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CHAPTER-IV
RESERVATION
IN
EMPLOYMENT
IN
PRIVATE SECTOR:
A
CONSTITUTIONAL
JUSTIFICATION
CHAPTER-IV
RESERVATION IN EMPLOYMENT IN PRIVATE SECTOR : A
CONSTITUTIONAL JUSTIFICATION

Introduction
In the Indian economy, both the public sector and private sector have
an important placing. Both operate in almost all the sectors of the economy,
although their relative positions differ widely in different sectors.
The private sector in India includes not only the organized industrial
sector but also agriculture, small industry, trade and a great deal of activity in
housing and construction and other fields. A substantial share of the
agricultural sector, which contributes a little over one-third of our national
income and engages three-fourths of our manpower, is in private hands. The
statistics relating to the macro-aggregates makes it clear that the private sector
accounts for more than 90 per cent of the total manpower employed and about
80 per cent of the net domestic product. Thus, economic activity in the sector
is motivated primarily by profit.
Regarding reservation in Private Sector, there is a story about Shahu
Maharaj, the anti-caste non-Brahman ruler of the state of Kolhapur in the early
decades of the 20th century. The Maharajah helped one Gangaram Kamble, a
Mahar, to set up a teashop, and then after returning from hunting with his
sardars, he began the habit of stopping at the shop, and not only taking tea
himself, but forcing all'his proud high-caste Maratha companions to take tea
from the hands of a Dalit. The Maharaja’s actions symbolize the various types
of programmes of “social justice” needed to overcome the heritage of the caste
system. For it is necessary, metaphorically, for Dalits not only to have the
right to drink tea wherever they want, but also to have employment in the tea
shops, and even more important, to have the capacity to own them and freely
do business with them! And for this, state intervention is necessary.1

Gail Omvedt, “Reservation in the corporate Section,” p. 1.


177

Unfortunately, social justice or “compensatory discrimination”


programmes in India have gotten stereotyped around the theme of
“reservation” in the public sector. And so much of a complex has been built
up around the subject that there are major assumptions, which everyone takes
for granted, but which are mistaken and need to be overcome. Among these
two are important: first, that social justice programmes are more or less
equivalent to reservation and that reservation is limited to employment in the
public sector as well as seats in educational institutions. Second, even more
debilitating, is the pervasive idea that reservation is in some way at odds with
“merit”, that we have to give up on or “relax” certain standards of merit in
order to do social justice for Scheduled Castes, Scheduled Tribes and Other
Backward Castes.
Today, as privatization is frightening Government employees, Dalits
are also worried about loss of the one area they have seen as a haven for
employment. One result is that the idea of “reservation in the private sector”
has been brought forward by a number of Dalit political leaders. There has
been some limited discussion of this, and the former Prime Minister, Mr. Atal
Behari Vajpayee, has given an initial very negative response to the idea.
However, the issue of reservation in the corporate sector does not depend on
the degree of disinvestment. Regardless of whether existing public sector
companies are “privatized” or not, it is still true that the corporate sector is a
growing and dynamic sector in India, and the question of who runs it and is
employed in it is a crucial one.
With Quotas declared for Jats in Rajasthan and with controversy about
some recent Supreme Court decisions, the issue of reservation has again come
to the forefront. Probably, thought, nothing is as controversial as the whole
question of private sector reservation. Here, on the one hand many Dalit
leaders have been led to oppose “liberalization and privatization” in the belief
that the public sector is their main road to economic and political
empowerment. And, on the other, those who recognize change as inevitable
are now demanding, as Maharashtra’s RPI leader and MP, Ramdas Athavale,
178

recently did at a large rally, “reservation in the private sector”. The issue,
however, is not a simple one.
There are, in fact, four rather different ways that oppressed communities -
such as black (African-Americans) in the. U.S. and Dalits in India - have
organized against the exploitation they have endured for centuries. One is as
political communities demanding “compensatory discrimination” programmes
from the State which in this respect is taken as representing the “whole
people”. (Reservation in India, “affirmative action” programmes in the U.S.
and special subsidies and grants in both countries are the important examples).
The second is as political communities, mobilizing to achieve political power
directly through the force of their votes and the alliances the are able to make.
(The BSP in India and the large number of black large city mayors in the U.S.
provide noteworthy examples). The third is as cultural communities seeking
to confront and change the internalized “cultural” characteristics that result
from their centuries of oppression but hamper their movement forward in the
present. (The best example here was the “million man march” organized
some ears ago in Washington D.C. by the black Muslim leader, Mr. Lousi
Farakhan, which was aimed at restoring the dignity and the family and
community position of black men). And the fourth is as economic
communities exerting pressure on companies or institutions, both to employ
more of their community and to produce the kind of products suitable to their
needs.
The question of “reservation in the private sector” has to do not only
with the first method - pressure on Central Governments - but also with the
fourth method - direct economic pressure on corporations and institutions.
This has to be understood in order for the whole issue to be seriously debated.
While some believe that “reservation in the private sector is impossible”, this
is simply wrong. Most “affirmative action” programmes in the U.S. in fact
work in the private sector. One basic reason is that there is no simplified
division between public and private. Any sector that is regulated and/ or

2 Gail Omvedt, “Reservation in the private sector”, p. 2.


179

funded by the Government is open to Government directives. In the U.S., to


take a specific example, colleges and universities are all by Indian standard
“private” since they are not directly controlled by the Government; they raise
their own budgets, charge, student fees, make their own decisions, appoint
their own teachers, and so on. Yet, because they get some Government aid
and are subject to Government regulation, “affirmative action” programmes
can operate: if they do not fulfil the criteria, the Government aid will be
withdrawn.
This, however, takes place in a much more flexible and less rigid
situation than in India. There would be no question, for example, of automatic
promotion for holders of reserved posts in the U.S. - there are no specific
posts earmarked for minorities, and there is no such thing as automatic
promotion.
Instead, “affirmative action” means that a certain proportion of black
(or other minority) people are supposed to be there. Since people who have
grown up with the Indian system find it hard to believe that such a system can
work, it might be suggested here that the American Government fund some
specific studies by a combined Indian-American team of largely Dalits and
blacks, to genuinely compare reservation systems. What comparative work
has been done so far has been either by American scholars or upper-caste
Indian scholars.
The second factor is that the growth of minority (in this case Dalit or black)
representation in private sector institutions can be compelled not simply by
Government action but by direct economic or political pressure. Some
examples easily come to mind. Why does the U.S. Supreme Court now have
black judges? Not because it has “reserved posts” of any kind, but simply
because the President has found it politically necessary or expedient to appoint
at least some minorities. This is political pressure similar to that which
produces Ministries in India through an informal “quota system” that has to
accommodate not only representatives of all political parties and of all regions
or States, but also of different castes and communities.
180

Concept of Private Sector


In the Indian economy, both the public sector and the private sector
have an important placing. Both operate in almost all the sectors of the
economy, although their relative positions differ widely in different sectors.
We began the subject by describing the distinguishing features of the
two sectors, public and private, as also their standing in the economy as a
whole. This will give us a perspective for discussing the two sectors
separately.
Public sector. The areas falling within the public sector are many, although
there is some reduction in those of industries under the impact of the new
industrial policy in operation since the middle of 1991. Among the many
activities of the public sector the important ones are: banking, life and general
insurance, railways, road transport, air services, shipping etc. Besides, there
are large government trading agencies like the state trading corporation etc. In
the field of industry, the public sector, till very recently has been a strong
sector, and qualitatively superior to the private sector. However, as per the
new policy, its activities have been confined to certain select, though
important, areas. These are : infrastructure (like transport, communication,
power etc.);. exploration and exploitation of oil and mineral resources;
technology development and building of manufacturing capabilities in areas
which are crucial in the long-term development of the economy, and where
private sector investment is inadequate; and manufacture of products where
strategic considerations predominate such as defence equipment.3
Private Sector. The private sector in India includes not only the organized
industrial sector but also agriculture, small industry, trade and a great deal of
activity in housing and construction and other fields. A substantial share of
the agricultural sector, which contributes a little over one-third of our national
income and engages three-fourths of our manpower, is in private hands. The
statistics relating to the macro-aggregates makes it clear that the private sector
accounts for more than 90 per cent of the total manpower employed and about

3 “Indian Economy, Problem of Development and Planning; A.N. Agarwal, at p. 387.


181

80 per cent of the net domestic product. Thus, economic activity in the sector
is motivated primarily by profit.
Privatization : One set of measures are meant to inject a strong dose of
impulses associated with the private sector. Towards this end nine industries,
out of the seventeen reserved for the public sector, have been earmarked for
the private sector. These include such important industries as aircraft
manufacture, air transport, ship-building, processing of non-ferrous metals,
iron and steel, generation and distribution of electricity, telephones and
telephone cables, telegraph and wireless apparatus, heavy castings and for
goings of iron and steel, heavy plants and machinery required for iron and
steel production, and for mining, and heavy electrical plant including large
hydraulic and steel turbines. Besides the government has, through, a part
disinvestment of its capital in some industries, made the private sector co­
owner of these industries. Further, as laid down in the new industrial policy
the government is to shed off a number of such industries as are sick, cater to
the production of consumer goods, belong to non-strategic areas, where the
private sector has developed sufficient expertise and resources etc.4
While much of the public sector will be privatized, its own field of
operations will be drastically curtailed. The areas for the public sector will
now consist of the following: essential infrastructure goods and services;
exploration and exploitation of oil and mineral resources; technology
development and building of manufacturing capabilities in areas which are
crucial in the long-term development of the economy and where private
sector investment is inadequate, manufacture of products where strategic
considerations predominate such as defence equipment. Thus the thrust of the
policy is to permit the private sector to own and/ or manage a greater part of
the industries so far run exclusively by the government. It has the same time
restricted its area of operations to those industries which on social and
strategic grounds must remain in the government sector.

“Indian Economy, Problems of Development and Planning,” A.N. Agarwal, at p.


392.
182

Relation between public and private sector : The rapid expansion of the
economy, has opened new opportunities for growth both for the public and
private sectors. The Second Plan had pointed out that the two sectors have to
function in unison and are to be viewed as parts of a single mechanism. This
implies simultaneous and balanced development of the two sectors. The
impact of public investment on the overall pace of expansion is profound. In
principle, the public sector competes for savings with the private sector. In
practice, however the modalities for finding investments are so different in the
two sectors that such a competition for savings is manifest in only a limited
way. In fact, a high level of public investment in infrastructure and key
industries is a pre-condition for development in the private sector. Moreover,
many private enterprises depend on the orders which flow from public activity
and their growth and profitability is directly linked to the expansion in public
sector investment.
Government policy for expansion of Private Sector : The new economic
policy (1991), incorporating changes in trade, industry, finance and fiscal
affairs, aims at the expansion of the private sector, injection of a strong dose
of competition and globalization of the economy. These together amount to a
big market-orientation of the Indian economy.
One important aspect of the new government economic policy is to
enlarge the sphere of the private sector in a big way. In the field of industries,
it has been brought about by the following measures: One is by reducing the
number of industries reserved for the public sector. Since 1956, under the Old
Industrial Policy, 17 industries have been reserved for investment by the
public sector. Private sector was, however, permitted to invest in these
industries on a selective basis. Under the new Industrial Policy, in operation
since the middle of 1991, only 8 (6 since March 1993) industries will, continue
to be reserved. Many of the now deserved industries are core industries like
iron and steel, electricity, air transport, ship-building, heavy machinery
industries such as heavy electrical plants and telecommunication cables and
instruments. Industries which continue to be reserved for the public sector are
183

in areas where security and strategic concerns predominate. The focus in the
public sector will henceforth be on strategic, hi-technology and essential
infrastructure areas.
Two, the government has also decided that it will undertake a review
of the existing portfolio of public investments, particularly in respect of
industries based on low technology, small scale and non-strategic areas,
inefficient and unproductive areas, areas with low or no social significance or
public purpose and areas where the private sector has developed sufficient
expertise and resources. This review obviously is intended to transfer these
industries to the private sector. In pursuance of the aim of expanding the
private sector, the government has also decided to offer a part of Government
shareholding in the public sector enterprises to mutual funds, financial
institutions, the general public and workers. The beginning was made by
diverting a part of the equities of selected enterprises and placing them with
mutual funds.
Definition of State (Article 12)
Article 12 defines the term “State” for the purposes of the
fundamental rights. Article 12 provides that unless the context otherwise
requires, “the State includes the Government and Parliament of India and the
Government and the Legislature of each of the State and all local or other
authorities within the territory of India or under the control of the Government
of India”. Article 12 gives an inclusive and not exhaustive definition of “the
State”. So defined “the State” includes5
(a) the Government and Parliament of India;
(b) the Government and the Legislature of each of the States;
(c) all local or other authorities within the territory of India; and
(d) all local or other authorities under the control of the Government of
India.

Masthan Sahib v. Chief Commissioner, AIR 1963 SC 533; Ramamnrthy v. Chief


Commissioner, AIR 1963 SC 1464.
184

The first two categories include the Executive and the Legislative
organs of the Union and the State. The term ‘Government’ stands to include a
Department of the Government or any institution under the control of a
Department of the Government e.g., the Income-Tax Department6 or the
Forest Research Institute, Dehra Dun.7 The President of India, while acting in
his official capacity must be included in the term Government and be regarded
as “the State” for the purposes of Part III.8 These two categories are self-
explanatory and have not evoked any difficulty.
The question as to the interpretation of the expression “other
authorities”, was considered in detail by the Supreme Court in Rajasthan State
Electricity Board v. Mohan Lai.9
The Board was constituted under the Electricity Supply Act, 1948, as a
body corporate, by transferring the State electrical and Mechanical
Department to the Board. The Supreme Court referred to the definition of the
term "State ” in Article 12 and held that the Rajasthan State Electricity Board
was clearly an authority to which the provisions of Part III of the Constitution
were applicable. The Court observed that the expression “other authorities”
in Article 12, was wide enough to include within it every authority created by
a Statute and functioning within the territory of India or under the control of
the Government of India, and there was no reason to narrow down this
meaning in the context in which the words “other authorities” were used in
Article 12.
Rejecting the application of the principle of ejusdem generic in
interpreting the expression “other authorities” in Article 12, the Court held
that there was no common genus running through the specifically named
bodies (i.e. the executive Governments of the Union and the States, the
Legislatures of the Union and the States and local authorities), nor could those

6 Bidi Supply Co. v. Union ofIndia, AIR 1956 SC 479.


7 Purshottam Lai v. Union ofIndia, AIR 1973 SC 1088.
8 Gurmukh Singh v. Union of India, AIR 1952 Punjab 143; Haroobhai v. State of
Gujarat, AIR 1967 Gujarat 229.
9 AIR 1967 SC 1857. See also Housing Board Haryana v. Its Employees Union, AIR
1996 SC 434; Ujjambai v. State ofU.P., AIR 1962 SC 1621.
185

bodies be placed in the single category on any rational basis. The Court, thus,
held that the expression “other authorities” in Article 12 would include all
constitutional or statutory authorities on whom powers were conferred by
law ”,
The majority further opined that it was not necessary that the statutory
authority to be included in the term ‘State5 under Article 12, should be
engaged in performing governmental or sovereign functions. It would be
immaterial that the statutory authority was conferred with powers for the
purpose of carrying on commercial activities. Thus, a statutory authority
having some commercial functions, would also be an authority under Article
12.10
The next significant pronouncement of the Court in regard to the
interpretation of the expression “other authorities” was in Sukhdev Singh v.
Bhagatram.11 In this case the Supreme Court, by a majority of 4 : 1, held that
the Oil and Natural Gas Commission, the Life Insurance Corporation and the
Industrial Finance Corporation were authorities within the meaning of the
10
expression “other authorities” and hence “State” under Article 12.
The question relating to the scope of the phrase “other authorities in ”

Article 12, was considered more thoroughly in Raman Dayaram She tty v.
International Airport Authority.13 The International airport Authority (IAA),
a body corporate, was constituted under International Airport Authority Act,
1971. The Chairman and members of the IAA are nominated by the Central
Government who is vested with power to terminate their appointment or to
remove them in specified circumstances. The Central Government is also
vested with power to take away the management of any airport from the IAA
and to entrust it to any other person or authority. It can give binding
directions in writing to the IAA on questions of policy. The capital needed for

Rajasthan State Electricity Board v. Mohan Lai, AIR 1967 SC 1857.


AIR 1975 SC 1331.
The Court reiterated with approval the decision in Rajasthan State Electricity Board
v. Mohan Lai, AIR 1967 SC 1857. See also L.f.C. ofIndia v. Escorts, AIR 1986 SC
1370.
13
AIR 1979 SC 1628.
186

carrying out its functions by the IAA is wholly provided by the Central
Government. The IAA is to manage the administration of the airports and air
navigation services which were earlier performed by the Central Government.
The IAA is vested with power to frame regulations and to provide that
contravention of certain specified regulations shall entail penal consequences.
The Court reiterated with approval the approach of Justice Mathew in
Sukhdev Singh v. Bhagatram.14 The learned Judge had held that if a body or
authority was found to be an agency or instrumentality of the Government, it
might be included in the term ‘State’ under Article 12, falling under the
expression “other authorities”. In R.D. Shetty v. I.A. Authority}5 The Court
discussed in detail various relevant factors and developed the general
propositions for determining whether an authority was an instrumentality or
agency of the Government.
Referring to the relevant provisions of the International Airport
Authority Act, 1971 whereunder the said authority was constituted, the Court,
held that the tests discussed for the determination, were satisfied by the
respondent Authority and thus observed that the International Airport
Authority was an instrumentality or agency of the Central Government and
fell within the definition of “State” under Article 12 and therefore, subjected
to the prohibitions contained in Part III of the Constitution.
The propositions developed in R.D. Shetty v. International Airport
Authority}6 Case were followed in Som Prakash Rekhi v. Union of India}1
And were culled out in the form of test to determine as to when a
corporation could be said to be an instrumentality or agency of the
Government.
In Som Prakash Rekhi v. Union of India,18 the facts briefly were that
the petitioner Som Prakash, was employed as a clerk in the Burmah Shell Oil

14 AIR 1979 SC 1331, 1351.


15 AIR 1979 SC 1628.
16 AIR 1979 SC 1628.
17 AIR 1981 SC 212. See also Air India Statutory Corpn. v. United Labour Union, AIR
1997 SC 645.
18 AIR 1981 SC 212.
187

Storage Limited and retired after qualifying for a pension in 1973. The
undertaking of the Burmah Shell was taken over under the Bu'rmah Shell
(Acquisition of Undertakings in India) Act, 1976 and was vested in the Bharat
Petroleum Corporation Limited, which became the statutory successor of the
petitioner’s employer. His pensionary rights, such as he had, therefore,,
became payable from the Corporation.
The Supreme Court held that the Bharat Petroleum Corporation,
though a Government Company registered under the Companies Act, by virtue
of the various provisions of the Burmah Shell (Acquisition of Undertakings in
India) Act, 1976, was transformed into an instrumentality of the Central
Government with a strong statutory flavour super added and clear indicia of
power to make it an “authority" falling under the expression State in Article
12.
In Som Prakash v. Union of India,19 it was held that the expression
“other authorities” in Article 12, would include not only a statutory body but
also a non-statutory body like a government company if it was found that the
body or authority was an agency or instrumentality of the Government.
The question regarding the status of a non-statutory body came
before the Supreme Court in Ajay Hasia v. Khalid Mujib. In this case, the
question was whether the Regional Engineering College, Srinagar, sponsored
by the Government of India, established, administered and managed by a
Society, registered under the Jammu and Kashmir Registration of Societies
Act, 1898, was included within the term “State” under Article 12. The Society
is empowered to conduct its affairs by rules framed by it with the approval of
the Government of Jammu and Kashmir and the Central Government. The
money for running the College is provided by the State and Central
Governments. The State Government with the approval of the Central
Government, is empowered to take such action and to issue such directions, in
matters relating to the working of the College. In case of mismanagement of

AIR 1981 SC 212.


AIR 1981 SC 487.
188

the affairs, the State Government is empowered with the prior approval of the
Central Government to take over the administration and assets of the College.
The general superintendence, direction and control of the affairs of the society
and its income and property is vested in the Board of Governors. The Board
consists, inter alia, of the Chief Minister of the State as its Chairman and
nominees of the Central and State Governments, the All India Council of
technical Education, the Indian Institute of Technology in the region, the
University Grants Commission, the Faculty of the College, the Vice-
Chancellor of the Jammu and Kashmir University and the Principal of the
College as is ex-officio Member-Secretary. Admissions to the College are
made, by a Committee constituted by the Board, on the basis of comparative
merit to be determined by holding a written entrance test for 100 marks and a
viva voce examination for 50 marks.
Bhagwati, J., speaking for the Court, reiterated with approval the
propositions and tests evolved in R.D. Shetty v. International Airport
Authority case.
The Court took a step more forward and observed that the concept of
instrumentality or agency of the government was not limited to a Corporation
created by a Statute but was equally applicable to a company or society and in
each case it would have to be decided on the consideration of the relevant
99
factors.
In the light of the above enunciation and also applying the tests
propounded in the International Airport Authority case, the Court held that
the Society running the Regional Engineering College, Srinagar, was an
instrumentality or agency of the Government and an authority within the
meaning ofArticle 12.
In Steel Authority of India Ltd. v. Shri Ambica Mills Ltd.23 The
Supreme Court ruled that the SAIL, a company fully owned by the Union of

AIR 1979 SC 1628.


See also Mysore Paper Mills Ltd. v. Mysore Paper Mills Officers Association, AIR
2002 SC 609.
23
AIR 1998 SC 418.
189

India and incorporated under the Companies Act. 1956. had its own identity
and could not be held to be a department of the Union of India. It thus
followed that SAIL, an agency or instrumentality of the Union of India, would
be “State” only within the meaning of Article 12.
A Regional Rural Bank is constituted by the Central Government
under the Regional Rural Banks Act, 1976. The share capital of the bank is
subscribed by the sponsor Bank. The Act vests effective control in the Central
Government as regards the functioning of the Regional Rural Bank. The Bank
has, therefore, been held to be the instrumentality of the Government and
therefore “State” within the meaning of Article 12.2A
Applying the tests, enumerated in Ajay Hasia’s25 case, it has been
held that a Cooperative Bank constituted and registered as a Society under
the State Cooperative Societies Act, is not an instrumentality or agency of the
State. Thus the Punjab State Co-operative Bank,26 the Ludhiana Central Co­
operative Bank,27 the Punjab State Co-operative Land Mortgage Bank2S have
not been held to be “State” within the meaning of the expression “other
authorities'” under Article 12.
A Co-operative Society is nothing but a body created in accordance
with and governed by the provisions of the Co-operative Societies Act.
Certain number of persons form a society with certain aims and objects. The
Society requires registration in accordance with the provisions of the Act.
After having been so registered, it is subjected to certain rules, regulations and
directions framed and issued under the provisions of the Act. Such a society
is not created by the provisions of the Act itself, nor the State exercises any
control over such a society. None of the tests laid down in Ajay Hasia v.

Chairman Prathama Bank, Moradabad v. Vijay Kumar, AIR 1989 SC 1977. See
also U.P. State Co-operative Land Development bank Ltd. v. Candra Bhan Dubey,
AIR 1999 SC 753; M.K. Agarwal v. Gurgaon Gramin Bank, AIR 1988 SC 286.
Ajay Hasia v. KhalidMujib, AIR 1981 SC 487.
Satish Kumar v. Punjab State Co-Optt. Bank Ltd., AIR 1981 P & H 282.
Ibid.
Pritam Singh v. State of Punjab, AIR 1982 P & H 228, Ajay Hasia v. Khalid Mujib,
AIR 1981 SC 487, relied on. See also Jagdish Chander Gupta v. The J. & K. Bank
Ltd., AIR 1986 J. & K 1.
190

Khalid Mujib,29 is satisfied in the case of such a society. It is, therefore, held
in

not to be an “authority” within the expression “State" under Article 12.


However, it would depend on the facts of each case.
In Mohinder Singh v. Union of India,31 the society controlling and
administering the Lawrence School, Sanawar {Simla Hills) was held to be an
authority within the meaning of Article 12 of the Constitution. The
management of the society was entrusted to the Board of Governors
consisting, among others, the representatives of the Government fro the
Ministry of education, Finance and Defence and four other members
nominated by the Government of India.
In All India Sainik Schools Employees Association v. The Defence
Minsiter-cum Chairman, Board of Governors, Sainik School Society, New
Delhi, the Sainik School Society, registered under the Societies Registration
Act, I860, applying the tests culled in Ajay fiasia v. Khalid Mujib33 was held
to be “State” within the meaning of Article 12 of the Constitution.
The tests enunciated by the Supreme Court to find out whether an
entity is a “State” or not, are, thus not conclusive or clinching and will have to
be used with care and caution in view of the factors pertaining to each
particular case.34
Following the decision in Rajasthan Electricity Board v. Mohan Lai35
according to which the expression “other authorities” in Article 12 would
cover all constitutional or statutory authorities on whom powers were

AIR 1981 SC 487.


Narendra Pal Singh v. M.P. Dugdh Mahasangh Sahakari Marqyadit, Bhopal, AIR
1994 NOC 12 (MP); Smt. Bharathi v. Registrar, Coopt Societies, Bangalore, AIR
1990 Kant 173.
AIR 1969 Delhi 171.
AIR 1989 SC 887.
AIR 1981 SC 487.
Ajay Hasia v. Khalid Mujib, AIR 1981 SC 487; R.D. Shetty v. The International
Airport Authority, AIR 1979 SC 1628.
35
AIR 1967 SC 1857.
191

conferred by law, Universities have been held to be included within the term
“State” for the purposes of Part III of the Constitution.36
As regards a private educational institution, the position appears to
be that it would be covered by the expression “other authority” only if it is
found to be an agency or instrumentality of the State in accordance with the
propositions enunciated in Ajay Haisa case.37
In N.K. Ramiah v. Yadava Kalvi Nithi Regd. Society,38 the Society
running Yadava College affiliated to the Madurai Kamaraj University, was
held not to be an authority under Article 12. The College was under the
control and supervision of the Director of Collegiate education and was
governed and regulated by the provisions of the Tamil Nadu Private College
(Regulation) Act, 197629
In Unni Krishnan v. State ofAndhra Pradesh,40 (Capitation Fee case),
the Supreme Court has recently, held that a private educational institution
either by recognition of affiliation to the University could not ever be called
an instrumentality of the State.41
However, a Medical College, though privately run, affiliated to the
Osmania University and receiving grants firm the public exchequer from the
State of Andhra Pradesh and having the representatives of the University and
State Government on its Managing Committee, has been held to be covered by
the expression “other authority” under Article 12 and amenable to the writ
jurisdiction.42

Umesh Chandra v. V.N. Singh, AIR 1968 pat 3; Gandhi Faiz-e-Am-Degree College
v. University ofAgra, AIR 1968 All 188.
Ajay Hasia v. Khalid Mujib, AIR 1981 SC 487.
AIR 1985 Madras 211. ;
See also Executive Committee of Vaish Degree College v. Lakshmi Narain, AIR
1976 SC 888; Parent Teacher Association, Maharaja's College v. State of Kerala,
AIR 1995 Ker 209.
AIR 1993 SC 2178.
See also J. Tiwari v. Jawala Devi Vidya Mandir, AIR 1981 SC 122; N. Kanakadurga
Devi v. Kakatiya Medical College, AIR 1972 AP 83.
Harijander Singh v. Kakatiya Medical College, AIR 1975 AP 35. Seel also Dinesh
Kumar v. Motilal Nehru Medical College, Allahabad, AIR 1985 SC 1415.
192

In Dinesh Kumar v. Motilal Nehru Medical College, Allahabad,43 it


was held that Medical Colleges run by a municipal Corporation or by the State
Government, which did not constitute legally separate entities, would be
covered by the expression “other authority” within the meaning of Article 12.
In Manmdhan Singh Jaitla v. Commissioner, Union Territory,
Chandigarh?* the Guru Nanak Khalsa High School, Chandigarh, an aided
School, receiving 95% of expenses by way of grant from the public exchequer
and whose employees received the statutory protection under the Punjab
Aided Schools {Security of Service) Act, 1969, was held to be “other
authority” within Article 12 and included in the term 4State ’ for the purposes
of Fundamental Rights. The School was subjected to the regulations made by
the Education Department of the Union Territory, Chandigarh and also the
appointment of the Headmaster of the School, to be valid, was required to be
approved by the Director of Public Instructions.
Other authorities NOT INCLUDED in the term “State” for the purposes
of Part III of the Constitution-
The following authorities have been held to be not included in the term
uState” for the purposes of Part III of the Constitution:-
The Praga Tools Corporation,45 registered under the Companies Act,
1956, a Government Company in which 56% share capital owned by the
Central Government, 32% owned by the Government of Andhra Pradesh and
12% share capital is owned by public.
The Bihar State Small Industries Corporation?6 incorporated under
the Companies Act, 1956, in which cent per cent shares are owned by the State
of Bihar.

AIR 1985 SC 1415. Also See Mcmju v. State, AIR 1972 HP 37.
AIR 1985 SC 364.
Praga Tools Corporation v. C. V. Manual, AIR 1969 SC 1306.
R.D. Singh v. Secretary, Bihar State Small Industries Corporation, AIR 1974 SC
212. .
193

The Institute of Engineers41 a body incorporated under the Royal


Charter, 1935 containing a grant by the Crown of the United Kingdom, in the
form of Letter Patent under the King’s Sign Manual dated September 9, 1935.
The National Academy ofArts 48
The Bengal Chamber of Commerce,49 an autonomous body functioning
under a license, under Section 25 of the Companies Act, 1956.
The J & K Industries Pvt. Ltd.,50 a company created under Order
issued in the name of the Head of the State Government, granting sanction to
the formation of the Company under the J & K Companies Act, 1977 and
approving the Articles and Memorandum of Association of the company and
directing its registration under the Companies Act.
The Chemical and Allied Products, Export Promotion Councilf a
Company limited by guarantee, incorporated under the Companies Act, 1956.
The West Bengal Small Industries Corporation Ltd., a Government
Company registered under the Companies Act, 1956.
The Indian Rare Earths Ltd.,55 a Government Company in which all
the shares are held by the Government.
The Nagarjuna Fertilizers and Chemicals Ltd.,54 a public Limited
Company registered under the Companies Act, 1956, receiving financial
assistance from Financial Corporation or other financial agencies, control
vested by the Companies Act, in Government, Company Law Board and
Registrar of Companies.

Ashwani Kumar v. Institute ofEngineers (India), AIR 1986 Ail 251; Saikat Ghosh v.
Institute ofEngineers, AIR 1996 Cal. 47.
Swapan Kumar Dass v. Secretary, Lalit Kala Academy, AIR 1990 NOC 129 (Cal.).
In Re the M.L. Shaw and another, AIR 1984 Cal. 22.
Abdul Ahmad Loan v. Manager Govt. Woolen Mills, AIR 1979 J & K 57.
S.K. Mukherjee v. Chemicals and Allied Products, Export Promotion Council, AIR
1962 Cal. 10.
Kartick Chandra Nandi v. W.B. Small Industries Corporation Ltd., AIR 1967 Cal.
231.
B. Rajkumar Patras. Union of India, AIR 1981 Ori 143.
M/s Nav Bharat Corporation v. Nagarjuna Fertilizers and Chemicals Ltd., AIR 1990
NOC 160 (AP).
194

The National Insurance Company Ltd,55 incorporated way back in


1906, came within the ambit of a company registered under the Companies
Act, 1956, carried on the business of general insurance.
The M.P. Pradeshik Scouts and Guides, a society registered under the
Societies Registration Act, I860.56 The India Red Cross Society.57
CSIR is State : 19 April, 2002
In an important case58 the Supreme Court by 7 : 5 majority overruled
its old judgment delivered in 1975, and held that the Council of Scientific and
Industrial Research (CSIR) is a ‘state’ within the meaning of Art. 12 of the
Constitution and, therefore, its employees can approach the High Courts or the
Supreme Court to enforce their fundamental rights of equality. The majority
held that even though it was formed under the Registration of Societies Act,
1860, but it is a ‘state’ because the government had overriding control over the
organization. The object incorporated in Memorandum ofAssociation of CSIR
“manifestly demonstrates that CSIR was set up in the national interest to
further the economic welfare of the society by fostering planned development
in the country.” The Government of India has a dominant role in the
governing body of the CSIR. All the members of the governing body, except
ex-officio members, are nominated by the President and their membership can
also be terminated by him. The Prime Minister is the ex-officio President.
The governing body also has the powers to make rules, amend or repeal the
by-laws of CSIR but only with the sanction of Government of India.
However, Justice R.C. Lakotia and Justice Doraisawmi Raju gave a dissenting
judgment and held that CSIR is not a ‘State’ under Art. 12 of the Constitution.
In Pradeep Kumar Biswas v. Indian Institute of Chemical Biology59 a
seven judge Bench of the Supreme Court by a majority of 5:2 has overruled

M.L. Nohria v. General Insurance Corporation of India, AIR 1979 P & H 183.
Mradula Sharma v. State Chief Commissioner, M.P. Bharat Scouts & Guides, AIR
1995 M.P. 88.
Sarmukh Singh v. Indian Red Cross Society. AIR 1985 Lab 1C 1072.
The Hindustan Times April 19, 2002.
(2002)5 SCC (1).
195

the decision in Sabbajit Tewari case and held that CSIR is an instrumentality
of the State within the meaning of Art. 12 of the Constitution.
In G. Bassi Reddy v. International Crops Research Instt.60 It has been
held that the International Crop Research Institute is an international
organization and has been set up as non profit research and training centre to
help developing countries to alleviate rural poverty and hunger in various
ways is therefore, not a ‘State’ within the meaning of Article 12 of the
Constitution. Consequently no writ petition can be allowed by its employees
challenging their removal from service as being violative of Articles 14 and 16
of the Constitution. It is not set up by the Government and gives service to a
large number of countries voluntarily. It is not controlled by nor is
accountable to the Government. Likewise, in General Manager, Kisan
Sahkari Chini Mills Ltd., Sultanpur, U.P. v. Satrughan Nishad,61 it has been
held that the Co-operative Sugar Mill was neither instrumentality nor agency
of Government and therefore, not ‘State’ within the meaning of Art. 12 of the
Constitution. The Government of Uttar Pradesh held only 50% share in the
mill and the expenditure of mill was not met by the State but it operated on
basis of self generated finances. The nominees of State Government in the
committee of management of mill was only 1/3 and it was dominated by 2/3
non government members. Under its bye-laws State government could neither
issue any direction to mill nor determine its policy. The State has no deep and
pervasive control over mill.
In V.K. Srivastava v. U.P. Rajya Karmachari Kalyan Nigam,62 it has
been held that the U.P. Rajya Karmachari Kalyan Nigam is an agency and.
instrumentality of State and, therefore, is a State within the meaning of Art. 12
of the Constitution. The control of State on Corporation (Nigam) is not only
regulatory but deep and pervasive. It is formed with the object of catering to
needs of Government employees as supplement to their salaries and perks.
Top executives of the Government department, are ex-officio members and

60
AIR 2003 SC 1764.
61
AIR 2003 SC 4531.
62
AIR 2005 SC 411.
196

office bearers of Corporation. The Corporation is fully supported financially


and administratively by State and its authorities. Even in day to day
functioning the Corporation is supervised and controlled by various
departmental authorities of State particularly of Food and Civil Supplies.
Authorities under the control of the Government of India.- By words
‘authorities under control of the Government of India’, it is meant to bring into
the definition of state all areas outside Indian territory but which are under or
may come under the control of the Government of India, such as, mandatory
or trustee territories. Such a territory may come under India’s control by
international agreement. Thus even such areas will be the subject to Part III
and the inhabitants of such areas may also claim the benefit of Fundamental
Rights guaranteed in Part III.
Basis of Reservation in Private Sector
(A) P.A. Inamdar v. State of Maharashtra, AIR 2005 SC 3226.
The highly debated case of P.A. Inamdar v. State of Maharashtra,63 (9
judges bench case) can be considered as the base of the reservation in Private
Sector because the 93rd Amendment of the Indian Constitution was inspired by
this case. In this case a number of learned counsel addressed the Court at the
time of hearing by raising many issues and canvassing different view-points of
law referable to those issues. After considering those issues the Hon’ble
Supreme Court of India held that a minority educational institution has a right
to admit students of its own choice, it can, as a matter of its own freewill,
admit students of non-minority community. However, non-minority students
cannot be forced upon it. The only restriction on the freewill of the minority
educational institution admitting students belonging to non-minority
community, is, as spelt out by Art. 30 itself, that the manner and number of
such admissions should not be violative of the minority character of the
institution.
On the point of reservation in educational institutions', the Court held
that neither the policy of reservation can be enforced by the State nor any

63
AIR 2005 SC 3226.
197

quota or percentage of admissions can be carved out to be appropriated by the


State in a minority or non-minority unaided educational institution. Minority
institutions are free to admit students or their own choice including students of
non-minority community as also members of their own community from other
Sates, both to limited extent only and not in a manner and to such an extent
that their minority educational institution status is lost. If they do so, they lose
the protection of Art. 30(1). Neither in the judgment of Pai Foundation,64 nor
in the Constitution Bench decision in Kerala Education Bill,65 there is
anything which would allow the State to regulate or control admissions in the
unaided professional educational institutions so as to compel them to give up a
share of the available seats of the candidates chosen by the state as if it was
filling the seats availability to be filled up at its discretion in such private
institutions. This would amount to nationalization of seats which has been
specifically disapproved • in Pai Foundation66. Such imposition of quota of
State seats or enforcing reservation policy of the State on available seats in
unaided professional institutions are acts constituting serious encroachment on
the right and autonomy of private professional educational institutions. Such
appropriation of seats can also not be held to be a regulatory measure in the
interest of minority within the meaning of Art. 30(1) or a reasonable
restriction within the meaning of Art. 19(6) of the Indian Constitution. Merely
because the resources of the State in providing professional education are
limited, private educational institutions, which intend to provide better
professional education, cannot be forced by the State to make admissions
available on the basis of reservation policy to less meritorious candidates.
Unaided institutions, as they, are not deriving any aid from State funds, can
have their own admissions if fair, transparent, non-exploitative and based on
merit.
On the point of reservation of NRIs seats: the court held that a limited
reservation of seats, not exceeding 15% may be made available to NRIs

64
2002 AIR SCW 4957 : AIR 2003 SC 355.
65
AIR 1958 SC 956.
66
2002 AIR SCW 4957 : AIR 2003 SC 355.
198

depending on the discretion of the management subject to two conditions.


First, such seats should be utilized bona fide by the NRIs only for their
children or wards. Secondly, within this quota, the merit should not be given
a complete go by. The amount of money, in whatever form collected from
such NRIs, should be utilized for benefiting students such as from
economically weaker sections of the society, whom, on well defined criteria,
the educational institution may admit on subsidized payment of their fee. To
prevent misutilisation of such quota or any malpractice referable to NRI quota
seats, suitable legislation or regulation needs to be framed. So long as the
State does not do it, it will be for the Committees constituted pursuant to
Islamic Academy’s direction to regulate.
On the point of fee structure in private unaided professional
institutions: the court decided that every institution is free to device its own
fee structure subject to the limitation that there can be no profiteering and no
capitation fee can be charged directly or indirectly, or in any form. The
charging of capitation fee by unaided minority and non-minority institutions
for professional courses is just not permissible. Fee structure can be regulated
in the interest of preventing profiteering.
On the admission procedure in private unaided professional
institutions : The court held that two committees for monitoring admission
procedure and determining fee structure in the judgment of Islamic
/n

Academy’s, are permissive as regulatory measures aimed at protecting the


interest of the student community as a whole as also the minorities
themselves, in maintaining required standards of professional education on
non-exploitative terms in their institutions. Legal provisions made by the
State Legislatures or the scheme evolved by the Court for monitoring
admission procedure and fee fixation do not violate the right of minorities
under Art. 30(1) or the right of minorities and non-minorities under Art.
19(l)(g). These are reasonable restrictions in the interest of minority

67
2003 AIR SCW 4240: AIR 2003 SC 3724.
68
Ibid.
199

institutions permissible under Art. 30(1) and in the interest of general public
under Art. 19(6) of the Constitution. The alternative suggestion of post-audit
or check after the institutions have adopted their own admission procedure and
fee structure, is unacceptable for the reasons shown by experience of the
educational authorities of various States.
The Committees, to be more sensitive and to act rationally and
reasonably with due regard for realities. The Committees regulating
admission procedure and free structure shall continue to exist, but only as a
temporary measure and an inevitable passing phase until the Central
Government or the State Governments are able to device a suitable
mechanism and appoint competent authority in consonance with the
observations made hereinabove. Needless to say, any decision taken by such
Committees and by the Central or the State Governments, shall be open to
judicial review in accordance with the settled parameters for the exercise of
such jurisdiction.
(B) 93rd Amendment of the Constitution of India : The Constitution
(Ninety-ThirdAmendment) Act, 2005 :69
An Act further to amend the Constitution of India. Be it enacted by
Parliament in the Fifty-sixth year of the Republic of India as follows :
1. Short title and commencement- (l)This Act may be called the
Constitution (Ninety-third Amendment) Act, 2005.
(2) It shall come into force on such date as the Central Government may, by
notification in the Official Gazette, appoint.
2. Amendment of Article 15.- In Article 15 of the Constitution, after clause
(4), the following clause shall be inserted, namely : “Nothing in this Article
or in sub-clause (g) of clause (1) of Article 19 shall prevent the State from
making any special provision, by law, for the advancement of any socially and
educationally backward classes of citizens or for the Scheduled Castes or the
Scheduled Tribes in so far as such special provisions relate to their admission

69
Received the assent of the Presidnet on 20-1-2006. Act published in Gaz. Of India;
20-1-2006; Pt. II-S. 1, Ext., P. 1 (No. 4).
200

to educational institutions including private educational institutions, whether


aided or unaided by the state, other than the minority educational institutions
referred to in clause (1) of Article 30.”
Lok Sabha on Reservation in Private Sector :
Resolution Re: Reservation for Sc/S.T.’s and Backward Communities in
Private Sector : Discussion on resolution regarding reservation for Scheduled
Castes/Scheduled Tribes, and Backward Communities in private sector in 14th
Lok Sabha is as :
After obtaining the consent of Deputy speaker of Lok Sabha the resolution
was moved by. Shri S. Ajay Kumar (Ottapalam): “Having regard to the fact
that unemployment situation in the country has aggravated due to
disinvestment, privatization of Public Sector Undertakings, downsizing of
Government services and non-recruitment in Government Departments which
has adversely affected the weaker sections particularly S.C.’s/S.T.’s and
backward communities, this House urges upon the Government to take
immediate steps for reservation in employment in favour of persons belonging
to the Scheduled Castes, Scheduled Tribes and socially and educationally
Backward Classes in private sector also.”
The unemployment situation in the country is becoming more and
more alarming as the generation of employment in all sectors has not
registered an increase in tune with the increasing demand and also in many
sectors, the trend has been negative particularly during the last decade.
As per the report of the National Sample Survey Organization, the rate
of growth of employment declined from 2.7 per cent per annum in 1993-94 to
1.07 per cent per annum in 1994-2000. According to the Report, the number
of unemployed increased from 20 million in 1993-94 to 27 millions in 1999-
2000 and also the incidence of unemployment increased from 5.99 per cent in
1993-94 to 7.32 per cent in 1999-2000. At the end of 1996, there were over
36 million persons registered on the employment exchange of India. The
number increased to 94 million by the year 2002. The rate of employment
generation in the organized sector has declined from 2.4 per cent during 1971-
201

81 period to 1.6 per cent per year during the 1981-91 period and to 0.8 per
cent during the 1991-95 period basically due to the industrial sickness as result
of ill-conceived economic policies pursued by the successive Governments
and it is well demonstrated in the industrial growth rate as stated in the
Economic Survey 2003-04. In the agriculture sector also, the situation is
highly disappointing as the employment in this sector dropped to 57 per cent
in 1999-2000 from 60 per cent in 1993-94.
The problem of depletion of employment is clearly linked to the LPG
policies pursued by the successive Governments at the Centre and the States
for over one decade.
The Scheduled Castes and the Scheduled Tribes and the other socially
and economically backward communities are the ones who are most hit by this
situation. The industrial units in the Public Sector and also the Central and
State Governments were the major areas of employment generation and in
these sectors the socially backward communities and other weaker sections
enjoyed the chances of getting employment through the existing reservation
policy only. But with the policy of privatizing the Public Sector Units,
downsizing of Government services and the ban on recruitment minimized the
avenues of employment for these sections.
Agriculture sector used to provide about 60 per cent of the total
employment in the country. More than 70 per cent of the people depend on
this sector. Agriculture sector suffered heavily during this period owing to the
above said policies. The decision of the Government to include agricultural
produce in the list of reducing of import tariffs in accordance with the WTO
conditions played havoc with our agriculture sector. Also, the stand of the
Government cutting down the public investment in this sector coupled with
the severe drought situations prevailed in many parts of the country in
successive years crippled the Indian agriculture. Due to this situation, there
were drastic reduction in the agricultural activities resulting in millions of
agricultural labourers losing their work and means of livelihood and life
security.
202

The Economic Survey 2003-04 says:


“More then 58 per cent of the population depends on agriculture, a
sector producing only 22 per cent of GDP. While an acceleration in
agricultural growth to 4 to 4.5 per cent is imperative, even with such
growth, the share of agriculture in GDP is likely to reduce further.
Therefore, there is a need to absorb excess agricultural labour in other
sectors.”
Sir, here it should be noted that the work force in the agriculture sector,
especially in the rural areas are down in respect of the most vulnerable
sections, like the Scheduled Castes and Scheduled Tribes and other weaker
sections of the society. Therefore, to accommodate these sections, new
avenues have to be explored and identified. Since the private sector is given
priority of development and since there is a reduction in the employment
opportunities in public sector and government sectors, extending the existing
reservation facilities to the private sector is a must.
I urge upon the Government to actively facilitate the above perspective
to ensure that the privilege of reservation is extended for Scheduled Castes
and Scheduled Tribes and Other Backward Communities to the private sector
also. The unambiguous directive drawn in the National Common Minimum
Programme is to be implemented with a definite time frame.
In this context, I wish to express my apprehension of possible delays
and even vacillation from various constituencies in this regard. Corporate
private sector is already up in arms against this idea in the name f efficiency
and the dominating feudalists mindset may also work in vehemence. Only
with the will and determination of the Government, we will be able to achieve
this great national goal.
Mr. Deputy-Speaker: Resolution moved:
“Having regard to the fact that unemployment situation in the country
has aggravated due to disinvestment, privatization of Public Sector
Undertakings, downsizing of Government services and non-recruitment in
Government Departments which has adversely affected the weaker sections
particularly S.C.’s/S.T.’s and Backward Communities, this House urges upon
the Government to take immediate steps for reservation in employment in
203

favour of persons belonging to the Scheduled Castes, Scheduled Tribes and


socially and educationally backward classes in private sector also."
Shri. C.K. Chandrappan (Trichur): Sir, I stand to support the Resolution
moved by Shri S. Ajay Kumar. I was amazed at hearing the speech made
from the BJP bench, it reminded me of the arguments advanced by the leaders
of apartheid to the people of Africa that ‘you are not civilized enough, you are
not educated enough and you cannot be independent, whereas we are
educated, we are civilized and we will rule you for thousand years.’ I do not
know how this kind of argument can be advanced here.
Here is a case where unemployment is acute. There is no credible
statistics by which we can say that there is so much of unemployment. Some
say it is four crores and some say it is six crores and all that, but the fact of the
matter is that in this country there is a log of unemployment. When there is a
log of unemployment, at the same time, as the Mover of the Resolution had
pointed out, there are various areas where employment opportunities are
denied. Employment opportunities are denied in; the Government in the name
of no recruitment. Employment opportunities are denied in the Government
and in private companies in the name of downsizing. Employment
opportunities are again denied to the most downtrodden section in the public
sector undertakings because they are privatized or disinvested. So, this creates
a certain new situation in the country. Over and above, it is a question of
tackling serious unemployment situation.
Here, these new policies create conditions where people, who would
have otherwise got employment opportunities, are denied these. Now, take
the case of the present Budget proposals. In the Budget, it is proposed that
disinvestment is going to take place in a big way in LIC, Civil Aviation and
Telecom. I think these are the three sectors proposed. These are the areas
where people used to get employment based on reservation. Now, it may be
FICCI’s argument or it may be CII’s argument that they want competitive
edge, this and that. That is precisely what the champions of apartheid also
204

were arguing that those people were not civilized enough and that they were
not educated enough.
Here, in this country, the Constitution stands committed that the
people, the S.C.’s & S.T.’s, who, due to historical reasons, are not provided
the opportunities to come forward in life, should be taken by hand and put to
the forefront. When we advance, when the society advances, we want those
people also to go along with us. If your argument is accepted that they should
be trained first, that they should be educated first, then.they will have to wait
for centuries to get employment. You are supporting reservation, but it would
be a left-handed compliment. We are saying that reservation should be there.
In the given conditions of India, when reservation, as a matter of principle, is
accepted in the Constitution, here are certain new areas where opportunities
are denied because of the Government’s policy. We want reservation to
ensure job opportunities in those sectors where disinvestment and
privatization are taking place. Another point is, India got Independence 57
years ago. Now, 57 years have passed.
A child born in 1947 would turn 60 in another three years; still we
could not do much justice to the backward classes and the tribals. There are
many appalling stories one could narrate. The tribals who wanted shelter and
job had agitated in Kerala were shot down. The tribals who got killed was not
compensated, where as, the policeman who shot them down was compensated.
This happened to the Muthanga incident. The tribals were not compensated
by the Government. This happened even 57 years after we attained
Independence. This is the condition of the poor, especially the socially
oppressed, the Scheduled Castes and Scheduled Tribes. So, how are we going
to implement the pledge made by the founding fathers of the Constitution?
This is a thing that every one of us sitting here should get a little more worried
about. If that has to be done, concrete steps have to be visualized by which
the backlog .could be eliminated.
The proposal is that in Private Sector employment there should be
reservation based on backwardness for the Scheduled Castes and Scheduled
205

Tribes. I do not think, there is anything wrong in the demand. Why


somebody should get worried because the FICCI has said something. The
FICCI and other organisations might be thinking only in terms of making
more profits in their business but this House should be more concerned about
the health of the country, the future of the country and the future of the most
downtrodden sections. Therefore, I say, this is a serious proposal which
deserves serious consideration of the House. This is a proposal that has come
at the right time, because more privatization means more denial of jobs to the
socially oppressed. So, I propose that more serious thought should be given to
this proposal. Maybe, if we cannot right now adopt this Resolution, you may
think in terms of setting up a Parliamentary Committee to examine this
proposal and come forth with a report so that the House could debate and
decide to the Report.
Rajya Sabha on Reservation in Private Sector
The proceeding of Rajya Sabha on extension of reservation policy for
S.C.’s, S.T.’s and O.B.C.’s in private sector, dated 10th December, 2004, can
be observed as :
Shri Jesudasu Seelam : I stand to support the Resolution. I would
like to make certain things clear. The Government has indicated that it is
committed to starting a National dialogue with all the political parties and with
the industrialists on the issue of reservation for Scheduled Castes and
Scheduled Tribes in private sectors. It did not include O.B.C.’s. The
Resolution would, take care of the particular part. I must tell that two major
developments took place in the country. The first was Mandal Commission
Agitation, and the second was privatization and globalization. But, there has
been an attitudinal shift because the Governments were unstable and there was
no suitability. Whenever there are disturbances in the system the worst
sufferers are the weaker section of the society.
With all these developments in their mind, and with reflections and
aspirations in their heart, the Dalits, specially the youth, in this country, feel
that they are being neglected, they are being excluded, that they are being
206

alienated and isolated. You have been giving so many agencies to the private
sector. Is there any agency in the private sector which has been given to a
Dalit or a Scheduled Caste? During all these forty to fifty years, there has
been development, but the disparity in development is so glaring that the
widening of gaps is very severe, which is reflected in the number of Naxalites.
90 percent of naxalites belong to these weaker sections of the society. We
should also place ourselves in private sector’s position. They have certain
apprehensions. But the Government is willing to sit with them and give them
an assurance. Today, you suddenly reserve 15 per cent for the Dalits or
Scheduled Castes. The process is already on.
The delivery mechanism needs to be sensitized. They should be made
accountable. But Dalits feel excluded because today 168 Government of India
Secretaries and equivalent posts are there, but there is no Dalit in that post.
There are 439 posts of Joint Secretaries. Hardly nine people belong to S.C.’s
and S.T.s. Your assessment system has to be changed. Subordinates also
should be given an opportunity.
I am sure we are all here to appreciate the efforts of the Government. I
find lot of committed developmental officers taking a lot of interest. A
dialogue will be intensified to convince the private sector to accept it.
Shri Sharcid Anantrao Joshi : I am very doubtful about the objective to be
achieved out of the Resolution of Mr. R.S. Gavai. We know the conclusion of
the Resolution. The hon. Minister, while replying, would certainly say that it
is a part of the CMP and the Government have the intention of implementing
within a given specific time limit.
The second point that I would like to make as an agriculturist is that if
agriculture were to be considered as private sector. I am ready to employ
people to whom you are prepared to give employment in the agricultural
sector, provided you consider that employment in agriculture is employment
in the private sector.
Shri Matilal Sarkar : The rate of growth of employment, as per the National
Sample Survey Report, has declined from 2.7 per cent in 1994 to 1 per cent in
207

2000. At the same time, if you look at the employment generation, it was 2.4
per cent during 1971-81 and it came down to only 0.8 per cent in 1991-95. In
the agricultural sector also employment opportunities dropped from 60 per
cent in 1994 to 57 per cent in 2000. This means, the worst sufferers are
S.C.’s/S.T.s and Other backward Classes, because they are largely employed
in this sector.
In the case of O.B.C.’s, they constitute 51 per cent of the total
population whereas their job share is only 12 per cent. That is why this
question of reservation had come in their cases also. The spirit of our
Constitution is that due to historical reasons the S.C.’s, the S.T.s and the
O.B.C.’s people could not come forward; and, it is the duty of the nation to
bring them upward. That is why the mechanism of reservation has been
incorporated in the Constitution. There are some States and Tripura being one
of them, where the reservation has not come into force in the State services.
Throughout the country, wherever naxalites or other terrorist groups are there,
we find only those people are involved who are frustrated, who are
disappointed, who do not see any hope and whose aspirations are ruined.
Now the time has come to take some initiative. I should say some devices
should be explored so that jobs can pour out in large numbers at the ground
level. Otherwise, this agony of the society will not perish; it will not be
removed.
S/iri V. Narayanasamy : A decision was taken by the UPA Government that
in the private sector, reservation for the Scheduled Castes, the Scheduled
Tribes and the O.B.C.’s people should also be given and they should be given
employment opportunities. It is under the total control of bureaucracy who
are not allowing reservation to be implemented for the concerned people.
Millions of. young youth, especially, belonging to the Scheduled Castes, the
Scheduled Tribes and the O.B.C.’s have to be provided jobs. Therefore, the
avenue that is open to them is the private sector. The Hon’ble Prime Minister
in the chamber of Commerce and Industry meeting said that the Government
is committed to provide reservation in private sector industries. I am surprised
208

and aghast at the suggestion made by the industry. It is very surprising. They
say that efficiency will not be there.
A lot more has to be done for the backward classes. There should be a
Parliamentary Committee for O.B.C.’s. There should be a pre-promotion
training for O.B.C.’s also in the Government jobs.
Prof. Saif-ud-din Soz : Reservation should continue till they come up to the
level of the other part of the society. The basic principle was that this section
of society and its children would be given ability to compete. The children of
backward section have no training. All metropolitan cities, which have a
population of more than 25 lakhs must have colleges established for the
children drawn from the Scheduled Castes and Scheduled Tribes and even
O.B.C.’s. Why during the past 55 years or more we failed to establish
colleges for preparing the children from these backward classes for IAS, IPS,
IRS, ISS and many other services. They, founding fathers had envisioned that
after a decade, children drawn from all these sections of society would be
empowered to face the test for services, and they would be equal with others.
Therefore, reservation principle is necessary and reservation must continue.
Simultaneously, we must have scholarship scheme.
Shrimati Prema Cariappa : Reservation is in some form ought to be extended
to the private sector to correct the mistake made in the past. The private sector
companies which have taken various concession from the Government must
be asked to spend some percentage of their profits in the social sector and it
may be in the form of keeping some seats reserved in their companies for the
weaker sections. The reservation in jobs is one of such powerful tools to bring
about social change and to bring lower castes at par with higher castes. All
efforts should be made to persuade the private sector companies to follow the
policy of reservation.
Dr. Faguni Ram : Reservation of Scheduled Castes/Scheduled Tribes is in
relation to the percentage of proportion of their population. Whenever the
population increases, their share should be increased.
209

The main point is that job opportunities for S.C.’s/S.T. people are
decreasing under the Government jobs because the number of Government
jobs are declining. Recently, there has been a ban on fresh recruitment in
Government jobs. They remain unemployed even after being educated. To
say that if the S.C.’s/S.T. people are given reservation in the private sector,
there will be decline in quality, is not proper in my view. I, therefore, strongly
plead that whenever appointments are to be made, whether it is in private
sector or any other sector, there should be provision for reservation for these
people. After all, the S.C.’s/S.T.’s people are also the part and parcel of this
country and society. They also contribute to the building of the nation and
hence, they should also have their participation in it.
I think that in order to enable them to perform different types of work
there should be provision for imparting them training at Government level or
by private institutions so that they may attain skills and become expert in their
work and when go for the private sector jobs they could work to the
requirements of their employers and help in the growth of the industry. I
believe that the private sector people will liberally come forward in this regard
and they would provide reservation in jobs for these people as per the
Government policy so that they contribute towards the task of nation-building.
The Minister of Social Justice and Empowerment (Shrimati Meira Kumar),
intervening in the debate, said : I want to congratulate Shri R.S. Gavai,
honorable Member of Parliament for having brought his Resolution because it
has generated a very useful debate. Twenty five members from almost all the
parties have participated in this debate. I am very happy to note, and, I feel
very encouraged that every one Member has supported this Resolution, and
there is unanimity is lending support. The UPA Government in its National
Common Minimum Programme has made a commitment that we will have
national, dialogue with the private sector and with all the political parties with
a view to having a consensus to fulfill the aspirations of S.C.’s and S.T.’s
youth for having affirmative action including reservation in the private sector.
Everybody has mentioned about the historical injustice that has been done to a
210

very large section of the Indian society. So, it would be in the interest of all of
us to ensure that these people are mainstreamed and they are given a place of
respect under the sun so that they bring out their best and contribute to the
progress of this country. So, with this view, this Government has included
this very important paragraph in the National Common Minimum Programme.
Due to privatization and globalization, gradually, on the one hand, the
Government jobs started shrinking and on the other hand, the private sector
became the prime mover of economy, and it had immense opportunities for
jobs. We gave concession and every possible assistance to the private sector
to grow. Today it has really grown up. Another section of our population still
requires opportunity to grow. We want the private sector to do this work
voluntarily. Because the best of the people, the most capable of the people,
are running the private sector, the Prime Minister and the UPA Government,
want them to come with their proposals to fulfill the aspirations of the
S.C.’s/S.T.’s youth. On 24th August, we also had a conference where all the
intellectuals, vice-chancellors, social scientists, economists, retired civil
servants and all the other thinkers concerned with this issue participated.
They have given some very useful suggestions and they were all unanimous in
support of this policy of affirmative action, including reservation. Hon’able
Prime Minister has also, formed a Group of Ministers who held a meeting and
after the meeting letters have been sent to 218 associations of trade and
industry sector. Some of them have replied. We are awaiting reply from most
of them. Then, we will take the next step.
We will hold consultations with M.P’s belonging to S.C.’s/S.T.’s and
with other NGOs concerned on this. Whatever emerges out of that
consultation, we shall be implementing that. The definition of ‘merit’ is very
distorting, and it is something which suits a certain section or a certain sector
which talks of reservation with contempt. But frankly speaking, it wants to
reserve a certain arena just for itself. They forget that there is something
called opportunity. People whom you are looking down upon, are not the
211

people who do not work hard. They are the most hard-working people, back­
breaking hard work they do, 24 hours a day.
This talk of merit is a part of the untouchability phenomenon. So, I
don’t want to talk about it. So far as private sector is concerned, whatever be
their misapprehensions, I want to remove them. The UFA Government is
committed to taking affirmative action, including reservation for S.C.’s and
S.T.’s youths in the private sector. I would, therefore, request Shri R.S. Gavai
to kindly withdraw his Resolution.
Arguments of Leading personalities on Reservation Policy in Private
Sector
(A) Arguments in favour:
A policy of reservation in the private sector would definitely not effect
its “efficiency”, but would help in a small way in correcting historically
entrenched and still pervasive social discrimination.
So the debate on reservation in the private sector must be seen within a
broader perspective, as being a policy that would definitely not affect
“efficiency” of private, sector functioning, but still would go a small part of the
way in correcting historically entrenched and still pervasive social
discrimination.70
Under the circumstances the refusal of the industry to employ people
from S.C.’s/S.T.’s cannot be accepted as valid and justifiable on any ground.
The UFA government is also duty-bounded by the CMP to enforce reservation
of jobs for S.C.’s/S.T.’s and O.B.C.’s in private companies. It must pass a law
in Parliament providing for it. If it does not do so, that will only reflect the
hypocrisy of the constituents of the UPA. Its failure to do so will, in
unequivocal terms, prove the absurdity of its policy of liberalization,
privatization and globalization. It will also be a clear signal to the people
belonging to Scheduled Castes, Scheduled Tribes and Other backward
Classes, who constitute 85% of the total population of the country, that if they

Ghosh, Jayanti, Frontline. (The Hindu Group) Vol. 22, Issue 22, 22 Oct-4 Nov
2004.
212

wish to live a dignified life in, this country they must throw out every
government which comes to power on their strength and works contrary to
their interests and as the agents of a few hundred capitalists and industrialists.
They should also organize themselves under the new leadership
evolved from amongst themselves (not depending on its old leadership which
goes on changing its stance in view of its own personal benefits) and launch a
movement to force the government to take decisive action in the matter and
71
not pay only lip-service to their cause.
If Reservation is Against Merit: The supreme court verdict on the issue of
unaided minority institution gives a freehand to the people who have always
wanted the education to be the domain a few people and communities.
Unfortunately, these institutions serving in the name of minorities will end up
creating more Brahmins for our country. The very purpose of educating poor
79
and minorities gets defeated.
This concept of private reservation cannot be considered as charity, but
a right from a government that exposed its hollowness. Further, it is a
^
7
necessity as the government failed to create jobs to its qualified aspirants.
Affirmative Actions in Indian Private Sector: Three alternative remedies,
namely, equal opportunity laws, affirmative action measures and reparation
that have been used by a number of countries to correct the imbalances in the
sub-groups of their population. Adoption of some of these remedies against
discrimination for S.C.’s/S.T.’s/O.B.C.’s in private sector in India will be
determined by the nature of economic discrimination faced by them in various
markets. It is more than apparent that the low caste untouchables in India
suffered from societal discrimination in multiple economic spheres.
Therefore, remedies against past and present discrimination in the private
sector should necessarily include multiple economic spheres and not just the
labour market. Given the wider coverage of societal discrimination strictly

Singh, Mahi Pal., “Question of Reservation in Private Sector”. PUCL Bulletin,


August 2005.
Rawat, V.B., Counter Currents Org. Dalit Issues, Aug. 17lh 2005.
Reddy, Dr. K. Vidyasagar, Counter Current Org. Dalit Issues, Aug 11, 2005.
213

speaking all the three measures are essential for remediation of market and
non-market discrimination.74
Reservation in private sector inevitable
“Government should promulgate an ordinance to make the
constitutionally guaranteed reservation facilities for S.C.’s, S.T.’s and
backward classes applicable even in private sector,” urged D Basavaraj,
President of the City Municipal Council.
He was speaking after inaugurating the Ambedkar Birth Anniversary
programme under the auspices of Dalita Sangarsha Samiti.
Expressing deep concern over the absence of educated dalit youth in
companies like Wipro and Infosys, Basavaraj felt that implementing
reservation norms in the private sector was the only remedy to ensure job
security to the oppressed classes.
He also pointed out that the government had stopped recruitments and
downsizing exercises were already on in several departments. “Decades ago
all the educated dalit youth invariably got a good job. However, after the
onslaught of globalization, even rank holders find it difficult to get a suitable
placement,” he regretted.75
Reservations must in private sector
It is said that only the wearer knows where the shoe pinches. Extreme
hope always takes birth from extreme miseries and back-breaking difficulties.
Dr. B.R. Ambedkar, one of the architects of the Constitution of India,
belonged to a very poor section of society and had to face humiliation many a
time during the course of his life and studies.76
‘Pvt. Sector has to implement quota’
New Delhi: The Government doesn’t want to force the private sector to
implement reservation and would prefer that companies do it voluntarily.

Thorat. Sukhadeo (Chairman, U.G.C.), “On Reservation Policy for Private Sector”.
Basavaraj, D. (President of City Municipal Council), Decan Herald (Internet
Edition), May 1st, 2005.
76
Singh, Karam, (An IAS Officer), The Tribune, (Chandigarh) Jan. 15th, 2006.
214

Minister for Social Justice and Empowerment Meira Kumar said this in an
interview to Karan Thapar on CNBC’s programme, India Tonight.
“You have to do it amicably. I am the last person to do it by legislation.
Please don’t force me to a situation where we have to thin of legislation. I
have great regard for captains of industry and they should do it. I think they
understand their moral responsibility”, Meira Kumar said.
The UPA Government was committed to implementing reservations for
Scheduled Castes and Scheduled Tribes, said Meira Kumar.
“The commitment is to both affirmative action and reservation. Affirmative
action includes reservation,” she said adding the implementation was “not just
a possibility but it is a commitment”.
Kumar said, the voluntary action of legislation was the only way to implement
reservation in the private sector. “I suppose there is no third way”.77
Private sectorjob reservation-Striking the middle path
The principle of job reservation for certain categories cannot, per se,
be faulted by anyone with a social conscience. But there are problems in
applying such a policy in the private sector. One way to get around them
would be for an industry association to draw up and implement a scheme of
reservation under supervision by its members.
The Constitutional reservation of jobs in the public sector for candidates
belonging to the Scheduled Castes and Tribes is a reflection of the nationally-
felt obligation to compensate them for the undisputed centuries of suppression
of their opportunities and a fast-track remedy for the consequent cumulative
social and economic disadvantage faced by them.
The principle itself cannot, therefore, be faulted by anyone with a social
conscience, particularly in the context of increasing privatization leading to
the loss of jobs reserved for such candidates in the public sector which would
get transferred to the private sector. If the principle itself is unexceptionable,
why, then, is there an uproar about its being extended to the private sector? Is

A report, CNN-IBN News dated June 1st, 2006., Decan Herald, June 7, 2006.
215

the private sector somehow automatically exempt from sharing the


Constitutionally-recognised national obligation towards S.C.’s/S.T.’s?
Job reservation in the private sector holds out the promise of making up for
the loss of present and future jobs reserved for the S.C.’s/S.T.’s in the public
sector due to the downsizing and privatization of government’s activities and
giving the private sector a share in the fulfillment of the national social
obligation towards the S.C.’s/S.T.’s.
But the devil, as they say, is in the detail of implementation. The alternative
approach suggested above, however, attempts to strike a middle path and meet
the expectations of both the S.C.’s/S.T.’s candidates and the private sector.78
Reservation for Dalits in private sector
For sometime past there has been a persistent demand from Dalits that
law should provide reservation for scheduled Castes and Scheduled Tribes in
business enterprises and in works funded by the Governments and Public
Sector.
I feel that all political parties must be compelled to give election promise that
they accept this principle and will effectuate it, namely, that of funds spent by.
Central, State Govt, local bodies or public sectors in connection with public
works projects etc will carry on in built clause that at least to start with 15%
(though on population basis it should be 22% - just as USA provided 10%
being the proportion of minority population) would be used to procure
services or supplies from businesses owned and controlled by Dalits and most
backward classes. This commitment now will alone will entitle the parties to
Dalits votes.
Legislation as mentioned above may go a reasonable distance in atoning for
past iniquities committed on Dalits and give then a somewhat equal place in
our society as is the mandate of Human Rights.79
Reservation in private sector unlikely:

Doraiswamy, P.K. (Ex. Special Chief Secretary, Govt, of A.P.), Business Line (The
Hindu Group), Dec. 14th, 2004.
Sachar, Rajindar, PUCL Bulletin, May, 2004.
216

In Bangalore the former Prime Minister H.D. Deve Gowda sounded


skeptical about reservation being extended to the private sector under the
present circumstances.
Speaking at the May Day function organized by the labour wing of the Janata
Dal (Secular) there, he said that he would prostrate himsejf before anyone who
succeeded in ensuring reservation in the private sector. (Mr. Deve Gowda
organized a seminar in Mysore three years ago on reservation in the private
sector.)
Hitting out at those who described the Government as a “father-son
government,” Mr. Deve Gowda said the Government was a coalition of the
JD(S) and the Bharatiya Janata Party. He was only giving certain suggestions
in his capacity as the national president of the JD(S). His main concern was
the implementation of programmes for the welfare of the people. He would
not hesitate to criticize the Government if it did not live up to the expectation
of the people.80
Reservation in private sector report to go to Cabinet:
Despite the raging controversy over O.B.C.’s reservations, the
government has not given up on the idea of reservation in private sector telling
industry that “time is running out” for it to act voluntarily. Social Justice and
Empowerment Minister Meira Kumar says, she plans to go to the Cabinet with
the report of the Group of Ministers on the issue “at the earliest” as the
reservation “has to be done and done fast”.
In an interview, she, however, declined to hazard any guess on whether
the government would act in the matter before the monsoon session of
Parliament commencing next month or before the next round of assembly
polls including Uttar Pradesh scheduled early next year. “There is a lot of
pressure on me. I am working under great pressure but I want it to be done,
done amicably and without any type of confrontation. Time is running out”,
Kumar said, dismissing suggestions that the issue has been kept on the
backbumer in the wake of the O.B.C.’s quota row.

80
The Hindu, (Banglore), dated May, 02, 2006.
217

Asked, if she is referring to bringing legislation in this regard, Kumar


said, “I am not talking about legislation. I am telling the industrial and
business houses how to do it. “If they will not do it, then the matter is before
the Cabinet and it will decide”, she said admitting at the same time, that the
“reluctance on the part of the industry is petering down and its position has
“softened”. (PTI)81
‘Bill on job quota in private sector soon ’
A bill to ensure job reservation for S.C.’s/S.T.’s and O.B.C.’s in the
private sector would be introduced in Parliament “in the near future”,
according to Union Chemicals and Fertilizers Minister Ram Vilas Paswan.
The UPA Government is committed to providing reservation in the private
sector and “nobody can stop it”, Paswan declared, addressing a conference
here on preferential participation organized by the Pattali Makakal Katchi
(PMK), a constituent of the UPA coalition at the Centre.
“We will the see the dawn of a new era. And I can assure you that this
Government is committed to reservation in the corporate sector”, he added.
Referring to the concerns raised by the opponents of reservation in the private
sector he said: “You can change your government and religion, but cannot
change the caste of person.”82
Reservation 4 dalits :
The Indian Industrialists are opposing the move to give reservation in
the Private sector. We could have appreciated even this if they had united
against the trade and commerce restrictions imposed by the World Trade
Organization, IMF and World Bank. Pepsi, Lehar and Coca-Cola are
siphoning a profit about Rs. 6000 crores annually but our industrialists never
got worried and united in this regard. Their worries began when something
was given to the poor. Our industries have hardly contributed in terms of
research and technology whereas American - European industrialists take the
maximum credit on this score. Our industries either use the technology

Kumar, Meira, India News views (Delhi) dated June. 7lh, 2006.
Paswan, Ram Vilas, The Indian Express (Chennai) dated Sept. 9th, 2004.
218

developed at the expense of the govt, or they simply borrow from foreign
countries. According to an estimation, about one crore twenty five lakhs crore
of Rupees of black money from India is in Swiss Banks, who is responsible
for this black money? Evasion of taxes like customs, Income tax, Sales tax
and Excise are so rampant that there is hardly any parallel to them in the
. world. Do we have such an example like Melinda Gates, wife of Bill Gates
who gave about 5000 crores of Rupees for HIV patients and education seeing
the condition of the poor in Calcutta slums? Her husband Bill Gates has
announced that he would part with his whole wealth before his death except
bare minimum necessity for his children. Our industrialists are not in a
position to produce, a single international brand. There was no reservation in
their establishment yet they have done worse. When a common man goes to
the market to buy small items like blade, nail cutter or torch, he looks for
Korean or Chinese made items because they are beautiful and durable. What
have Indian Industrialists done if they have not produced even small articles?
Now they are arguing strongly against reservation in Private Sector saying it
would hamper the quality and quantity. They are wrong ab initio because
selection process for staff and working people itself is faulty. The method of
appointment in the private sector is through words, nepotism and force and
pressures and not based on merit. If our industries have failed to produce
quality and quantity then it is because of ineffective human resources also.
Like in US we are asking our industries to select the best lot of human
resources from all groups of the population and advocacy for reservation in
Private Sector is a step forward in that direction only. In the US when the
corporate houses declare their profit and loss accounts, they happily disclose
the welfare done to Blacks and Red Indians. Do our industrialists have such a
heart? The selection and recruitment method the private sector does not pool
human resources from more than 20% of the population. Obviously Dalits
and minorities and marginalized groups will be left out and hence best of all
will not get the opportunity to contribute towards the growth of economy.83
Reservation in private sector a social necessity:

83 Raj. Udit, Memorandum submitted to the P.M. of India (Dr. Manmohan Singh) after
the rally held on 12th Dec. 2004. at Ramlila Maidan. New Delhi by the All India
Confederation of SC’s/ST’s.
219

The government’s basic objective of providing reservation to the


Dalits has been to uplift them socially and economically. This has been
partially achieved as far as jobs in the government and public sector are
concerned.84
Reservation in Private Sector :
Any government can assure reservation to the backward classes only
up to education and if possible at the maximum till jobs that too' only in the
government institutions and in its subsidiaries. But fortunately or
unfortunately the present Congress led UPA government gone up to the
extreme of considering the applicability of the very same reservation system
in the private sector also. In the former case reservation in the government
and its allied institutions - almost all organizations are service oriented rather
than profit oriented. However it is less than honest to claim that there is no
government owned profit-making companies following the reservation
system. But in reality, these companies either would be acting as a monopoly
or there wouldn’t be any major rival player in the region to compete with.
Hence, by and large the so-called “reservation system” was not a failure or did
Of

not prove disastrous.


“Frame policyfor quota in private sector”:
A special correspondent of New Delhi a Parliamentary Committee has
urged the Government to come out with a policy soon in regard to
introduction of reservation in private sector and disinvested public sector
companies and refused its request to drop an assurance on it.
“As such, the Committee desires to know the fate of the representations of the
members of Parliament at the earliest. The Committee also notes with
concern that the matter of reservation has been agitating the entire country” he
said and urged the Government to come out with a policy.
The Committee had taken note of a reply of Suresh Pachouri, Minister of State
for Personnel, Public Grievances and Pensions, during April last year asked by

84 Kumar, Suresh (Prof. & Dean IMS - H.P.U. Shimla), The Tribune (Chandigarh)
dated Dec. 19th, 2004.
85 Prakash, A. Tirumalai @ Cool Avenues. Com.
220

Ramdas Athawale and treated it as- an assurance that was required to be


fulfilled by the Ministry within three months of the date of reply, which was
not fulfilled.
The Ministry during October last year, requested for dropping of the
o/

assurance, which was considered by the Committee.


(B) Argument Against Reservation:
Reservation in Private Sectorfor Dalits A Political Stunt:
The Congress-led UPA Government has started a dialogue on
affirmative action including reservations in the private sector for Dalits. It is
quite possibly the first time in modem politics that a Central Government has
pushed forward an agenda without genuine public demand. What is
astonishing is there has not been a single move by the Dalits for such
reservation but even so the Government is trying to build a consensus on the
issue.
Second, this policy was declared in Maharashtra, which is going to the
election polls in October. But we all know that it was in Maharashtra that
Dalits have led the longest movement of “Namantar Movement” for getting
Marathwada University’s name changed after Babasaheb Ambedkar.
So the logical question is if a Government was not able to change the name of
a university after a long movement, how is it ready to give reservation to
Dalits in the private sector even without any demands by them? For this
reason, it seems to be more or less a political stunt by the Congress party,
which has no long-term plan for the Dalits and has lost its credentials among
them at national level in general and in Maharashtra in particular.
Though there is a need for the policy of affirmative action in the private sector
because of a shrinking number of Government and public sector jobs due to
privatization, liberalization globalization, and disinvestment, Dalits are not
convicted that the policy will see the light of day in the near future.87

A report by special correspondent, The Hindu, June 12,2006.


Dr. Kumar, Vivek, Counter Currents. Org. dated Oct 1st. 2004; Sunday Pioneer,
dated Sept. 26th, 2004.
221

Reservation in Private Sector not Required:


To : President of India
Following are the problems because of the Reservations in Private
Sector:
1. Talented people will not get good position. So they will get migrated
to other countries. Causing India loosing the Talent.
2. No new MNC will enter India. Becoz they won’t spare employees
without Talent unlike our Govt. Companies.
Causing Unemployment in India.
3. Existing Indian/MNC’s will stop their units and will slowly migrate to
other countries where they will get benefit,
Causing degradation of development.
4. People will fight each other on caste basis.
Causing violation in India. No peace can exist.
These are the major factors which will affect the nation.
I request you to please stop the proposal of Reservations in private
Sector. Also try to remove them from all the sectors. Please make the
reservations only based on the economic status rather than caste.
Some political leaders to cash the vote bank are trying to put
reservations based on caste and religion in private sectors too.
Please stop this and make India as a developing nation.88
Abolish All kinds ofReservations in India :
Implementing reservation for private sector jobs and educational
institution is completely ridiculous and rubbishness. This will destroy the
competitiveness of our corporates. The quality of our products and human
resources will decrease. The chance of Plane accidents, surgical accidents etc.
cannot be neglected. Because a Pilot or Doctor who achieved that position
only because of reservation can’t be a professional and this will be risk the

Petition to President of India was crated by All Indians and written by Pradeep
Kumar v. (ranideep@gmail.com).
222

lives of millions in our country. No one will like to travel in a plane, which is
piloted by a guy who became pilot only because or reservation. No one will
like, to operate by a medico (surgeon) who became a doctor only because of
reservation. Moreover peoples from the reserved categories are more
interested in time-passes, strikes, bandhs, hartals, politics, etc. than performing
their duties and business. They are not utilizing the generosity given by our
Government.
Still our Government and political parties are giving more and more to them
only for petty Vote-Bank politics and electoral gains. This will diminish the
quality of our nation - India. Now India is facing a stiff competition from
countries like. Russia, South Africa, Israel, China, South Korea, Japan,
Mexsico, etc. in global markets. So reservation will only hurts our prospects.
If corporate gains like Reliance or Tatas or Birlas or Infosys or Wipro will
accept reservation policy and implement it, obviously with in 1 year these
companies will close. Because this way of recruiting will affect their
business. In other countries I mentioned above there is no reservation or
bandhs.89
The die is caste for corporate India :

Indian Prime Minister Manmohan Singh’s advocacy of caste-based


quotas for the country’s underprivileged in the private sector has stirred a
hornets’ nest. Corporate India, which fears that the move would undermine its
capacity to compete globally, has come out strongly against the quotas. It is
threatening to take the issue to court.
While addressing the Confederation of Indian Industry last week, the prime
minister urged the captains of industry to “invest much more in vocational
training and technical education, particularly for youth from a less privileged
background”, and to commit themselves “voluntarily to making it [their
company profile] more broad-based and representative”. Manmohan’s appeal
is seen as a veiled warning to the private sector that if it doesn’t adopt caste-

Riva. T. Phillip. (Rivaji) on rediff.com.dated May 05, 2006.


223

based job reservations on its own, it might have them thrust down its throat by
executive fiat.
At this stage, the prime minister’s suggestion is only a thought tossed on the
table of corporate bigwigs. Soon, it could become the law of the land. The
suggestion came, amid debate on quotas for castes broadly categorized as
Other Backward Castes (O.B.C.’s) in premier educational institutions.
The issue of caste quotas, which is ostensibly aimed at uplifting the
marginalized castes, is one that often provokes heated debated and angry
protests. India already provides for 22.5% reservation of jobs and seats in the
public sector and educational institutions for the Dalits (or Untouchables as
they were once called) and Adivasis (tribals), which occupy the lowest rung in
India’s social hierarchy.
In 1990, when the government proposed reserving another 27% of jobs for
O.B.C.’s, violent protests - one student even torched himself -exploded across
the country. Early this moth, Human Resource Development Minister Arjun
Singh proposed quotas for O.B.C.’s in India’s premier technological and
management institutes, an announcement that has sparked furious street
protests by students.90
Reservation -A necessary evil:
As the public sector units are not generating sufficient employment
opportunities for the growing number of unemployed oppressed people, the
government is forced to look at other options to create employment
opportunities for them. But this is the first time there has been talk of
extending the quotas to the private sector. The proposal has been met with
stiff opposition from Indian industry, which feels if implemented; it will
render domestic industry globally non-competitive. Those who are opposed to
this idea believe that this will hamper India’s growing corporate efficiency.
As the private sector recruits on the basis of merit and not on caste or creed,

90
Ramachandran Sudha, Asia Time, Banglore dated, April 29, 2006.
224

these reservations will be a big blow to the corporate world in India which is
in its infancy with respect to the global scenario.91
I think we should have job reservations in all the fields. I completely
support the PM and all the politicians for promoting this. Let’s start the
reservation with our cricket team. We should have 10 percent reservation for
Muslims. 30 percent for O.B.C.’s, S.C.’s/S.T.’s like that.
Cricket rules should be modified accordingly. The boundary circle should be
reduced for an S.C.’s/S.T.’s player. The four hit by an O.B.C.’s player should
be considered as a six and a six hit by an O.B.C.’s player should be counted as
8 runs. An O.B.C.’s player scoring 60 runs should be declared as a century.
We should influence ICC and make rules so that the pace bowlers like Shoaib
Amhtar should not bowl fast balls to our O.B.C.’s player.
Bowlers should bowl maximum speed of 80 kilometer per hour to an O.BiC.’s
players. Any delivery above this speed should be made illegal. Also we should
have reservation in Olympics. In the 100 meters race, an O.B.C.’s player
should be given a gold medal if he runs 80 meters.
There can be reservation in Government jobs also. Let’s recruit S.C.’s/S.T.’s
and O.B.C.’s pilots for aircrafts which are carrying the ministers and
politicians (that can really help the country...)
Ensure that only S.C.’s/S.T.’s and O.B.C.’s doctors do the operations for the
ministers and other politicians. (Another way of saving the country...)
Let’s be creative and think of ways and means to guide INDIA forward...
Lets show the world that INDIA is a GREAT country.
Let’s be proud of being an INDIAN...
May the good breed of politicians like ARJUN SINGH long live.. .92
Job reservation in private sector can’t be forced:
Former Indian Prime Minister Atal Bihar Vajpayee said the private
sector would have to be responsive to the needs of society as job reservation
cannot be forced on it.

K. Jagadeesh, on the Indus Telgraph dated June 21s', 2004, p. 1.


Premji Azim, Chairman Wipro on Gleez dated may 21, 2006, pp. 1-2.
225

Nothing that an atmosphere had to be created for reservation in the


private sector, Vajpayee said: “In democracy we can’t force issues.”
Addressing M.P.’s belonging to the Scheduled Castes and Scheduled
Tribes, who raised the issue at a meeting here, Vajpayee said the private sector
could not exist in isolation “and has to be responsive to the needs of the
society”.
The issue of extending job reservations for Schedule Castes and
Schedule Tribes beyond government establishments to the private sector has
been doing the rounds for the last several months though no official policy has
been framed so far.
Several private companies have been voluntarily making provisions for
education, training and employment of handicapped and certain disadvantaged
groups but have expressed unwillingness for any reservation.93
Reservation : A competitive Casteism :
From de-toxification alias de-saffronisation drive of the ruling UPA
alliance to perhaps a calculated blunder on Census report followed by the
renewed debate on reservation and the government’s latest initiative to woo
the religious and linguistic minorities may appear otherwise a political fiction
but not in India’s context. World’s largest democracy still thrives on
communalism and casteism, denunciation of which is heard most of the time
by most of the political parties at the time of elections but only to the extent of
political philosophy that may have little relevance to their actions. After
forcing the BJP back on its Hindutva plank by the Census report that initially
gave the impression that Muslims, growth was outpacing the growth in Hindu
population, the government has opened yet another front - the Reservation
along with welfare of socially and economically backward sections among
religious and linguistic minorities.94

Vajpayee, A.B. (Ex. P.M.) On Yahoo India News dated Dec. 13, 2003,
Prof. Dang, Sunil. “Inflation: The Silent Killer, p. 1.
226

Extended reservations can lead to economic destabilization and social


divide:
The countrywide agitation on reservation has led us to observe anti­
reservation and pro-reservation our population in confrontation. Does it no go
to show that reservation is causing a social divide which is bad for the nation?
The Congress which formed the UPA government at the Centre getting only
145 sets in the House of Peoples, mastermind behind the extended reservation
move. To remain in power the Congress is out to appear to the people to get
their votes by giving them the lollipop of quota benefit, keeping party interest
over the nation the people should judge whether the Congress got the
sufficient mandate to take such a disastrous potential of destabilizing Indian
economy and cause a social divide. The congress is the oldest party of
country. However, it’s a pity that it has no sensible leader who could visualize
that the party’s preservation is likely to darken the future of the nation and
convince the party high command about.95
No job reservation in private sector :
“Reservation is not the objective but creation of avenues for
employment generation,” said Deveshwar, addressing his first news
conference since taking charge as president of the leading industry lobby.
Deveshwar, Chairman of ITC Hotels and member of the National
Manufacturing Competitiveness Council set up by the prime minister, said:
“We are embarking on a strategy for employment creation and not something
that will create short-term problems.”
“The corporate sector is not employment generators by itself as it accounts for
just a small share of the estimated 23 million jobs in the organized sector, with
the public sector accounting for 60 percent,” said Deveshwar.
“The corporate sector can help to create backward and forward linkages to
create competition and help generate employment”96

Dutta B.C. IRS (Retd.), Organsier dated June 18,2006 pp. 29/40.
Deveshwar, Y.C., (CII Chief) Business News only Punjab. Com. pp. 1-2.
227

The way social backwardness is tackled in India is simply ridiculous.


To get admission to professional colleges, to get into government services, the
Scheduled Castes and Scheduled tribes candidates need not score the
qualifying marks or even qualifications prescribed for general candidates. This
is the crude way of doing things. What one should do to tackle backwardness
is to provide the S.C.’s/S.T.’s candidates with liberal dose of financial
assistance and scholarships. In the case of Medical Colleges, you 'are training
future doctors who are responsible, for the lives of hundreds of thousands of
people. The job of a medical doctor needs a lot of intelligence, clarity of
thought, power of understanding, compassion, and what not? I do not intend
to tell that these qualities are available only with the general candidates. You
select the best from the available lot and then put them in for training. Forget
about the fact that this many S.C.’s/S.T.’s students are a must in each and
every M.B.B.S. batch. It is good that efforts are on to better the lives of the
socially backward communities. But the treatment should not be worse than
the disease.97
Job reservation in private sector to create confusion :
New Delhi : The government proposal for reservation in the corporate
sector industry and potential investors rather than create employment
opportunities for MK Sanghi, president of Assocham, pointed out that most of
the jobs created was in the organized sector, while 96.4% was in the
unorganized. Therefore, the government should not push hard for it and create
a conducive backward classes in the rural and semi-urban sector, says Mr.
Sanghi.
Analysing the implications of the reservations issue with its six promoter
chain when a chain of labour intensive industrial units are set up. In an era
when IT, major share of employment opportunities, to think of introducing
reservation Mr. Sanghi said that so far, the government. has been able to

97
Kumar Chellappan at E: mama|detaiIedstory,isp.htm.
228

provide employment 110 crore, of. the 34.3 crore, 2.3 crore are in the
QO

organsied sector, while 32 crore.


Reservations create a ‘creamy layer’-.
Moreover, reservations have created a what critics call a “creamy
layer” of Dalits and O.B.C.’s, or those whose families initially benefited from
reservation, gained upward mobility, and continue to capture these reserved
quotas for their kith and kin. “Reservations have created a middle class
among backward castes,” says Gurcharan Das, a former CEO of Procter &
Gable India, who frequently writes a pro-liberalization column in a leading
national newspaper.
“It is also an infringement on liberty,” says Mr. Das, arguing that private
institutions must be compensated if they are to reserve seats for Dalits.
“We all believe in providing equality of opportunity, but the principle of
reservation is wrong, because you don’t want to divide people on the basis of
anything other than merit”.
In recent months, industry stalwarts have written repeatedly to the
government, saying they prefer to promote educational opportunities by
providing scholarships to deserving candidates rather than through a blanket
reservation policy.
As former IIT director Indiresctn says, the private sector wants to follow the
American system of affirmative action, and not reservation.
“In affirmative action, the deprived are raised to required levels of
competence; in the reservation system, the level of competence is reduced to
accommodate what the beneficiary is capable of.”99
Rather than reservation in private sector make them entrepreneurs instead:
The Government’s focus should be on making entrepreneurs out of
large segments, of civil society, especially those belonging to Scheduled
Castes/Tribes or Other Backward Classes, rather than providing limited job

A report of Economic Times, India dated Sept. 7, 2004.


Das, Gurucharan, The Christian Science Monitor dated Feb, 13th 2006.
229

opportunities in listed companies. This will go along way in enhancing the


economic and social status of these segments, says R. Vaidyanathan.
A Debate is currently raging in the polity regarding reservations for Scheduled
Castes/Tribes in the private sector, similar to the one that is provided in the
government and the public sector. The demand is based on the issues of social
equity and also due to the possible, privatization of public entitles.
Whenever private sector is mentioned in our polity and in discussions among
the metropolitan elite it is assumed to be the listed companies of the private
corporate sector. Visibility and hyped exposure in the electronic media may
have contributed to this impression. Private corporate sector constitutes,
relatively a small portion of the national income, or 12-14 per cent.
Let us look at the employment statistics pertaining to the private sector. We
do not have separate statistics on the number employed by the private
corporate sector and proprietorship and partnership (P&P sector) forms of
organisations. Many companies do not provide information on the number of
people employed by them as they are not required to.100
Feasibility of Reservation in Private Sector :
In fact, reservation in the private corporate sector could have been
legislated in India from 1947 itself. And after all, a state claiming to be a
welfare state, concerned for the poor, regulating at the time every aspect of the
way companies carried on their business, including adoption of new
technologies and hiring and firing, could well have pushed for hiring policies
that included jobs for the main discriminated against social groups in India-
Dalits and Adivasis. There is certainly no legal bar on doing so. Any
company, domestic or foreign, doing business within a nation has to obey the
laws of that nation. However, hiring Dalits and Adivasis on a wide scale in
the corporate sector was one very conspicuous bit of legislative restriction
excluded from the scope of the otherwise all-pervasive “license-permit raj”.
The reason is not far to seek: for all the socialism proclaimed by the nation’s

100
Vaidyanathan, R. (Prof, of Inaman and Control I1M. Banglore) Business Line (The
Hindu Group), Aug. 12, 2004.
230

elite at the time, their mood was firmly against reservation policies, and what
came to be included in the Constitution was done so only through the pressure
of the anti-caste movement. The movement however, was not strong enough
to push further. Thus, in 1947, the question of “other backward castes” was
left hanging, and it was only the direct Government sector that was seen as an
appropriate place to insure opportunities for employment.
Clearly, compensatory discrimination efforts, or social justice
programmes, need not be limited to education and the public sector. In fact,
today as India is “going global” faster than many sections of the society want,
it is important to realize that a truly modern society requires the conscious
creation of opportunities for all of its citizens, and a truly competitive society
cannot afford to waste any talent. This means that social justice programmes
are not only in the interest of Dalits and Adivasis, but in the interests of the
nation as a whole - and they require policies that take account of every sector
in a modern and growing economy. Universalizing education and health care
is a crucial part of this; access to land and other property is necessary; but so
are special programmes ensuring access to employment - in the “private” as
well as the “public” sector. If liberalization is to be successful, the private
corporate sector cannot remain an island of “upper” caste privilege.
WHILE RESERVATION in the corporate sector is now a very strong
possibility, a major factor hampering all programmes of social justice in India
has been their extremely reluctant acceptance by the ruling elite. In spite of
Constitutional guarantees and official policies, ideas are still widespread that
somehow “reservation” and “merit” are opposites, and that programmes to
achieve “social justice” will slow down the development of a truly open,
caste-free, merit-based society.
The reality is that in a caste (or race) - affected society, only by
recognizing the disabilities of caste or race can true openness and mobility be
achieved. In a genuinely open and dynamic society, people of talent from
every social group, and from rich and poor alike would have a chance to rise
to the top. Such a society, however, has never truly existed in India; it exists
231

only as aspiration and hope. It has never truly existed in the U.S. either,
which is why programmes of “affirmative action” have had to be taken up
there why the fight for racial justice still goes on. For that matter, nearly
every country in the world has some form of discrimination, and the upcoming
United Nations Conference on the Elimination of all Forms of Racial
Discrimination in South Africa indicates that the effort to build a world-wide
open society still has to go on.
In India, the barriers to openness and merit have taken two main forms,
that of patriarchy or gender discrimination and that of caste discrimination.
Since the Indian form of patriarchy is largely affected by caste, we focus on
caste discrimination here. It is easy to understand how in the past birth was a
determining factor in a person’s life chances: those of castes considered “low”
had little right to education, little political power and small access to property.
Those classified as “untouchable” were even worse off than the ones
considered “shudras” in the official varna classification; they had no land,
were excluded from participation in nearly all public spheres of life, had not
even the glimmerings of a right to education, and had work opportunities
limited to the most polluting and arduous jobs.
But social justice and the creation of an open society is not really about
the past; it is about the present and the way discrimination operates today.
India has moved ahead in many ways in the 20th century; it has opened up
education and employment opportunities. Yet caste continues to be a
determining factor in social life, and caste and kinship networks very often
play a major role in access to employment. People of “low” castes, and
particularly the ex-“untouchables” still are deprived in many areas of rights to
equal participation in public life in simple things such as the right to drink tea
in a public tea shop-leave alone the question of owing the shop.
Employment is only partly the result of merit even in examinations and
interviews: it has a large element of “influence”. And for those trying to run
businesses, even very tiny ones, the role of influence and access to power is
even greater. These are direct factors of discrimination; indirectly, the limited
232

spread of education and the vast discrimination in land ownership and


property rights means that Dalits and the former “Shudra” castes (especially
those classified as “most backward”) do not even share the same starting line
as those from families and castes who have as background generations of
education, intellectual and entrepreneurial orientation and the economic
resources to back it up.
Those industrialists who have talked about a “level playing field” for
Indians in the sphere of international business competition, who have wanted
support to compete with multinationals, have rarely publicly discussed the
issue of how company ownership and company employment works in India.
While the sociological data on caste and economic achievement is rather
minimal, what studies we have show a heavy domination of upper castes.
Strikingly, Brahmans seem to be outdoing even the traditional “bania” groups
in industry today. There is still even a tendency to think in genetic terms, in
spite of the fact that nearly all scientific studies show little “natural” or
“biological” distinction among different social groups. In fact, it might be
said that if there is a genetic distinction between “upper” and “lower” castes -
which would assume that there has been almost no intermingling of genes
between the two groups over centuries - the advantage would be for the latter:
the arduous life that the deprived sections have faced would mean that only
those who are stronger and more intelligent would survive to pass on their
genes! However, there is little evidence for any such separation in India,
rather there is evidence for a good deal of intermingling between social groups
in spite of formal caste barriers.
What this means is that the apparent difference in “intelligence” and
“achievement” between “upper” and “lower” castes is a result of social factors
- of poverty, ill health, lack of education and all the other factors that have
served to smother the abilities and potentials of people from Dalit, Adivasi
and O.B.C.’s backgrounds. The result is that those from “higher” caste
backgrounds, with long traditions of education and intellectual activity behind
home, have advantages in developing their potential that the masses of people
233

do not have. This situation means that there is a vast wastage of “human
resources” in India. It should be of concern not only to Dalits and O.B.C.'s
themselves, but to any true nationalist.
It is often argued that globalization means that issues such as “social,
justice” and programmes to develop the talents and skills of the deprived no
longer have relevance. But the opposite is true. A closed-in nation with little
involvement and trade with the rest of the . world can afford to move along
slowly, to stagnate, to let the talent of its vast human population go to waste.
while a few take on responsibility for “guiding” the society. But an open
nation has to stand the test of competitiveness. And the fact is that trying to
compete with so much human deprivation continuing to exist is like trying to
engage in trade or. become a world power with a population of only a couple
hundred million, instead of a billion energetic, talented, people.
This is why programmes of social justice, including the
universalisation of education, access to property and resources, and the “talent
search” which we otherwise describe as reservations, all of them essentially
programmes to develop the talents and potentialities of the entire population,
should be of concern not only to Dalits and other deprived groups, but to
policy-makers and business leaders as well.
Reservation in Private Sector : some neglected dimension of national
debate:
One of the major objective of the Common minimum Programme of
the UPA Government was that the development of Scheduled Castes and .
Scheduled Tribes (S.C.’s/S.T.’s). In order to do, the UPA government was
sensitive to look into the issue of affirmative action, including reservations, in
the private sector. As democratic governance, the government initiates a
national level discussion with all political parties, industry and other
organizations to see how best the private sector can fulfill the aspirations of
S.C.’s/S.T.’ss thorough national dialogue.
This has regenerated immediately reactions (positive and negative)
from various comers. The industry and business house were the first to react
234

on this issue. They argue that, we cannot afford to compromise on efficiency,


which affect our competitiveness. We cannot compromise on merit.
Corporate sector does not go by colour of skin, caste or the last name except
only by merit. The media, except few radical, also did play a constructive
support or role in this regard to bring corporate voices and failed to address
people’s voice. On the other side Dalit leaders, organization and intellectuals
welcoming the decision of government, indicated that reservation in the
private sector as remedies for historical injustice and to correct social
economic inequalities.
This argument has been well supported by quite a number of
theoretical literatures and evidenced in various empirical studies. However,
argument of industry and business and other upper section of societies lack
understandings about the fundamental principles of our constitution equality
of opportunities. Further the concept of merit requires deeper understanding
of society in one live. Nobel Laureate Amartya Sen rightly pointed out that
the very concept of merit itself depend on the way we see a good society and
the criteria we invoke to assess the successes and failures of societies. Thus,
the theory of merit, he says, needs to draw on the other normative theories
includes economic inequality and sources of unequal social opportunities and
justice (See Amartya Sen on Merit and Justice in Kenneth Arrow et. al. (eds.),
Meritocracy and Economic Inequality).
In order to understand better, in days that follow, we would like to
discuss various issues that affect merit and economic inequality. We will be
focusing mainly on the following issues: First, what kind of society we live
and how one go through the processes to achieve merit or talent or in other
words, what determined ones merit. Second how relationship with economic
inequality and merit would generate efficiency? - the way the industry argues,
Third, the normative approach to address social inequality through equal
representation in economic activity can enhances skills of individual and
generates overall economics growth.
235

Myths about private sector reservation :


The Congress’s “national level dialogue” slogan, and the Maharashtra
government’s legislation on job reservations in the private sector have infused
new blood and hope among the unemployed Dalit youth. Dalit’s legitimate
right to reservations goes beyond the realm of the government sector. How
can the private sector justify its existence without adhering to the objectives of
the Indian Republic, which insists on restructuring Indian society on the lines
of justice?
What is, however, missing in this euphoria over “private sector
reservation”, is the limitation of the “emancipatory” role these jobs can play.
According to the Union Ministry of Labour (1999), the total work force in the
organized private sector was 86.98. lakh or close to nine million. At a
conservative estimate, low skilled, semi-skilled and unskilled workers add up
to more than three-fourths of the workforce of the Indian private sector.
The Dalits may be having a sizable presence here which is
proportionately more than their share of the national population. Thus, in
infact, the Dalits’ claim can be located in some two million white collar jobs -
their share through reservations being about five lakh. These are the jobs
(supervisors, clerks, professionals and managers) where the Dalit presence is
likely to be too little to write home about. The current position, insofar as
these five lakh jobs is concerned, is that they are already taken by non-Dalits.
Will the private sector, if it abides by the policy of reservations, calculate the
backlog and fill the vacancies?
Well, the government of India has not been able to calculate the
backlog vacancies for even primary level teaching positions in central schools.
So it would be far fetched to expect the private sector to excel in terms of
filling the Dalit quota where even the government has failed. What can be
expected from the private sector is that when it comes to making new
appointments, the share of the Dalits should not be overlooked. The number
of such vacancies would easily run into a few thousand in the best of times. If
we explore the business area, as we have been advocating, and which has been
236

dramatically removed by the Congress coalition, we find altogether a different


scenario.
By September 2003, there were 4,200 licensed liquor shops in Maharashtra. If
the Sushil Shinde government was really honest in empowering the Dalits, it
could allot 22.5 per cent of the licenses to Dalits, which comes to close to a
thousand. These 1,000- odd Dalits liquor shop owners can earn more than an
equal number of IAS officers. In addition, each Dalit liquor shop owner can
give additional employment to at least five other people to run his business.
Andhra Pradesh has 75,000 licensed liquor shops. If the present
Reddy government is serious on Dalit issues, it can allot about 1,700 liquor
shops to Andhra Dalits. Similarly, the PWD, Irrigation and Municipal
department’s farm out construction projects worth tens of millions in
construction to private contractors. Even if the smaller contracts, which run
into a few lakh each, are reserved for Dalit contractors, thousands of Dalits in
each state can become economically powerful. So is the case with the
Department of Health, where hospitals buy medicines worth several crore
annually. If a proportion of such purchases is set aside for Dalit chemists,
hundreds of Dalits in each state can make big money.
The Agra Dalit’s were the first to enter into manufacturing and made
big money. Many turned into millionaires by supplying shoes and belts to the
British army during World War II. That continued after Independence as well.
Agra became the centre of the Dalit movement in northern India. By the
1970’s or so, non-Dalit traders entered the field. They began to bag Army
tenders by buying in bulk from Dalit manufacturers. Slowly, they themselves
became manufacturers, forcing the Dalits to retreat. Dalits now supply raw
material to non-Dalit manufacturers. Why can’t the Manmohan Singh
government revive the policy and set aside a portion of the Armed Forces’
requirements to the Dalits? The million-strong Indian Army and paramilitary
and police buy shoes and belts worth several hundred crore every year. All
the above measures put shoes and belts worth several hundred crore every
237

year. All the above measures put neither any extra-financial pressure on the
treasury nor require any legislative action.
The public sector oil companies reserve 22.5 per cent of their petrol,
diesel, kerosene and LPG dealership for the Dalits. All the nine PSUs could
stimulate employment for lakhs of Dalits by introducing Supplier-Dealership
diversity for Dalits even in the areas of office equipment, electrical gadgets
and furniture. Sadly though, during its earlier four-and-a-half decades of rule,
the Congress couldn’t envision creating a strong business class from within
the community. And now, when the opportunity came, it has betrayed the
Dalits in a most ruthless manner.
Now the party leadership is selling the “private sector job quota”
dream, a repeat of the previous experience when it did not allow Dalits to
move beyond government jobs and become partners in the market economy.
An economically strong Dalit community can be a headache for the
mainstream polity, this they understand better than the Dalits.101
Govt, asks Indian Industries to opt voluntarily for quota:
New Delhi: The issue of reservation in private sector could hot up in
the days ahead with the government telling the business and industry to
voluntarily opt for it and not to force on it the option of a legislation.
“You have to do it amicably. I am the last person to do it by
legislation. Please don’t force me to a situation where we have to think of
legislation. I have great regard for captains of industry and they should do it.
I think they understand their moral responsibility, “Minster for Social Justice
and Empowerment Meira Kumar said.
Participating in Karan Thapar’s India Tonight programme on CNN-
IBN, she said that implementing reservation for the S.C.’s/S.T.’s in the private
sector was a “commitment” of the Congress-led coalition.
“Commitment is to both affirmative action and reservation.
Affirmative action includes reservation”, she said emphasizing that its
implementation was “not just a possibility but it is a commitment”.

101
Prasad, Chandrabhan, The Pioneer, June 23, 2006.
238

Kumar made it plain that she saw no way other than voluntary action
on the part of the industry or legislation. “I suppose there is no third way”.
The Social Justice Minister refuted suggestions that she was on a
collision course with business and industry on the issue and emphasized that
“we have to work with mutual co-operation”.
She dismissed as “too hypothetical” a query whether government
would drop the demand for reservation in private sector if the industry
succeeded in showing that it already employed enough number of people from
the deprived sections.
She regretted that the industry and business was “all the time doubting
the merit of S.C.’s/S.T.’s and said government has a “case” for the
downtrodden in the country in the for of its proposal.
When confronted with the latest National Sample Survey (NSS)
figures, which spoke of the S.C.’s/S.T.’s as also the O.B.C.’s getting
employment as per their share of the population, Kumar said that she was “not
suspicious” about the figures but the deprived sections are generally
considered for employment in lower categories.
To claims by certain industry organisations that several companies had
already employed sizeable people from the weaker sections, the Minister said
that the industry earlier was not even once ready to look into the composition
of its workforce despite her pleadings.
“The need of the hour is that we should find job opportunities to
S.C.’s/S.T.’s in the private sector, “Kumar said adding that the proposal in the
NCMP was only related to S.C.’s/S.T.’s and not for O.B.C.’s.102
Conclusion
Immediately after Union Human Resources Minister Arjun Singh aired
his views about the possibility of introducing reservations in institutes of
‘higher learning, speculation was rife that he had done so without consulting
the prime minister. Indeed, the prime minister had long expressed strong
views in favour of meritocracy rather than caste-based quotas.

102
Times of India, June I, 2006.
239

Going by Manmohan Singh’s comments at the CII’s National


Conference in Delhi, it appears there is less dissonance in the government on
this issue than one would think.
Where Arjun Singh spoke of quotas in education, the prime minister
has gone a step further. He thinks that the private sector would do well to
voluntarily consider affirmative action in jobs in order to make the employee
base “more representative.” This, he declared, was critical in order to build an
inclusive society.
Coming from the government’s highest level, the message to the
private sector is unambiguous: start applying your mind to this issue right
away; otherwise the government will do it for you.
At this stage, it is only a thought, tossed on the table for the
consideration of all stakeholders. Soon, it could become the law of the land.
This speculation is not as far fetched as it sounds. The Empowered
Group of Ministers, led by agriculture minister Sharad Pawar, has already
suggested that job reservations in the private sector could be made possible by
amending the Constitution and bringing in a new law. should the Cabinet so
decide.
There is a tendency in business circles to have a reaction against the
very notion of job reservations and quotas, and, rightly so. In any democracy,
the idea of one group getting preferential treatment over others is anathema to
the principle of egalitarianism.
That such groups should be chosen on the basis of caste further
militates against the republicanism India stands for.
But the private sector will be making an error if it believes it can wish
away the idea of some form of affirmative action. Instead of taking up
cudgels against the government, the leading minds of India Inc should offer
their own solutions, such as providing training and scholarships for the
disadvantaged.
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That way, the private sector can show it is no less concerned than the
prime minister about building an inclusive society. Meanwhile, the
government would do well to put to rest ail thoughts of legislating quotas.
The business class must realize that their arguments against reservation
basically stem from age-old prejudices in Indian society vis-a-vs the lower
castes. There is absolutely no rationale in them. There is no connection of
merit with reservation. Reservation never meant accepting anyone just on the
criterion of birth. Reservation simply means that a person having requisite
qualification for the job should not be denied, it just because he or she is bom
in a certain caste. Reservation does not have any connection with efficiency
too. The latter is an outcome of many variables such as organization culture
employee motivation system and processes technology training etc. Most of
these variable depend upon the management which is virtually monopolized
by the upper caste elites. If a person in the organization is not efficient the
onus must shift to the manager and not to an individual. Reservations do not
have any connection with foreign direct investments. The foreign investments
do not flow by seeing the caste of employees. For all these years when India
was exclusively ruled by brahmans and banias foreign investors did not even
look at it. They appear enamored with it today because of its huge market its
infrastructure its trained manpower available at paltry wages its high interest
rates, its political stability and consequently expectation of high rate of
returns. Who has created this market it is not a handful of upper caste
meritoritous’ people but evidently the majority belonging to meritless lower
castes. Reservations have certainly contributed in creating this market by
putting purchasing power in their hands. It may be easily seen that none of the
factors that attract foreign investments into the country depend upon a handful
upper caste people but on the contributions of vast masses.
After taking the debate on reservation in the private sector further there
is a need to rearticulate the concept of reservation in India. Much of the
opposition and resistance to reservation can be traced to their wrong
conception which even the supporters of reservation have not contested or
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corrected. The ubiquitous argument of merit mischievous advocacy for


reservations for economically poor, extension of reservation to the other
backward castes as implemented as or the Mandal Commission
recommendations, the argument of efficiency erosion of attractiveness of India
to the foreign investors etc. can all be seen clearly in its light. Reservation, in
viable terms can only be conceived as a Constitutional contrivance against the
disability of Indian society to treat dalits equally and justly. Any other way, it
will prove to be a veritable carrot that can be endlessly dangled before the
masses in order to engage them in perpetual cold war in the name of archaic
castes and communities. Moreover, only this premise can have a promise to
end reservation by removing the disability of the society any other way
reservation will remains perpetually contentious. This premise will clear
much of the confusion and motivate people to strive for annihilation of castes.
It will catalyze right appreciation of these policies and largely eliminate the
cause of social conflict.
If this conception takes root, it will be easy to reconcile that
Reservations cannot be artificially restricted to the government and Public
sectors and they should be applicable naturally to all the other sectors. Going
by the labour theory of value the lower caste people as the labouring class can
rightly stake claim to the entire wealth of this country'. But they are not doing
so. The upper caste elites better understand that it is the bom right of all such
people who are socially discriminated against to avail reservation.
Reservation in the private sector thus becomes just a correction to the basic
policy enshrined in the Constitution. Our Constitution unfortunately implies
the constricted premise for reservation. It may need correction by way of
suitable amendment. The Constitutional experts opine that reservation in the
private sector also cannot be implemented without an amendment to the
Constitution. It is in the interest of all that the rearticulated premise behind
reservation as suggested above is agreed and incorporated into the
.Constitution. Mere policy is never enough. There needs to be a genuine
political will backing the policy to get it implemented. This political will not
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come without pressure from the beneficiaries. The importance of potent Dalit
movement here gets underscored. Such a Dalit movement today may sound as
a far cry but then one should also reconcile that reservation in the private
sectors will also remain a far cry without a dalit movement. Dalits must
realize the limitations of any kind of reservation. The greatest damage
reservations have done to dalit interests is to effectively eclipse the dalit
struggle for emancipation. Paradoxically, it is the very struggle that can
create requisite political will for the effective implementation of reservation
too. The technological advances have lowered the employment elasticities to
near zero, which means that there is not going to be a big space for reservation
within the prevailing system. The capacity of reservation to benefit dalits can
be gauged from the fact that less than 1.7% of dalits have benefited from it
over the last 50 years. Notwithstanding the justification of all pervading
reservation until the societal disability is removed by complete annihilation of
castes, the talk of catalyzing dalit bourgeoisie in some circles is not saying the
same. Emergence of dalit petty bourgeoisie through the reservation process
has already been problematic: although nobody can deny its potential utility to
dalit movement. But promotion of the adversary parasitic class within shall be
absolutely suicidal to the dalit interests. There is no alternative for a potent
dalit movement against the present system with neoliberal (globalization)
ethos. There is no alternative to incessant dalit struggle for creating a just
world order.

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