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Corporate India needs to be careful about the position it takes on the issue of reserving jobs for people from the depressed castes.
First, the Prime Minister did not talk of reservations when he addressed the annual meeting of the Confederation of Indian Industry. What he emphasised was affirmative action, done voluntarily by companies. The second reason why corporate leaders should be careful about the message they send out is that the reality of caste representation in the corporate sector may not be out of line with what the government would like.
For instance, 55 per cent of the workforce in Hindustan Lever comprises people from the categories that the government wants to favour: those from the scheduled castes, scheduled tribes (SC/ST) and other backward castes (OBC). Similarly, about 24 per cent of those employed by Bajaj Auto are from these categories.
Other companies which look at their HR records might find that they too employ more SC/ST/OBC employees than they realised. And since this has happened in an open job market, there has been no dilution of standards that would lead to a loss of productivity or competitiveness.
All companies will not find themselves in the same boat. Manufacturing companies like Lever and Bajaj will find it easier to hire from the depressed castes because they do not always need people on the shop floor or in support services to have a college education.
In contrast, the Wipro chairman Azim Premji’s position is understandable when he comes out in opposition to reservations, because the majority of his employees are engineers - and the education system does not throw up enough engineers from the depressed castes. Were the government to mandate job reservation in the private sector, Mr Premji may quite simply be unable to comply with the law.
As Surjit Bhalla wrote in these columns last Saturday, OBCs account for only 25.9 per cent of those finishing school, and 23.3 per cent of those finishing college - compared to their 52 per cent share of the population (if you accept the figures in the Mandal Commission report). If you were to further examine the numbers of people passing out with professional degrees in medicine, engineering or management, the OBC percentage will drop further.
In other words, even if reservations in the private sector were mandated, it would not work because the groundwork has not been laid through the education system - and the figures show that the starting point has to be schools. Indeed, this may be the reason why, although formal job reservations have existed for the government and state-owned enterprises for more than half a century, almost no government department or company has been able to fulfil its quota obligations - because suitably qualified candidates from the reserved categories do not exist.
So what should the corporate sector’s response be, to the pressure coming from the government?
First, it should collect information and present the picture as it is today; this may not be as skewed as many have assumed. If Lever and Bajaj (and presumably many others) can do what they have done, it should be possible for more manufacturing companies to do the same, voluntarily - and industry bodies like the CII should encourage such a process. If we do not object to South Africa’s drive to give its blacks a bigger role in its business and economy, or to the US package on affirmative action designed to help African-Americans, then India’s corporate sector too should be seen to be responding positively to the call for greater social equity.
The second message should be that change has to start with the education system, and expanding the role of the private sector in schooling would help achieve universal school education, the lack of which is today the heart of the problem.
Opposition to job reservation in the private sector should be only the third message. And in the context of the other two, it will make for a more nuanced and less hostile response on an issue that, let it be recognised, has the potential to gain political traction.
T N Ninan is the editor and publisher of Business Standard, one of India’s leading business newspapers. An award-winning journalist and a member of various boards and professional bodies, he is a familiar figure on Indian national television as a commentator on economic issues. His weekly column, devoted to analysis of the Indian economy and business environment, now appears on FT.com every Tuesday. Visit the Business Standard website at http://www.business-standard.com