Consideration for a policy framework
  d.l. sheth

back to issue

THE debate on reservations in the private sector has so far failed to produce a workable policy proposal. What we have from the government is reiteration, at regular intervals, of its intention to implement the policy. But nobody knows what that policy is. It still remains an electoral promise committed to paper in the UPA’s Common Minimum Programme and subsequently referred to a committee for consideration of implementation. The assumption is that no fresh policy needs to be formulated and all that is involved is a simple task of extending the old, established policy of reservations in the government sector to the private sector.

The pressure groups demanding reservations in the private sector too routinely produce the same litany of arguments they once advanced for justifying reservations in the government sector, i.e., seeking compensation for the systemic wrongs of the past by means of a policy of reverse discrimination. They too view the problem as one of extending the existing policy of reservations to the private sector. The only problem they see impeding implementation is an absence of the necessary political will to pro-actively persuade, prepare and, if necessary, compel the corporate world to accept the proposal.

On the other end of the spectrum we have dyed-in-the-wool liberals opposed to any policy of reservations. This time round they have overstretched their argument by advocating a completely hands-off policy for the state and relying on the good sense of the business leaders for sorting out the issue. The idea of social responsibility of the corporate sector is also invoked in this context – the evidence for which, however, is yet to come in the public view. The policy, they argue, must be allowed to ‘evolve’ through the dialectic that may grow between the corporate sector and the concerned groups of stakeholders. The implication of this proposal is simple: there is no need for a sector-wide policy of affirmative action; the decision whether or not to apply the social justice principle in recruitment and in what form and to what extent, should be left to the voluntary decision of an individual corporate firm.

Of course, the professional business bodies will be there to take view of this process and make available to the public all the relevant statistics! But they will have no responsibility for non-implementation by any individual company or for the sector as a whole. In effect there will be few such firms in the country showcasing the idea of social justice and diversity, the rest continuing with their archaic and nepotistic recruitment practices, serving neither the cause of liberalization nor of social justice. In short, the argument is itself a strategy: expand the rhetoric of affirmative action, but do not allow it to become policy.

The inability, rather unwillingness, of the government to separate the issue of reservations in the economic sector on the one hand, and the opponents’ unwillingness to see the need for a social justice policy in the private sector on the other, seems to perform some interesting political functions. First, it has pushed the issue out of the arena of mobilisational politics into the familiar policy frame of active non-decision making. This allows the government to assume a righteous stance and shift the blame for non-action onto the ‘other parties’, more specifically the corporate world. The corporate world does not mind the blame game in so far as it is spared the hard consequences of the policy it fears the most. For politicians of the ruling coalition it serves as a ready to use weapon kept in the storehouse; it can be brought out and deployed in the eventuality of a political need. Second, the proposal of reproducing existing reservations policy in the economic sector has given a fillip to the old opposition to reservations that had receded over the years. The opponents of reservations find the old arguments not just useful, but effective. Further, the issue has now been hitched to the larger discourse of liberalization, questioning the relevance of affirmative action policy in the changed global economic context.



To put it simply, with no party to the current debate coming up with any workable proposal that can meet both the demands of social justice and the needs of the corporate sector, the issue is likely to meet the fate of the Women’s Reservation Bill. What we are witnessing is a textbook case of an active policy of non-decision making. The only problem with such a ‘policy’ is that it may produce an outcome no one ever wanted!

The first step in the direction of formulating a workable policy is, in my view, the realisation by the concerned parties that the system of reservations in the state sector cannot, and should not, be reproduced in the private sector. In what follows I shall elaborate this point by focusing on three specific issues of policy with a view to illustrating the difference between the two sectors and suggesting some ingredients for a new policy for the private sector. The issues are: (i) justifications for the policy, (ii) determination of units of implementation, and (iii) identification of beneficiaries.



Reservations in the state sector is a social policy integral to the institutional structure of a liberal democracy. It is particularly necessitated, at some point and in some form, in the process of a liberal democracy institutionally embodying the principle of political equality in a socially inequitious and culturally diverse society. In this process, the policy not only makes seats and jobs available to the beneficiaries, but inevitably results in challenging, even upstaging, the existing power structure, i.e., the rule of a social minority legitimated by an antecedent social structure. In this sense the policy primarily addresses the issue of redistribution of political and bureaucratic power and, in the long run, contributes to the restructuring of state power. It is for this reason that reservation in the state sector – despite persistent opposition from sections of the population adversely affected by it – is widely seen, including by its opponents, as making good democratic sense, and as a legitimate policy instrument for substantialising liberal democracy’s cardinal principle of political equality.

In India this policy has acquired special significance. Liberal democracy here was confronted with a formidable task of institutionalizing political equality in a caste society marked by deep rooted and historically legitimated structure of political dominance of an upper-caste minority. Such a monopoly of political power, maintained and enjoyed for centuries by a small dvija elite, perpetuated and deepened social and cultural inequalities. The policy of reservations in the state sector greatly contributed to breaking the caste-created social-cultural barriers to the inclusion of historically excluded groups – dalits, adivasis and the sudras – into the growing political community created and sustained by the institutions of liberal democracy. The working of the policy facilitated not just political participation of these groups but made possible their entry into the power structure.



The issue of reservations in the private sector is, theoretically (and politically) somewhat different. The issue here is about ensuring conditions of openness and non-discrimination to individuals of diverse social, economic and cultural backgrounds, all competing to achieve and maximize economic goods. In the logic of liberal democracy, the social justice issue here is more about ensuring fairness in economic competition than the state intervening directly in the determination of consequences of competition. To state it differently, the argument of equality in the economic sector is limited to creating a level-playing field, rather than equalizing the abilities or disabilities of the players themselves.

Obviously, this argument does not take into account, if not wish away, the known and established tendencies of a liberal democracy to favour the intrinsically strong among the competitors who enter the race with a head start. The system usually ends up endowing a minority of the strong (elite in every sector) with a superior morality and the power to define the rules of the game, ostensibly to maintain procedural fairness such that the inequalities in the various non-state sectors (economic, cultural, aesthetic etc.) remain manageable. This rather inadequately theorized relationship in liberal democratic theory between state (political) power and power in the various non-state sectors, whose growth and even autonomy liberal democracy not only allows but promotes, has prevented the emergence of the ‘good democratic’ argument in support of reservations in the private sector. But in no case can the theory deny the role of the state in devising a policy to ensure a level playing field in recruitment policies of the private sector.



The issue of determining the organisational units and levels of implementation is crucial for policy. It is important to realize that the units of implementation of social justice policy in the economic sector are structurally different from the administrative units for reservation policy in the state sector. Involved here are myriad (hundreds of thousands) non-state economic organizations, each different from the other, not just in size and viability but in their ability to absorb different environmental (social, cultural) and policy inputs. It will be a stupendous task to set up mechanisms for implementation, monitoring and reviewing the working of a policy encompassing such a diverse universe.

Considering the number of units and diversity of the population involved, any uniform policy either in terms of fixing quotas or determining types of beneficiaries appears unworkable . The policy will have to depend on guidelines and a general list of different types of beneficiaries with reference to which optimal numbers for a particular recruiting unit could be decided. In short, an employing unit will have to be given some latitude in choosing numbers and types of beneficiaries with reference to the guidelines and the given generic lists. But in framing, monitoring and implementing the guidelines the state will have to assume the overall responsibility and set up oversight bodies, of course by also incorporating members from the business world and other non-state sectors.



The concept of the beneficiary of social justice policy in the economic sector cannot be identical with that in the state sector. First, because the historical exclusion of communities from political power (which was structured in terms of ritual relationships) is, as we shall presently see, not the same as exclusion from the economy. Second, social justice in the economic sector also needs to address the new forms of exclusion and not confine itself only to the communities suffering from traditional ritual status disabilities. This would mean inclusion of categories like linguistic and religious minorities as well as women and the physically handicapped. Thus, unlike in the state sector, a multiplicity of categories will be involved, each requiring diverse modes of implementation. In other words, identification of beneficiaries will have to be made differently in different local contexts.

In effect, preferences may have to be exercised from a broad spectrum of categories without binding the recruiting organization to a fixed number of categories or a fixed numerical quota for a category. And yet, the state will have to find ways and means of making the policy target oriented so that the preferred presences of different cultural groups are achieved for the sector as a whole. A social justice policy in the private sector will thus have to link considerations of historical deprivation and discrimination with those relating to contemporary forms of exclusion, i.e., mixing the criteria of deprivation and diversity.

Viewed in the above perspective, one beneficiary category of the state sector reservation that will have to be included in the policy for the private sector is dalit, or the scheduled caste. It may, however, become necessary in this process to review the existing state lists of SCs and confine the category strictly to the ritually totally barred communities of the ex-untouchables and particularly to those among them who have not achieved any significant level of upward social mobility. The rationale for the inclusion of the ex-untouchable communities is not just diversity, but more specifically, social justice.



It is important to note in this context that historically the dalits were never formally recognized as a part of the caste system. As such, they were not assigned any specifically defined role or work in the system’s production and service domains (nor in any other domain), thus constraining their means of livelihood. This systemic deprivation of livelihood accompanied by social, cultural and moral exclusion of these communities forced them to live in a perpetual situation of moral compulsion and adopt ‘means of livelihood’ involving work that was discarded as unclean and degrading by the communities whom the system granted one or the other entitlement, ensuring them some kind of right to work. Being ousted even from the system of graded exclusion (caste), these communities remained permanently degraded leaving them, unlike the other communities, little or no scope for upward mobility. Without economic empowerment that can come through their participation at all levels in the private sector of the economy, the goal of their inclusion can never be achieved.

A similar logic of inclusion will also apply to the scheduled tribes category. Their social and cultural exclusion, however, unlike the dalits, is more a result of physical isolation than of ritual and cultural debasement. The modern economic organization, however, can no longer afford to keep this population permanently on its periphery. The issue of linking the corporate sector and the tribal economy is not just complex but tricky. It calls for working out a simultaneous strategy of reaching out (through economic and technological assistance programmes) and taking in (through recruitment).



The third category of the OBC is the most problematic for both theoretical as well as practical reasons. Theoretically, the communities of the OBC category – the agricultural and artisan communities – cannot be seen as economically excluded communities of the caste system. In fact, they constituted the backbone of the caste economy, despite being ritually and socially distanced from the hegemonic power of the dvijas. Quite a few of these communities of primary producers have an adequate stock of skills and social capital to successfully adapt to the modern economy, and enter its new middle class as economic entrepreneurs. In every Indian state there are communities of erstwhile sudras who have made a mark as successful businessmen, ‘progressive farmers’, building contractors, hoteliers, and as small and large-scale industrial entrepreneurs. Some examples are the Panchals of Gujarat and the Charis and Bhandaris in some South Indian states (especially in the Konkan area). It is, however, also true that many of these communities have lost their crafts and joined the ranks of landless labour. This category, therefore, on the whole would require ‘reaching out’ schemes through which the organized corporate sector can link with the communities of new entrepreneurs and primary producers in the rural areas.

Besides the fact that OBC is not an appropriate category for the private sector’s social justice policy of job recruitment, it presents formidable practical problems of identifying the communities that need to be considered for recruitment purposes of the policy. This is because OBC is a heterogeneous and internally vastly differentiated category whose conditions and community-wise numerical strength, unlike the dalits and tribals, remain officially unsurveyed.



To recapitulate the main points of the above discussion:

1. An application of the social justice principle to the economic sector requires fresh policy thinking so that proposals appropriate and beneficial to the sector can be evolved within the institutional logic of liberal democracy.

2. It will be disastrous to reproduce the state-sector reservations system in the economic sector. This will not just harm the economy, but also the established cause and policy of social justice.

3. A social justice policy for the economic sector requires a radical reconsideration of beneficiary categories from the ones which are in practice in the state sector. The exercise for identifying beneficiary categories will have to be simultaneously informed by considerations of ‘deprivation’ and diversity. This would mean that unlike in the state sector, the potential beneficiaries would include the traditionally economically excluded groups of the dalits, adivasis and women as well as the culturally and politically peripheral groups of linguistic and religious minorities.

4. In its implementation the policy will have to remain sensitive to social-demographic and cultural differences (marking out wherever required, for example, a group which may be a minority in one area and a majority in another) at the local/regional levels; in the process, allowing a particular economic firm to set its own targets of recruitment.

5. Although the policy may not, rather need not, attain uniformity at the level of implementation, it must apply to the entire sector. It has to take the form of a legislated action of the state.

6. The emphasis on benefits, rather than on permanently fixed beneficiary categories, should lead to a series of programmes of economic and technological assistance and skill development that enhance employability as well as entrepreneurial capabilities of the beneficiaries at large. The policy, therefore, should also be viewed as one leading to inclusion, and eventually integration, of the socially and culturally deprived and diverse communities into the modern economy, while addressing issues of reform of the discriminatory and outdated recruitment practices followed by many economic units in the private sector. For example, companies may be induced to devise special executive-training programmes for beneficiary groups and thus achieve a desired degree of diversity.

7. Although given the intrinsic nature of the economic sector, the policy may not be based on a quota system or the idea of mechanical representation of permanently fixed categories of beneficiaries, mechanisms will have to be created by the state to ensure different cultural presences in every economic unit of the sector.

8. Such a policy need not be co-terminous with reservations, but its social justice character should not be diluted nor should the state be allowed to abdicate its responsibility.