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Rediff.com  » Business » What are job quotas in private sector all about?

What are job quotas in private sector all about?

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June 09, 2004 14:36 IST

The idea of reservation of jobs for backward castes in the private sector has stirred a hornet's nest. 

Supporters of job quotas say Indian democracy cannot afford inequality and needs equitable growth of all sections of  society.

They also say since the public sector has not been generating enough employment, the so-called backward castes must be accommodated in the private sector through quotas.

Those opposed to the idea feel such restrictions will affect corporate India's efficiency.

The private sector employs people on the basis of merit and not caste, they argue.

The highly emotive issue is now the subject of hot debate.

So what do these job reservations mean? rediff.com finds out.

What are job quotas in the private sector?

The Common Minimum Programme of the Congress-led United Progressive Alliance suggests that there be job reservations for scheduled castes and scheduled tribes in the private sector.

The CMP says it is 'very sensitive to the issue of affirmative action including reservations' in the private industry sector.

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'It (the government) will immediately initiate a national dialogue with all political parties, industry and other organisations to see how best the private sector can fulfil the aspirations of scheduled caste and schedule tribe youth,' says the CMP.

The proposal has met with opposition from Indian industry, which feels that if implemented it will render domestic industry globally uncompetitive.

Already, job reservations for backward castes exist in the government sector. But this is the first time there has been talk of extending quotas to the private sector -- which has made the idea controversial.

Why does the UPA want quotas in private sector when it already exists in the government sector?

Public sector companies, where reservation has been in existence for a while now, have all been implementing Voluntary Retirement Schemes.

Jobs in PSUs are not growing and politicians feel the number of job opportunities available for the so-called backward castes are dwindling.

The logic behind job quotas in the private sector is that scheduled castes and scheduled tribes will have greater opportunity or economic and social mobility.

How serious is the government about this?

The UPA was serious enough to put in a reference regarding reservations in the private sector in the President's speech on June 7. Whenever a new government is sworn in, the President addresses a joint sitting of Parliament on the new government's main policy proclamations.

What exactly did President Kalam say?

'The government is sensitive to the issue of affirmative action including reservations in the private sector and it is committed to faster socio-economic and educational development of the scheduled castes and the scheduled tribes. My government will initiate a dialogue with political parties, industry and other bodies on how best the private sector can fulfill the aspirations of scheduled castes and scheduled tribes.'

Haven't quotas for scheduled castes and scheduled tribes been around for a while?

Yes. But only in the government sector. The private sector has never been brought under the reservation regime.

In 1990, Parliament passed a law reserving more than a quarter of all government jobs for the so-called backward castes. The private sector has, however, always been free to choose who it hires.

What do corporates think of it?

Corporates are terrified of the idea.

Industry says while it supports the idea of a solution that will help the so-called backward castes move upward socially and economically, implementing job quotas in the private sector is not the answer.

If Indian industry has to be globally competitive, companies say they should have the freedom to hire based on merit, rather than any other reason.

Will this scare off foreign firms?

Most likely, say economists.

Any kind of reservation affects efficiency, which in turns adversely impacts growth. If foreign enterprises do not have the freedom to choose who they can hire and are forced to take in people just to fulfill quotas then they will not come to India as they cannot remain competitive and maintain quality, the economists say.

How soon is this likely to be implemented?

Right now, the first step being suggested is a dialogue between politicians, industry and trade unions.

If a consensus is arrived at, the government can draft legislation and then get it passed in Parliament.

The entire process will take a considerable amount of time. One can safely say that job quotas won't be implemented in the private sector in the next couple of years.

Are only a few politicians at the Centre pushing for this?

Currently yes. But since the idea of reservations has great potential to garner votes, politicians across the spectrum are scared of speaking out against it.

In fact, states like Maharashtra now want to take up the idea of reservations in the private sector aggressively.

What exactly does Maharashtra want to do?

It wants all private employers to have at least half their employees from the so-called backward castes.

Maharashtra's legislature is debating a law that could mandate companies to employ up to half their staff from scheduled castes and scheduled tribes.

Priya Ganapati in Mumbai
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