People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 01

January 07, 2007

Why To Legislate For Reservation In Private Sector


M K Pandhe


THE inclusion of the concept of reservation in the private sector undertakings in the National Common Minimum Programme has evoked strong displeasure among the captains of industry all over India. They openly came out against the idea of reservation, which according to them would adversely affect the efficiency in the private sector. They even went to the extent of claiming that the reservation was one of the major causes of inefficient running of the public sector undertakings. 


The idea was first mooted by the Commission for SC and ST in response to the demand raised by the National Convention of SC and ST unions. The commission claimed that the employment of SC and ST workers in private sector was negligible due to low level of education and technical training among the dalit workers. The high drop out rates of dalit students in the school was not due to their lack of interest in studies but due to acute poverty conditions of their parents which forced them to leave the education and search for any available low paid job to keep him alive. 


When the government was not strict to enforce reservation in public sector undertakings, the employment of dalits and adivasis in public sector was also extremely low. It was only due to public pressure on the government that the reservation of dalits and adivasis was strictly enforced in the public sector. It is a well-known fact that it took years in the public sector to fulfill the backlog of jobs for the underprivileged strata. The bureaucracy was controlled by upper caste persons and there was even reluctance to enforce reservation of jobs in public sector. 


In the era of globalisation when downsizing of manpower became a key slogan in government services and public sector undertakings and VRS route became handy to the authorities several dalits and adivasi workers lost their jobs along with their caste brothers. With privatisation of public sector undertakings the job reservation was not binding on the new private owners. In these undertakings downsizing mostly affected the SC and ST workers. 


The ban on recruitment announced in government service and public undertakings has further hit the employment of dalits and adivasis in service when a person retired from service the vacancy was not filled in, which also affected the employment of SC and ST workers. Thousands of vacant posts remained unfilled which included posts held by SC/ST employees. The situation became more compounded by abolition of thousands of posts arbitrarily by the government. Abolition of government departments and closure of public sector undertakings have hit hard the employment of SC and ST workers in government services and public undertakings. 


Despite all these weaknesses, the reservation has provided some job opportunities for SC and ST persons which was not available earlier. 


Now, consequent to the growing awareness among the dalits and adivasis and their pressure on the government highlighted the question of reservation in the private sector. UPA government had to take note of this development which resulted in inclusion of this aspect in the NCMP. 


Confederation of Indian Industry (CII) and Associated Chamber of Commerce (ASSOCHAM), the representative organisations of big business houses in the country, formed a “Task Force” under the chairmanship of J J Irani, a retired executive of Tata House, to find out ways and means of avoiding legislation on this question. The Task Force drafted a memorandum on “Proposed Concrete Steps by Indian Industry on Affirmative Action for Scheduled Castes and Scheduled Tribes,” which was submitted to the prime minister, Dr Manmohan Singh.


Organised private sector employs only 80 lakh workers according to available data which works out to only 2 per cent of the workforce in the country. About 92 per cent of the workforce today is in the unorganised sector. CII-Assocham memorandum notes, “Private sector industry does not take into account caste identities in employment. However, limited data available indicates that a significant number of scheduled castes and scheduled tribes are already in employment in private sector industry.”


If the number is significant then why the private sector is not stating how many SC/ST workers are employed by them. The debate about the reservation in private sector is going on for over two years but the Task Force could not ascertain how many regular employees are working in large manufacturing industry in the private sector. If they are already employing significant number of people then why are they afraid of reservation? The memorandum is totally silent to admit that during the last 15 years the regular employment in the private sector has been reduced. It also does not point out that whatever limited number of jobs are available to SC and STs in the private sector are mainly through contractors which are essentially low paid and irregular jobs.


The CII-Assocham memorandum is full of evasive verbiage, which does not guarantee more jobs to SC and ST workers in the private sector. For instance it argues, “Industry believes that a cohesive and integrated society in which all individuals have access to opportunities for personal growth, will foster inclusive development, propel economic growth and also enhance its competitiveness.” It further notes, “Inclusiveness would ultimately be achieved through universal access to quality education.”
The fact remains that despite nearly six decades have passed the private sector has done precious little for the SC/ST workers who are denied opportunity for quality education. The memorandum purposefully ignores the hard reality that the most downtrodden section of our society is denied elementary needs of human existence. So long as this situation continues we cannot expect any access to quality education for them. 


The private sector has taken keen interest in starting quality education through capitation fees or donation of lakhs of rupees where common people have no access. Getting admission for higher education is a preserve of richer strata of the society. How the SC and ST workers can have equal opportunity in such institutions as the memorandum notes?


Even when middle and lower level education is a luxury for the SC and ST workers or their children with this state of affairs, the private sector employers’ claim that they are already providing significant number of jobs to SC and ST persons cannot be taken seriously. 


The CII-Assocham memorandum in the preamble itself notes, “Industry believes that competitiveness of enterprise and economy is not negotiable and must be achieved and maintained through knowledge and competence in the rapidly developing Indian economy. To accelerate growth and competitiveness of the Indian economy institutions must have autonomy and flexibility in order to create and expand job opportunities for all sections of society.” The private sector wants to assert its right to hire any worker of their choice which is a non-negotiable aspect of the working of the undertaking. This includes their right to fire a worker who is found unsuitable for their profit-making venture. They refuse to accept any commitment to provide job opportunity to those whom they think unsuitable for their design. That is why in the name of flexibility they want employers to get freedom to engage any one of their choice. They want to deny the reality that the SC and ST persons are denied equal opportunity in a caste ridden society. The memorandum, therefore, nonchalantly argues, “Private sector industry is against any legislation that would compromise the sanctity of its non-negotiable freedom of choice of employment.”


The so-called affirmative action is only a device to avoid any legislation to ensure reservation in the private sector. It merely assures “more constructive role by industry for achieving inclusiveness.” But how this “more constructive role” will be implemented? The memorandum states that “the initiatives for concrete steps will be voluntary and self-regulated by companies and industry.”


We have already seen the impact of schemes such as Voluntary Disclosure of black money by the private sector. Loans borrowed from banks and not returned by the corporate sector have reached colossal level of Rs 1,30,000 crore, which have now respectfully being characterised as non-performing assets of the banking industry. Why no self-regulatory mechanism is being adopted by the private corporate sector to repay the loans when the assets of the same industrial house are swelling rapidly? Why the CII and Assocham is unable to work out a voluntary and self-regulatory mechanism for its members for payment of workers and employers’ contribution to the Provident Fund which has now crossed Rs 1,500 crores limit? Why the private corporate sector has not worked out a mechanism that they paid government taxes promptly and not to allow them to increase beyond 1 lakh crore! Therefore all talks of voluntary and self-regularly mechanism is meaningless for the private sector. The blatant violation of the labour laws and trade union rights even by those who are leading CII and Assocham is well known today. Under these circumstances only a gullible can believe that the private sector industry can voluntarily and through self-compliance can ensure more jobs for the SC/ST workers?


Again, the cat is out of the bag when the private sector memorandum categorically observes, “Competitiveness of companies will remain a primary consideration to align India and Indian industry to benchmarks of excellence in quality and productivity.” Shorn of verbiage, the CII and Assocham want to give a hint that if more jobs are provided to SC/ST employees it would affect the competitive capacity of the industry. The private sector capitalists do not want any social objective to come in the way of their greed for higher profits. Hence the trade unions in India cannot accept the claim of the private sector managements that they will take steps voluntarily to provide more jobs to the SC and ST persons. 


The CII-Assocham memorandum states, “Recognising that small scale industries have limited resources we appreciate that they may have a problem in implementing the concrete steps.” As a matter of fact according to the experience of the trade unions, there is more proportion of SC and ST workers in small and unorganised sector industry than the large manufacturing and service sector establishments. 


In the name of concrete steps the memorandum has only resorted to jugglery of words like “formulate a code of conduct” “set up individual council to promote”, “appoint an Ombudsman to oversee,” “adoption of concrete steps by its members,” “compile information on industry-wise progress,” “appropriate action in cases of deliberate non-compliance,” etc. All these nice words do not give any solace to SC and ST workers. Such pious talks are just comparable with electoral promises not meant for practical implementation. 


At the workplace, the memorandum promises: “Companies will strengthen their human resource systems for enhancing access and opportunities to applicants for Scheduled Castes and Scheduled Tribes with equal qualification and competence for employment.” It does not spell out how these opportunities for access can be created. It only talks of strengthening human resource systems” which conveys nothing except a verbal assurance. 


The memorandum talks at length about entrepreneurship development of SC and ST persons. It is only a diversionary tactic since no one has demanded reservation for entrepreneurs for SC and ST. CII-Assocham promise to develop 100 entrepreneurs in one year alone and maintain a database of entrepreneurs from among business owned and promoted by scheduled castes and scheduled tribes. 


Instead of guaranteeing provision of jobs to SC and ST workers, the memorandum only talks of making them employable through education programmes. It talks of helping establishment of coaching programmes in universities to lower drop out rate amongst students of SC/ST. It offers 100 scholarships for study in educational institutions such as IITs and IIMs. It also promises scholarship for SC and ST to study in overseas universities. The number will reach 50 in 5 years. It further assures of support to students from SC and ST in entrance examination for professional and technical courses. All these facilities are provided for managerial cadres only. There is no programme for ordinary workers. Moreover the provision of scholarships and assistance does not guarantee any job in undertakings. 


As if the verbal assurances are not enough the CII-Assocham further assures that they will “set up database of NGOs for coaching in universities and coaching centres for entrance examinations and facilitate industry-NGO partnership for this.” It further assumes to “work with government in identifying skills commensurate with industry needs in government programmes and courses.” Finally it agrees to “continue to associate with the government’s 500 ITI upgradation programme.” However, no assurance to give jobs to SC and ST workers. 


The “concrete steps” further promise that “Industry will partner with NGOs to increase the level of primary education in government and municipal schools” and “Industry will expand existing partnerships with NGOs for assistance to mid-day meals programme in districts with pronounced population of Scheduled Castes and Scheduled Tribes”. Thus the concrete steps are nothing but a mechanism to avoid giving jobs to SC and ST workers in private sector units. 


The trade unions have therefore rightly demanded that the government should bring in legislation to ensure reservation in the private sector undertakings taking into consideration the proportion of SC and STs in the state. Without such a statutory provision the organised private sector employers will not give any job opportunities to the SC and ST workers. The trade unions must unitedly strengthen the campaign.