Caste-based reservation not the only way to bring inclusivity in India’s private sector.
Is there a way to think sensibly about affirmative action in the private sector? Sadly, there are two extreme camps on this issue: Those who deny the need for any affirmative action and those who want the caste-based reservations to be extended to the private sector. I have been trying to put forward a different, constructive proposal about this for quite some time, without much success. Two recent developments prompt me to try again.
The first development was a quiet meeting. The Indian Express reports that the Prime Minister’s Office organised a meeting on 22 September, the first such meeting by this government, to discuss affirmative action in the private sector. It is not hard to guess what prompted this government into initiating this discussion in the run-up to the 2019 elections. Clearly, the Modi government is on the defensive on its record vis-à-vis disadvantaged groups such as the scheduled castes, scheduled tribes and the OBCs. From the media reports, it seems that the meeting was a casual exercise in search of an election slogan rather than any serious exploration. Not that the UPA had done much better on this score: The earlier PMO had held seven meetings but achieved pretty little.
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I don’t expect much to come out of the latest exercise. But the fact that every government feels compelled to pay lip service to the idea of affirmative action in the private sector underlines the salience of the issue. While government jobs continue to be sought after, everyone can see that the organised private sector is the most happening place. Debates on equal opportunity would and should shift the focus to the share of the pie in the private sector. This debate cannot be postponed for long.
The second development was a public document. On 24 September, a report titled State of Working India 2018 was released by the Centre for Sustainable Employment of the Azim Premji University. Among other valuable data and insights, the report provides evidence of caste-based segregation and earning differentials in the job market. Simply put, it shows that workers from SC, ST and OBC background are concentrated in ‘lower’ and less paying industries, occupations and jobs, while upper caste workers were concentrated at the upper end of the job market. The report also cites earlier studies that found caste-based discrimination to be one of the reasons for under-representation of Dalits and Muslims in the corporate sector.
This report is not about affirmative action. The evidence presented is indicative and non-conclusive. But it confirms a commonsensical understanding: Job opportunities are far from being equally distributed. The accident of birth continues to be the most powerful factor that determines anyone’s life opportunities. Gender and parental income, education, rural/urban residence and caste-community shape life prospects. Needless to say, this is inherently unjust. Thus, there is a case for intervention, not only to make life more just but also to improve the quality of the societal talent pool.
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The real issue is: What do we mean by affirmative action in this context? What exactly should the government do to make private sector employment more inclusive? Sadly, in India, social justice has become synonymous with caste-based reservations. We need to break from this mould to think about affirmative action in the private sector. Its criterion need not be just caste. Its mechanism need not be reservations.
Here is my proposal. It should be made mandatory for every enterprise above a threshold (say 20 employees or more, to take the current cutoff) to report its diversity profile every year. This would involve reporting the gender, caste-category, religion and domicile of each employee. This could be converted into a diversity score, depending upon the disadvantage of each social group. For example, a Dalit woman employee from a village within the same district could fetch three points, while an upper caste man from the town gets nil. Each enterprise could be graded based on its average diversity score. The government could link high diversity score to some tax incentives or other forms of preferential treatment.
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The quest for social justice in the private sector could begin with a baby step like this one. Gradually, the government could make a certain diversity score the eligibility condition for state subsidies and for participation in government bids. Affirmative action in the private sector should be based on a fine-tuned system of incentives and disincentives rather than a punitive regime of inspector-raj or legally mandated quotas. This could be designed and monitored by a new institution like an equal opportunity commission. The legal framework for such an institution was suggested by a report submitted to the government of India in 2008. The report has gathered dust over the last decade (Full disclosure: I was on the committee that wrote the report).
Are Indian entrepreneurs willing to debate such a proposal? A proactive approach at this stage would allow a nuanced policy and gradual rollout. Or would they rather continue to hide behind convenient excuses to postpone their encounter with social reality? In that case, they run the risk of sudden, kneejerk policy imposition from above.
The author is the President of Swaraj India.