[Written as a part of a project -2006. This was later published in Strategic Innovators in 2009]
Businesses need to maximise profits for shareholders and, therefore, require the freedom to hire people who best fit their needs, and not hire by fiat
“The goal of development is not to make the strong weak, but the reverse.”
What does reservation mean to a layman? Keeping aside the so called intelligentsia, the term is synonymous with Rajeev Goswami, V.P.Singh and his pet project “Mandalocracy …the (in) famous Mandal I ”. The episodes of the early nineties are still fresh in the memoirs of at least a few millions, the wide protest and demonstrations resulted in the prudent dropping of the project from the then Prime Ministers bounty.
"Let others fight for building the asset, we want fixed share of pie when it's built."
With the union HRD minister Mr. Arjun Singh announcing 27% reservation to the OBC (other backward castes) in addition to the existing 22.5% reservation meant for the SC/ST, the issue has raised serious eyebrows and of late has been highly debatable. The government’s announcement that it will implement up to 49 per cent reservation in IITs, IIMs and central universities is yet another example of the grotesque manner in which the state is destroying institutions of higher education. There can be no doubt that marginalised groups need to be given access to important institutions; there is also little doubt that the state has not done enough to create opportunities for marginalised groups. But it does not follow from this that an extra 27 per cent reservations for OBCs is a justifiable way of achieving these objectives. The proposed reservation are meant for seeking admissions to the premier educational institutions viz IIT’s, AIIMS, JNU,DU and other Central Universities supposed to be at par excellence. The Cabinet Secretary has returned the draft reservation bill that the HRD ministry had forwarded. Yet, the new reservation proposal has elicited strong reactions and opposition from across the country.
All this in accordance with the education reservation bill known as the Constitution (104th) Amendment Bill in Parliament piloted by Mr. Singh in December 2005, the Bill allowed for caste-based quotas up to 50 per cent. In addition to this Mrs. Meira Kumar, the Social Justice and Empowerment Minister in the UPA government is on her heels to seek job reservation for the SC/ST/ OBC in the private sector. The Common Minimum Program states, “All reservation quotas, including those relating to promotions, will be fulfilled in a time-bound manner. The Govt. is sensitive to the issue of affirmative action including reservations in the private sector. The government will initiate a dialogue with political parties, industry and other bodies on how best the private sector can fulfill the aspirations of SCs and STs. The Government will fulfill quotas in a time bound manner and to codify all policies on reservations, appropriate legislation will be enacted.” This particularly has been much against the likes of India Inc. The Prime Minister Dr. Manmohan Singh when confronted with stiff opposition from the corporate sector, on the issue relented by saying that the act of reservation would be voluntary and will not be forced on the private corporate sector. They (India Inc) have suggested to the government what has been aptly coined as “Affirmative Action”.
Quota (Reservation): A cure worse than the disease
The problem of equal rights and opportunities dogs every democracy, and India is no exception. The support of reservation in private sector, judiciary and armed forces portends major economic and social upheaval. It’s a point of irony to be studied that, Mr Manmohan Singh, the architect of India's economic liberalisation, on becoming Prime Minister, exhorted the corporate sector to adopt a policy of caste-based reservations. The Congress Government in Andhra Pradesh tried to test waters by declaring five per cent reservation for Muslims, which indeed became a blueprint for the UPA Government's policies. The Defence Minister has sent verbal instructions for providing 20 per cent quota to minority (read Muslims) community in paramilitary forces. “ The Armed forces should be at least kept out of this divisive and debilitating policy of reservation.” All these indicate the mere fact as to where are we heading for with this policy of reservation.
Obviously, the entire game plan seems on the face of it to be a well knit ideology It is but a prima facie that the jobs in the Government sector are shrinking. Economic considerations have forced the Government to even withdraw scheme of pensions for those recruited after December 31, 2001. Hence, proponents of reservation have now targeted the private sector. But the operational grammar of that sector is completely different. What needs to be taken care of at this juncture is that the definition of private sector has changed in the last 13 years (i.e. since early 90’s). Once synonymous with few industrial houses, MNCs and pharmaceutical companies, it now includes BPOs, call centres, IT majors, media companies and biotech to name just a few. Not only economy but also technology has changed dramatically. Does the scheme of reservation fit into this transformed world is a question to be brainstormed and pondered upon before jumping to any discriminatory solution .
India is poor out of choice:
Demands for reservation are indicative of a parasitic mindset that overlooks the gospel of construction, "Let others fight for building the asset, we want fixed share of pie when it's built." Moreover, the policy of reservation made more sense in government jobs that are relatively stable. However, private sector is characterised by retrenchment, closure, merger, acquisition and sell-offs. These can affect the fortunes of all employees including those who have gained entry through reservation. Private sector doesn't go by fixed rules of stipulated salary hike and timely promotions. It goes by performance, incentives and the ability to strike a deal with the employer. It is not compatible with reservation. "Brain Drain" occurred when the country offered no scope for employment for those who were both competent and educated. By sealing the prospects of employment in the private sector, we will create new section of "deprived people". Thus “Brain Drain “is a name of the past follies of the government‘s discriminatory policies seeking the benefit of the so called downtrodden and the destitute in the name of the aptly coined phrase” vote bank policy”. Of late as has been proposed by the human resource ministry perhaps with the blessings of the economist and reformist Prime Minister, the proposal in its present form could lead to a new socio-economic class namely the “deprived class”. The welfare of one segment of the society at the behest of another is surely at least on humanitarian ground is uncalled for. We should work towards an economically less disparate and socially more harmonious society.
Reservation has been a highly misunderstood concept or rather a phenomenon to suit the political biggies. Yet it remains a fact as ever that even the so called followers of the noble Dr. Bhim Rao Ambedkar have completely failed to unearth the philosophy of Babasaheb Ambedkar for the upliftment of the downtrodden and the destitute who were rightly termed as “Harijans “by none other than the Father of Nation “Mohan Das Karamchand Gandhi” whom we remember as Bapu. Babasaheb Ambedkar did not want reservations because he did not consider it the panacea for the emancipation of Dalits. He was himself a highly educated professional lawyer; and he wanted education, not reservation, to be the instrument of Dalit empowerment. But whether it is secularism or reservations, those who pretend to be the followers of Ambedkar, reinterpret him in the opposite manner.
“Reservations are crutches, we need social physiotherapy.”
For the last five and three fourth decades nothing much has been achieved for the alleviation of the needy class of the Indian society be it the SC/ST/OBC/GENERAL category. Except for the election manifestos that make it loud and clear the policies that will be undertaken by the political party (ies) under consideration if they happen to come to power for the next term , implementation is far deviated from the proposed. Yet a 360 degree development remains a distant dream. In the present economic order the positions of OBCs, SC&ST, and Dalits can be alleviated (which are mutually on antagonistic terms) by opening avenues for self-employment or generating regular business.
A peep into the past
The Janata Party Government (1977-79) had set up a commission under parliamentarian B .P Mandal. Its task was to undertake a study and suggest means to ameliorate the condition of the traditionally disadvantaged sections of society. It had suggested 27 per cent quota for OBCs and 22.5 per cent for SC & STs over the already existing reservations. The Indira Gandhi Government that followed and before which the report was presented, threw it into garbage bin. Mrs. Gandhi felt it would reinforce the caste divide in society that had been on the wane since Independence.
However, VP Singh; imposed the suggestions mentioned in the report, with the sole intention of getting even with his Deputy Prime Minister and rival in the National Front Government, Chaudhary Devi Lal. Mr. Singh's decision was not born out of concern for OBCs, but sheer political vendetta. The blazing protest against Mandal Commission in the cities of northern India split Indian society horizontally. No body wants a repetition of those days.
The Past… The Present
“While we believe in harmony and empowerment of all sections, it is neither economically nor socially viable to practice politics of reservation."
This is the current perception held by the youths of the present day generation….the peaceful protests by the medical students (to be read and understood as the best of the brains of India) are strong evidences for the above mentioned fact. “Yet the brutality shown by the police towards the peacefully protesting students marks our Democracy’s march towards Mandalocracy”. In a nutshell with regards to the present scenario that has come into effect because of the myopic decision of the government, with public hospitals at a standstill and medical students on the rampage,….…Human Resource Minister Arjun Singh has to ask himself a basic question: “Is there not a better way to work for the uplift of the backward castes, the minorities, the poor and every other underprivileged section of society, than by taking recourse to reservations?”
The caste based politics that is so very dominant has made the caste card a vital factor in the battle of the ballot. Most parties therefore prefer to jump on to the caste bandwagon rather than take a firm or a reasonable stand on any issue. “Therefore for reasons other than economic, reservations have continued even 57 years after independence.”
Lessons…
“Give a man a fish and he is hungry again tomorrow; give him a rod and teach him how to fish and he’s set up for life.”
The point is that professional politicians do not want to set people up for life. It is not possible to build a reliable, self-perpetuating vote-bank on the basis of teaching people to be independent. You cannot rely on their gratitude to vote you back to power time and again.
Nehru once wrote, “So these external props, as I might call them, the reservation of seats, and the rest — may possibly be helpful occasionally, but they produce a false sense of political relation, a false sense of strength, and, ultimately therefore, they are not so nearly important as real educational, cultural and economic advance which gives them inner strength to face any difficulty or opponent.” It is high time for the incumbent union Human Resource Development minister Mr. Arjun Singh, who wittingly profess to be a hardcore Nehruvian to get this lessons right on what once Pt. Jawaharlal Nehru himself remarked “ reservation…….a false sense of political relation”.
The current announcement also exemplifies the cynicism with which sections of government deal with education. In order to blunt the backlash against reservation, the government is announcing that the number of seats will be increased so as not to reduce the number of seats available in the general category. This is, what might be called, a pure statistical approach to education: increase the number of seats by government fiat, pride yourself on achieving numerical targets without any concern for quality, and make education a totem to be thrown around in mass politics. IITs, IIMs and some of our central universities are a few recognisable brand names left. But instead of ameliorating their problems, these measures will only impede their ability to carry out their mission. For instance, there is an acute shortage of faculty in the IITs and these institutions are already struggling to raise their research profile; our flagship institutions like the Delhi School of Economics are pale shadows of what they once were. In this context, to blithely raise the number of seats is to utterly disregard the conditions that make excellent institutions possible.
The decision should also be seen in the larger context of the debate over the autonomy and regulation of institutions of higher education. The very day the government made this announcement, the high court in Chennai has passed a controversial judgment considerably enlarging the powers of the AICTE over institutions that are deemed universities. This decision makes a travesty of the concept of a university, which among other things gave institution degree-granting powers. This erosion in the degree-granting powers of universities is part of the same trend that the decision to increase the number of seats exemplifies: let all decisions about whom to admit the criteria of admission and what should be taught, be taken away from educationists, teachers and students, and be put in the hands of political and bureaucratic masters, who will move according to their own political and administrative logic.
Nehru was right. Reservations have become a substitute for “real cultural, educational and economic advance”, a cheap way of displaying your commitment to justice while you connive in every way possible to make sure that the conditions that produce grievous injustice are not really overcome.
The real issue is how can we expand the supply of good quality institutions, and how can we ensure that social circumstance or financial deprivation does not prevent students from getting the best education they can.
Economic Sense and Non-Sense….
For reasons other than economic, reservations have continued even 57 years after independence. Apparently there is an economic reason behind the demand for reservations in the private sector. The rationale for such a demand is the belief that economic reform has replaced the government with the private sector as the key job-creator, and therefore reservations have to shift to where the jobs are. Nonetheless, this whole issue of reservations has stirred a hornet’s nest in the corporate sector which is just striving to become globally competitive. From the corporate perspective, the ‘reservation’ issue has unfortunately come at a time when the domestic market has been opened up and the manufacturing sector as a whole is looking at ways to downsize operations to become globally competitive.
Looking at the whole issue of reservations in a rational perspective there can be no two opinions that the underprivileged section has to be protected. But the question is: should reservation be the instrument to protect them? Considering the burgeoning unemployment – about 26 million people in India are estimated to be openly unemployed- should reservation be considered as an effective means to resolve this problem of unemployment?.
Merit and capability should be the yardstick. The concept of reservation without reference to merit can only have a distorting effect on the operations of the private sector. Besides, businesses need to maximize profits for shareholders and, therefore, require the freedom to hire people who best fit their needs, and not hire by fiat.
Experience is the greatest teacher on any issue we can lay our hands and brains on and reservation is no exception. Experience also shows that such a policy of reservation has not achieved dramatic results. Half a century of job reservation in government services has created only a thin creamy layer of the backward castes who have benefited. Moreover, although caste prejudice could be a barrier to employment, a bigger barrier is lack of education and skills. For centuries the members of the backward community were prevented from acquiring literacy or skills and this was a major cause of their subjugation.
“Affirmative Action” as proposed by India Inc has to be pursued at the base level and not at the apex level. However while stressing that the private sector has a role to play in fulfilling their social responsibilities, it must also be emphasized that making reservation in services compulsory does not seem to be an appropriate method. We do indeed need affirmative action, but certainly not through the failed route of job reservations.
Reservation is not an atonement of our past sins and should not be used to compensate for the damage inflicted in the past. However, instead of eradicating this injustice, we are further dividing the society and creating splits. We are trying to heal our past wounds by inflicting new ones. It is still a bitter fact that certain sections of the society are exploited and deprived of their rights. India is a country where wealth distribution is highly unequal. We are still living in a highly unjust social structure. Reservation acts as an antidote to an exploitative and unjust social structure known as the caste system. It fosters discrimination and plants the seeds of division in people's minds -- all this in the name of empowering and protecting the deprived sections of the society. Such division is against the cardinal principles of democracy.
Since there is a paucity of educational facilities like medical and engineering, such a privilege becomes a decisive turning point in the careers of several young and bright students. For the institutes, this means mean a fall in the revenue. Giving special privileges to someone merely on the basis of their birth into certain castes or tribes is unjust. People who have benefited from such biased treatment would advocate for more and foster caste sentiments in their minds. Those who have lost the opportunity in spite of having good credentials would start feeling bad about their upper caste credentials. This eventually leads to “The Great Indian ( Social) Divide”.
The benefits are so many and so palpable that the reservation policy has created a vested interest in backwardness. It seems like people want to be considered 'backward' rather than 'forward' in modern India! The more backward you are the more advantages you get. Reservation is now used as a tool for gaining more benefits. The area of reservation has been steadily expanding and newer backward groups and sections of society are mushrooming.
Since the reservation is meant for the minorities and the oppressed, the percentage of seats reserved should also be kept accordingly. Since reservation is meant for the deprived, showing such privileged treatment to the 'creamy layer' from among the 'backward' castes defeats the whole purpose. In fact, people from these creamy layers steal the reserved seats from their other backward counterparts for whom these reservations would have actually made a difference. However, an important and notable aspect is whether these reservations actually reach the people for whom they are really intended? Does reservation empower the deprived sections of the society or is it being misused?
The fundamental problem with the Indian economy is that the education system is one of the most flawed systems in the country. If there is one sector which is in dire need of reform, it is that education system. The most urgently required reform is to get the government out of it—lock, stock, and barrel. The recent move by the government to further increase quotas in the so-called elite institutions with a view to social justice is akin to scuttling the lifeboats even as the ship is sinking. The dysfunctional Indian education system is the saddest and costliest example of governmental ineptitude and malfeasance. The solution to the problem of the Indian educational system has to have at its core getting the government to let go of its chokehold on the system.
Mentality of scarcity and poverty:
The government of India does not believe in abundance. It treats the citizens as if they are incompetent children who will not be able to work out solutions for themselves without the patronizing paternalism of the socialistic control of every aspect of economy. There must be no subsidies for higher education. Higher education, for all intents and purposes from the point of view of an individual, is a private good. For those who cannot afford higher education even though they are qualified for it, they have to be given loans by banks and these loans have to be guaranteed by the government. The basic point is simple: the credit constraint that the poor face with regard to higher education can be released with little effort. This the government must do and if done competently, it will take only one generation for the every poor family to become non-poor. Reservation should and must not come into the picture at any point of time, it is no solution.
Allocating quotas and reserving seats for economically backward classes (and for other historically discriminated and disadvantaged groups) in higher educational institutions is economically inefficient, morally wrong, strategically flawed, and tactically ineffective. The policy does not help the underclass and ends up victimizing both the underclass and the so-called privileged class. The policy epitomizes what is called a “lose-lose” solution, while foregoing a “win-win” situation.
Neo- Welfare Economics of reservation:
All economic policies create gainers and losers. If the gainers gain more than the losers lose, then it is theoretically possible for the gainers to compensate the losers for their loss so that after the compensation, the losers are not any worse off than before and the gainers are better off than before. This is in accordance to Prof. Kaldor and Hicks Compensation Principle to do away with the Pareto Indeterminacy. Such a policy effects what is a called a “Pareto improvement” and is therefore an economically efficient policy. Conversely, if the losers lose more than the gainers gain, then the policy is economically inefficient and there is an overall welfare loss.
Quotas, if they have any effect on the system, effectively replace qualified candidates with otherwise unqualified candidates. Unqualified candidates who enter the system are by definition unable to benefit from the opportunity to the extent that a qualified candidate would have done. The quota candidates are unable to compete within the system. Aside from the welfare loss in terms of wastage of real resources, the quota students suffer psychologically. This reinforces the perception—within both groups—that the group which enjoys the quota is intrinsically inferior. This is perhaps the most pernicious of all the unfortunate effects of a quota system in higher education.
This brings us to the point why quotas in higher education for disadvantaged groups is morally repugnant policy. It penalizes certain people based on their group membership. Discrimination based on caste, creed, origin, color, etc, is morally wrong. So is reverse discrimination. The right thing to do is to remove discrimination, not impose it from up on high.
The Dual Aspect of the Problem and its Proposed Solution:
The two facets of the problem are:
Seats are limited. If they were unlimited, there would have been no need for quota. They are limited because the government does not allow free entry into the higher education business.
Students from certain groups are unable to gain entry into the supply constrained system, and once inside they are ill prepared to compete within the system. If they were qualified, they would not need quota protection in the first place, and would be able to compete once there.
Get the government out of the business of controlling the supply of higher education. It is undeniable that certain segments of the population are ill prepared to compete for seats in higher education. The fact is that they have not had the opportunity to prepare themselves for higher education. The solution therefore is that they have to be provided help in preparing for higher education, which basically means that they have to be given assistance at levels that precede higher education. They are handicapped at the level of higher education because they are handicapped at the earlier stages of education. If their handicap in the school level is addressed, there is no need to make special provisions for them in the post-school levels. The policy makers need to understand the distinction between the equality of opportunity and the equality of outcome: the former is a necessity for social justice and can be obtained, while the latter is neither possible nor desirable.
Quotas are economically inefficient. Merely increasing the numbers from these groups by fiat will do no good, and indeed may end up harming the groups. “Robbing Paul to feed Peter” is no solution to the continued existence of the politically motivated social evil. The evil in all its present form is the manifestation of the political vendetta of the political parties which grab the power. The nation can no longer withstand the social division based on discriminatory grounds. The social welfare has to be undertaken with due courtesy paid to the “Social Welfare Function” as proposed by Prof. Bergson and the recommendation on the same made by Prof. Arrow.
Concluding Words…
To end I quote Pt. Jawaharlal Nehru “ I dislike any kind of reservation… if we go in for reservation on communal and caste basis we (will) swamp the bright and able people and remain second –rate or third rate….the moment we encourage the second rate we are lost ….this way lies not only folly but disaster.” 1990 Mandal I… 2006 Mandal II…. A deeply divided India awaits the views of the Supreme Court of India.
