferential policies may be challenged on the ground that they appear inconsistent with other provisions, such as those that relate to equality of opportunity for all citizens irrespective of caste.

In course of time, the distinction between mandatory and enabling provisions has come to be blurred largely due to the rhetoric of social justice. Even the courts developed a tendency to treat all provisions relating to positive discrimination as mandatory ones. This was consistent with the shift from the treatment of reservations as a matter of policy to its treatment as a matter of right. A system of mandatory numerical quotas left very little scope for autonomous or semi-autonomous institutions such as the universities to devise their own programmes of affirmative action.

The movement for reservations took a back seat for some time because many of those who had supported it out of sincere, though perhaps misguided, moral concern saw a little more clearly the cynical political manoeuvres that were often behind it. It has once again been given a new lease of life by the proposal to extend it to the private sector.

It cannot be too strongly emphasized that the move to extend caste-based reservations to the private sector is a new development in the long history of preferential policies in India. Undoubtedly, it is the same social and political impulse that lay dormant for some time following the Mandal agitations that seeks the extension of caste based reservations from the public to the private sector: if the public sector has carried the burden of the backward classes for so long, why should the private sector not now carry a part of it? After all, the private and the public sectors are both parts of the same society, and no major stakeholder in it should remain indifferent to its well-being.

Sharp disparities of caste and gender are not in the long-term interest of business and industry. Their reduction will contribute not only to social justice but also to economic efficiency. A great deal of talent, including entrepreneurial and managerial talent, lies unutilized in the country because opportunities for education and training are simply outside the reach of large sections of Indian society. This is not merely socially unjust, it is economically wasteful. There is no reason to believe that this simple truth is beyond the comprehension of the leaders of business and industry in India. If we are to devise more imaginative policies of affirmative action, we must put behind us the belief that the government, and the government alone, can act from a sense of social responsibility.

There is no reason why the private sector cannot be more actively engaged in affirmative action. But that is not likely to happen so long as affirmative action continues to be equated with mandatory numerical quotas administered under strict bureaucratic supervision. The quota mentality has taken deep roots in India since independence, and it has been a serious obstacle to economic development and social progress. Quotas in private sector employment are bound to give rise to strains in the economic as well as the legal systems whose consequences are likely to be far-reaching.

High levels of performance cannot be maintained in the private sector without a flexible system of job contracts. There cannot be a uniform distribution of rewards, including promotions, to all employees irrespective of performance as has become common in the services of the union and state governments. In the private sector, work practices and norms have to be oriented to efficiency of performance rather than seniority and permanence of tenure. There is no reason why in principle employment in the public sector cannot create more room for rewards and incentives, but bureaucratic office tends to be viewed as based on status rather than contract. Permanence of tenure has come to be viewed as a right of the government servant, and the procedures for the termination of services are so complicated as to be virtually unworkable.

Mandatory caste quotas tend to reinforce the element of status as against that of contract in public employment. A government employee is in any case difficult to dislodge from his position; where his appointment is due to a caste quota, it is virtually impossible to terminate his services. Owners and managers of private companies dread nothing more than having to accumulate growing numbers of non-performing employees; they are far more difficult to deal with than non-performing material assets.

It is now coming to be widely recognized that the command economy that prevailed until the eighties had for some time been hamstrung by licences and quotas of every kind. Much of the success achieved by the Indian economy in the last ten to fifteen years has been due to the removal of the restraints under which it had to operate in the past. Even if those restraints were necessary in the formative years of a developing economy, they are not necessary any more. If quotas are bad for manufacture, and for imports and exports, how can quotas in employment be economically beneficial?

As I have already indicated, there is no reason why business and industry should remain indifferent to a problem that is deeply rooted in the structure of Indian society. Affirmative action is a response to a problem that has scarred Indian society for centuries and tarnished its image in the comity of nations. No other society has nourished such deep and pervasive inequalities based on false and superstitious beliefs about inherited ability and character. Those inequalities, and the beliefs and practices on which they are based, are as bad for business as they are for public life, and they cannot be expected simply to vanish of their own accord.

In the Indian case the disparities between groups that have come down from the past are so large that policy interventions are essential to mitigate their effects. Unfortunately, the role of social policy in dealing with disparities has been undermined by the enthusiasm for creating more and more rights to solve every kind of problem. The imposition of mandatory quotas on private companies is not a feasible way of addressing the problem of inequalities in the conditions of competition. New and imaginative policies have to be devised if those inequalities are to be reduced. No useful purpose will be served by creating a confrontation between the government and the private sector if a way ahead is to be found.

Instead of seeking to extract its pound of flesh from business and enterprise, the government should encourage private companies to devise their own programmes of affirmative action. To begin with, tax concessions may be offered to companies that diversify the social composition of their employees. It will be in the long-term interest of the companies, and not just in the public interest, to adopt active measures to seek out, stimulate and nourish the vast reservoir of unutilized talent that exists in the socially and educationally backward communities. There should be far greater private investment in education and training. Again, the government should encourage private companies to stimulate and foster talent among members of socially disadvantaged groups.