The Hindu Business Line : Private sector reservation

Reservation in the private sector is a hot topic today. The Government could think of reservation in the farm sector, which is also private. There is an acute shortage of labour in many parts. Farmers will have no difficulty providing 50 per cent of the jobs under their control to any community. But will any one come forward for the back-breaking work at paltry wages? The experience of the Maharashtra EGS suggests otherwise. The Government would do well to move cautiously, says Sharad Joshi.

THE National Common Minimum Programme (CMP) of the United Progressive Alliance Government contains two specific promises that concern the labour supply for agriculture. One of the two matters came up before Parliament this week in the form of a Private Members' Resolution recommending that a system of reservations for the Scheduled Castes, the Scheduled Tribes and Other Backward Classes be introduced in the private sector as that obtains in the public sector.

The Private Members' Resolution could serve little purpose since the Government had already announced its intension to introduce reservation in the private sector. Private members' Bills often are tabled with the hope of leaving the Member's footprints on the sands of time for the posterity.

The principle of extending reservation to the private sector was enunciated two years ago at the Bhopal Conference chaired by Mr Digvijay Singh, the then Chief Minister of Madhya Pradesh. (In January 2002, the Madhya Pradesh government had organised a conference in Bhopal to discuss the problems faced by Dalits and released a document that demanded a reasonable share in the fruits of development for them. This was an attempt to mainstream Dalit concerns basically in MP which will have a spin-off effect throughout the country.)

Maharashtra also tried to implement private sector reservation, though there has been little positive response from the major players in the private sector. The State government is now trying to convince the leaders of the private sectors to come around and accept the inevitable.

The argument for extending the reservation to the private sector is that the private sector should also associate itself with the broad social objectives pursued by the Government. The social obligations of private companies are not fully discharged by the payment of taxes to the government.

In India, in many cases, the government provides not only the infrastructure but also finance and protection from foreign and domestic competition without which the private sector firms would not be able to survive, much less make profits. It, therefore, follows that they should join the government in furthering the cause of social equity and justice.

The private sector spokesmen have expressed serious apprehensions on the subject. They fear that, in the present era of globalisation and worldwide competition, they would not be able to survive if their personnel are not selected strictly on the basis of merit. When they pay taxes they discharge their obligations to society.

Further, most private sector companies do pursue social activities in accordance with their own inclinations and preferences. There is no obligation on their part to share all the social and ethical values of whichever government happens to be in power.

What is the experience of the implementation of reservations hitherto? Even the highest court of the land has observed that the advantages of reservations have gone almost exclusively to the `Creamy Layer' of the communities they were meant for.

The reservations have also benefited the political leadership of the beneficiary communities which have turned this into a major vote catching political instrument. In any case, hardly 50 per cent reservations have become effective. Why should the government not try and enforce full utilisation of the reservation quota under its own control before proceeding to rope in the private sector?

Yet another question arises: What is private sector? Apparently, a few major companies have already acquiesced in the proposal of reservations and the backward community leaders are overjoyed about it. But private sector is not all such big companies.

Agriculture too is private sector. Agriculturists in many parts of the country are facing an acute shortage of labour. They would have no difficulty in providing 50 per cent of the jobs under their control to any community that may wish its members to have. But none is forthcoming. Work here is back-breaking and the wages are paltry. That is not what would interest the champions of reservation. Through reservation, they seek to provide for their protégées cushy jobs with munificent salaries and perks.

On the other point of the National Common Minimum Programme, the UPA Government has assured to bring in a Bill any day. The Bill will provide assured employment, at least for hundred days, to, at least, one member of all families below poverty line (BPL).

To begin with, the Congress Manifesto for the Lok Sabha elections 2004 had promised minimum 100 days employment to at least one member of families both in rural and urban areas. This was watered down in the last Budget to cover only certain districts. It is expected to be further diluted before the Bill is presented and later when it is enacted.

The Employment Guarantee Scheme (EGS) in Maharashtra is the model for the proposed enactment. Those conversant with the experience in Maharashtra find it difficult to share the enthusiasm. The scheme has hardly produced any permanent assets except in the form of metalled roads.

When the scheme was extended to cover horticulture in family fields, the government admitted as much. The labourers prefer to go on the EGS work because, in most cases, there is little work to do and the wages are shared 50-50 between the babus and the workers. If there is any hard work, say, digging, the labourers often demand that machines be used for the purpose; they even offer to pay for the rent of such machines from their share of the wages.

That is not all. The possibility of getting paid from EGS kind of work makes the labour unwilling to go for normal fieldwork. The labour market for agriculture is thus severely affected. At least one improvement that can be made in the Maharashtra model of EGS is that those who apply for such work should be provided work only if they cannot be absorbed in the normal agricultural fieldwork.

The nationwide EGS will hurt the agricultural operations badly. Reservation can help improve the situation if agriculture is treated as a part of the private sector. But that is unlikely to happen. Farmers will get the wrong end of both the sticks. The Government proposes to do well by the Backward Classes and the unemployed poor. It may or it may not achieve the purpose. It seems more certain that it will end by hurting the most productive class in the economy — the farmers.

(The author, Founder, Shetkari Sanghatana, is a Rajya Sabha member. He can be contacted at sharad@mah.nic.in)

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