Should private companies be required to reserve jobs for disadvantaged castes?

The issue has become urgent as government jobs continue to shrink while private employers resist mandatory affirmative action.

Diminishing jobs in the public sector is one of the primary reasons behind the clamour for reservations in the private sector. In this image from 2013, job seekers attend a private sector job fair in Madurai, Tamil Nadu, in large numbers. | Photo Credit: JAMES S

In the run-up to the Maharashtra Assembly election on November 20, Leader of the Opposition Rahul Gandhi announced while addressing a press conference in Mumbai on November 18: “In the Lok Sabha, I said the Congress party and INDIA alliance will conduct caste census to ensure equitable participation. Caste census is the biggest issue before us, and we will get it done; it is our central pillar. We will also remove the 50 per cent cap on reservation.”

Gandhi’s comment is the latest in a series of hectic exchanges between the ruling BJP and the opposition parties on the subject of caste census and the removal of the 50 per cent cap on quotas—which forms the backdrop to a recent revival of the demand for reservation of jobs in the private sector. The demand goes back to 2004, when jobs were shrinking in the public sector and the private sector was emerging as the major employment provider. More than a decade had passed since the P.V. Narasimha Rao government’s liberalisation of the economy in 1991: following the opening-up, successive governments had actively pursued disinvestment of public sector enterprises. Not surprisingly, reservation was one of the chief planks on which the 2004 Lok Sabha election was fought.

In December 2003, just months before the Lok Sabha election, the then Prime Minister, Atal Bihari Vajpayee, while addressing a gathering of MPs belonging to the Scheduled Castes (SC) and Scheduled Tribes (ST), expressed his support for the demand of reservation in the private sector. “Today, an important issue has come up. If there is reservation in government jobs, why not in private jobs? An atmosphere has to be created for this,” he said.

Both the BJP, the ruling party in 2003, and the Congress, the principal opposition party, promised reservation before the 2004 election, which saw the Congress-led United Progressive Alliance (UPA) come to power under Manmohan Singh. The UPA government started a dialogue with industries to explore the idea of introducing reservations. A few months after becoming Prime Minister, Manmohan Singh said emphatically: “Nobody can avoid it [reservation] as it is going to be a national policy. Nobody can prevent an idea whose time has come.”

In 2006, the government set up a coordination committee on affirmative action for SC/STs in the private sector. The committee had representatives from business groups such as the Federation of Indian Chambers of Commerce and Industry (FICCI), the Associated Chambers of Commerce and Industry of India (ASSOCHAM), and the Confederation of Indian Industry (CII).

Industry representatives conveyed to the government that reservation was not a solution, that they were not in favour of a law making it mandatory for them to implement a reservation policy, and that it would be preferable if the private sector took voluntary action towards enhancing the recruitment of SC/STs candidates at all levels in their organisations.

In a document titled “Affirmative Action—Empowering Society for a Brighter Tomorrow” (2009), the CII said: “Indian industry had assured Prime Minister Dr Manmohan Singh that it would draw up a robust affirmative action plan and it is Indian industry’s contention that a beginning has been made to address a challenge which is very novel for industry and which addresses a blot on the Indian society which goes back several millennia. It would be counter-productive, in this context, for political expediency to revive the demand for job reservations in the private sector. For one, such a measure will not amount to many jobs on the ground.”

The industry associations (CII, FICCI, and ASSOCHAM) prepared a voluntary code of conduct for member companies centring on education, employability, and entrepreneurship to achieve inclusion. Nearly 15 years later, in the absence of adequate monitoring or accounting of the action taken by industry, the initiative seems to have lost its momentum.

When the voluntary code of conduct is not working

In July 2024, Chandrashekhar Azad, president of the Aazad Samaj Party (Kanshi Ram) and MP from Nagina, Uttar Pradesh, introduced a private member Bill in the Lok Sabha for reservation in the private sector for SC/STs and Other Backward Classes (OBCs). The Bill demanded that the government incentivise private sector enterprises to implement the quota while creating rules to ensure effective implementation of the proposed affirmative action. Meanwhile, the Committee on the Welfare of Scheduled Castes and Scheduled Tribes has listed reservation in the private sector in its annual agenda for discussion.

In July 2024, Chandrashekhar Azad introduced a private member Bill in the Lok Sabha for reservations in the private sector for SC/STs and OBCs. Here he holds up a copy of the Constitution while taking oath in the 18th Lok Sabha on June 25, 2024. | Photo Credit: ANI

According to Ashok Bharti, chairman of the National Confederation of Dalit Organisations (NACDOR), the momentum for the demand is all set to grow in the coming months. Dalit organisations plan to hold a regional meeting in Karnataka on December 3, followed by a national-level conclave in Delhi from February 6 to 8, 2025, where they will ask the government to enact a reservation law to ensure affirmative action by private industry.

“The private sector needs to be accommodative, inclusive, and transparent. They should come clean on how much of what they had promised in terms of affirmative action has been fulfilled and what is their plan going ahead. Most importantly, we want the government to move ahead on this issue,” said Bharti.

“It is clear that the voluntary code of conduct is not working. There has to be a monitoring of what the associations are doing. They need to meet the Prime Minister regularly in this regard. It happened during the UPA years. In the last 10 years, during Prime Minister Narendra Modi’s tenure, such meetings have taken place very rarely,” said Prof. Sukhdeo Thorat, an economist and educationist who has extensively researched the economic discrimination suffered by SC/STs in India.

Bharti said that the industries have not come out with facts and figures on what has been achieved by them in terms of affirmative action. A website called The Fair Job.com was launched in 2012 as a collaborative venture between NACDOR and the CII to boost employment and skill training of SC/ST applicants. “The website was shut down because of lack of enthusiasm on the part of the private sector,” Bharti said.

Diminishing jobs in the public sector is one of the primary reasons behind the clamour for reservation in the private sector. The Economic Survey for 2024-25, while laying great emphasis on the need to generate 60 lakh jobs over the next five years, puts the onus of job creation on the private sector. “Finally, jobs are created in the private sector.... In their fascination for AI and fear of erosion of competitiveness, businesses have to bear in mind their responsibility for employment generation and the consequent impact on social stability,” the survey said.

As per the Annual Report on Pay and Allowances brought out by the Department of Expenditure in the Ministry of Finance, there has been a steady decline in civilian jobs within the Central government over the years. The 2001 report puts the number of Central government employees across different groups at 34.2 lakh, while the number of sanctioned posts was 36.06 lakh. The corresponding figures in the 2023 report were 30.04 lakh and 39.6 lakh, respectively. The figures also point to the growing number of vacancies, which in 2023 was 9.5 lakh.

For Thorat, what justifies reservation is not the decreasing number of jobs in the public sector but what he describes as the inherent and historical discrimination when it comes to the recruitment of SC/ST candidates in the private sector. A study titled “The Legacy of Social Exclusion: A Correspondence Study of Job Discrimination in India” conducted by Thorat and Paul Attewell involved sending identical applications for the same job using Dalit, dominant-caste Hindu, and Muslim names. The findings, published in 2007, document a pattern of decision-making by private sector employers that repeatedly advantages applicants from Hindu dominant-caste backgrounds and disadvantages marginalised-caste and Muslim job applicants with the same qualifications.

Highlights

• The demand for reservation of jobs in the private sector goes back to 2004, when jobs were shrinking in the public sector and the private sector was emerging as the major employment provider.
• In July 2024, Chandrashekhar Azad, president of the Aazad Samaj Party (Kanshi Ram) and MP from Nagina, Uttar Pradesh, introduced a private member Bill in the Lok Sabha for reservation in the private sector for SC/STs and Other Backward Classes (OBCs).
• Now that the demand has been revived, the momentum for the demand is likely to grow in the coming months.

Points to ponder

In the political sphere, the issue continues to be centred around disinvestment and outsourcing of jobs to the private sector. “The Modi government has been relentlessly pushing for privatisation, and public sector units are being dismantled, which is a deliberate strategy to erode the gains that were made through the reservation policy,” said Rajesh Lilothia, chairman of the Congress’ Scheduled Castes Department. The BJP, in turn, accuses the Congress of not putting in place a safety net for SC/STs when it initiated economic reforms in the 1990s.

In its manifesto for the 2024 Lok Sabha election, the Congress said that it would establish a Diversity Commission to measure, monitor, and promote diversity in public and private employment and education. While the manifesto spoke of enacting a law to bring in reservation in private educational institutions, it was silent on the issue of quota in private sector jobs.

Supporters of the Indian Justice Party block peak-hour traffic on the busy Janpath crossing in Delhi in 2007 as they hold a rally demanding reservation in jobs in the private sector. | Photo Credit: Anu Pushkarna

Interestingly, the BJP is also being circumspect on the issue. A senior BJP leader belonging to the backward classes, who did not want to be named, said: “As of now, there is no discussion on the subject within the party.”

However, the Left parties and the outfits that draw their support from the marginalised sections and the OBCs have been vocal in their support for reservation. Javed Ali Khan, Rajya Sabha MP from the Samajwadi Party, which is an ally of the Congress, said: “The socialists have always demanded reservations in the private sector. It cannot be voluntary action on the part of the industries. It has to be legally binding.”

The BJP’s regional allies have also been supportive of the idea. Minister of State for Health and Family Welfare Anupriya Patel recently spoke in favour of reservation. Patel, who belongs to the Apna Dal (Soneylal), a party with an OBC support base in Uttar Pradesh, told reporters in August 2024: “Reservation is not followed in appointments done in fourth-class [Class 4] posts via outsourcing in the private sector. The people of deprived sections used to get fourth-class jobs. When recruitment on these posts is done through outsourcing, no reservation law is followed.”

The Dalit scholar Chandra Bhan Prasad has a different take on the issue. He feels that by focussing on the demand for quota, a situation is being created where the private sector is viewed as an adversary of SC/ST communities. “India Inc [the private sector] should make deliberate attempts to embrace Dalits at the managerial level. The idea should not be pushed down the throat of the private sector. It should not become a ‘private sector vs Dalits’ issue. Those persisting with the demand for quota for Dalits and tribals in the private sector should also raise the issue of why there is no Dalit principal in Delhi University or why the reserved posts for professors in Delhi University and Jawaharlal Nehru University are vacant,” Prasad said.