Monday, 28 November, 2022
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Talk Point: A vibrant private sector key to empowering disadvantaged groups

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Nitish Kumar spoke in favour of 50 per cent job reservation in the private sector on the basis of caste, and called for a debate at the national level. In Bihar, he has introduced a caste-based quota in outsourced jobs, which has been called a ‘backdoor entry’ for private sector reservations. Uday Narayan Choudhary, a JD-U leader, has questioned the legality of private sector reservations.

Is Nitish Kumar’s proposal for caste-based quotas in the private sector a feasible idea?

Private sector reservations are a bad idea and step in the wrong direction. Only in India do our political elites seem to have a nostalgia for the failed socialist policies of the past. There’s a feudal mindset still at work, which we have yet to shake off.

One can debate the case for reservation in education and public sector employment; it has a certain rationale given historical patterns of inequity. However, it’s really dangerous to extend this to the private sector where growth and job creation are driven by private entrepreneurs reacting to the profit motive. Saddling the private sector with a social agenda is not a recipe for either of these to succeed. Please note that opposing private sector reservations does not mean one condones discrimination. All of the nation’s laws pertaining to anti-discrimination can and should apply to the private sector.

Here are other sharp perspectives on private sector reservation:

Chandra Bhan Prasad: Dalit entrepreneur and author
Anand Teltumbde: Writer, civil rights activist
Milind Kamble: Founder, Dalit Indian Chamber of Commerce & Industry
Cynthia Stephen: Social policy analyst on gender and caste issues

The lessons of 1991 are clear. It was getting rid of the licence-permit-quota raj and empowering entrepreneurs, which led to economic takeoff. But the existence of restrictions on employment through rigid labour laws means that Indian manufacturing is heavily capital intensive and does not employ enough workers. Saddling industry or the private sector more broadly with an additional social obligation would further constrain entrepreneurs already burdened with excessive regulation and bureaucracy.

The command control mindset encapsulated by the idea of private sector job reservation represents failed and outmoded thinking and exactly the wrong remedy.

If private sector reservations ever happen, it will be a recipe for not achieving our growth aspirations. Evidence from around the world shows that growth, poverty alleviation, and achievement of social objectives are best served by a vibrant private sector. In other words, the goal of empowering historically disadvantaged groups is best accomplished by unshackling the private sector not by government fiat.

Rupa Subramanya is the co-author of Indianomix


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