19thaprial
Debate on Private Sector Reservation
Myth and Reality
Sukhadeo Thorat and Arayma
Introduction
Faced with intense group structured inequality and deprivation associated with caste
system and institution of untouchability and the urgent need to correct these
inequality, the India state has made explicit use of multiple remedies against
discrimination (in the form of legal measures and Reservation policy) in
employment, education and political and civil spheres . This policy however remained
confined to a tiny government and public sector only and vast private sector
comprising agriculture; industry and service sector in which more than 90 percent of
SC/ST are employed remained out side the preview of the reservation policy.While
in other countries such policy has to begin with has been used both for public and
private sector .
Narrowing down of already tiny public sector due to privatisation and selective
withdrawal of the state under policy of liberalisation serious concern have been
expressed about the significance of public sector reservation policy. There has been a
growing demand particularly by the dalits for some kind of reservation policy for the
private sector inside and outside parliament .2 As results of these demands initiatives
have been taken by the government. First such initiative was the M.P. government
decision in 2002, to provide a share to the SC/ST in the government contract3 The
Maharashtra government went a step ahead and passed Act for reservation in private
sector employment.. More importantly, the private sector reservation finds an
approval in Common Minimum Program .The present United Progressive
Government has set up Standing Committee to arrive at some workable policy of
reservation for private sector .But before any such decision is taken , the government
calls for national dialogue to develop a common coconscious on this issue.4
Ever since the government has expressed the need for dialogue , views have been
expressed by different section of Indian civil society- by academicians , persons
from Corporate sector , and media , and by political leaders ,which often are
opposite to each .A voluminous literature has appeared in short span of time ,which
indeed revealed the inner mind of Indian civil society on one of the important issues
confronting Indian society ,namely of finding solution to overcome the historical
deprivation and continuing discrimination of former untouchables .
In this volume we have put together about forty papers –short and long appeared in
academic journal, news papers, websites and paper presented in the seminars .Since
our purpose is to capture the opinion of various sections in Indian Civil society we
included the papers which covered all shade of opinion-both for and against .In this
introduction we present the central arguments of these paper .
Drawing from theoretical and empirical literature we also discuss the concept of
exclusion in general and caste and untouchability based discrimination in particular ,
their consequences on the minority group of untouchable and the possible remedies
against discrimination used else where in the world and in India and suggest set of
remedies against discrimination in private sector in India .
We address some of critical questions and issues that appeared in the current debate
on reservation .: Why we are concern with discrimination? Are the concerns about
discrimination related to only equity or it also involve economic and political cost?
hat are the views of corporate sector and other sections on these issues? How sounds
are the arguments against anti-discriminatory policy for private sector that appeared
in the current debate?
Section I
What is Exclusion and Discrimination?–Insights from Theoretical literature
In this section, we elucidate on the concept of caste and untouchability-based
exclusion and discrimination, and try to capture the societal processes that caused
exclusion and deprivation and poverty among the discriminated groups of former
untouchables . In social science literature the concept of social exclusion is defined as
“the process through which individuals belonging to some groups are wholly or
partially excluded from full participation in the society in which they live” (Arjan De
Hann 1997). Hann argued that this definition focuses on the processes responsible for
deprivation, in relation to the means that exist within a society. Two defining
characteristics of exclusion are particularly relevant, namely, the multiple aspect of
discrimination and the societal processes and the institutions that cause deprivation.
It is therefore, important to recognize the diverse societal processes and institutions in
which social exclusion can cause discrimination and deprivation and poverty for the
excluded and discriminated groups. Consequences of exclusion thus, depend crucially
on how the institutions function, and how exclusionary and discriminatory they are in
their outcome. Amartya Sen draws attention to the various meanings and
manifestations of the concept of social exclusion (Sen 2000). Among them Sen draws
distinction between the situation where some people are being kept out (at least left
out), and where some people are being included (may even be forced to be included)in deeply unfavorable terms, and described the two situations as “unfavorable
exclusion” and “unfavorable inclusion.” The “unfavorable inclusion”, with unequal
treatment may carry the same adverse effects as “unfavorable exclusion”.
Further elaboration of the concepts of exclusion or discrimination comes from the
mainstream economics in the context of race and gender. This economic literature
throws more light on discrimination that works through markets, and developed the
insights with some analytical clarity. The initial research centred around mainly on
the gender and race discrimination in hiring and wages, but later the concept was
extended to cover other markets or non-market transactions as well. In the market
discrimination framework, exclusion may operate through complete exclusion in
various markets, and/or through “selective inclusion”, but with an unequal treatment
in market and non-market transactions or what Sen would describe as unfavourable
inclusion`.
These developments in social science literature have indeed contributed immensely in
understanding the various meanings and manifestations of the concept of social
exclusion, and its applicability to caste based exclusion in India. The manner in which
it has been conceptualised in economics , the concept of social exclusion essentially
refers to the processes through which individuals or groups are wholly, or partially,
excluded from full participation in the society in which they live. It emphasizes on
two crucial dimensions namely the “institutions” (of exclusion), and their “outcome”
(in terms of deprivation).Therefore
in order to understand the dimensions of
exclusion, it is necessary to understand the societal processes and institutions, which
lead to exclusion of certain groups . The exclusion-induced deprivation may operate
in multiple spheres- civil, cultural, political, and economic.
For a broader
understanding of the concept of exclusion, the insights in to the societal process, and
institutions of exclusions are as important as the outcome in terms of deprivation for
certain groups.
Caste/Untouchability based Exclusion and Discrimination
In India, exclusion revolves around the societal processes and institutions that
exclude, discriminate, isolate, and deprive the minority group on the basis of caste
identity . The nature of exclusion revolving around the caste system therefore needs
to be understood and conceptualized. Historically, the caste system has regulated the
social and economic life of the people in India. A body of literature and particularly
the theoretical formulations by economists recognize that in its essential form, caste
as a system of social and economic governance or organization (of production and
distribution) is based on certain customary rules and norms, which are unique and
distinct. In general, the caste based society and economy is one in which property
rights
( or occupation) are hereditary, compulsory and endogamous. The
organizational scheme of the caste system is based on the division of people in social
groups (or castes) in which the civil, cultural, religious and economic rights of each
individual caste are pre-determined or ascribed by birth and
made hereditary. The
assignment of civil, cultural, and economic rights, however
is, unequal and
hierarchal. The system also provides for a regulatory mechanism to enforce the social
and economic organization through the instruments of social ostracism (or system of
social and economic penalties), and reinforces it further with the justification and
support from the philosophical elements in the Hindu religion (Lal 1988, Ambedkar
1936 and 1987). It is these
and stubborn
features which make the institution of caste more rigid
for a change .
The caste system’s fundamental characteristics of fixed civil, cultural, religious and
economic rights for each caste by birth , with restrictions for change implies “forced
exclusion” of one caste from the rights of other caste. Exclusion in economic spheres
such as occupation and labour employment, is therefore, internal to the system, and a
necessary outcome of its underlying principles. In the market economy framework, the
caste related occupational immobility (or factors immobility ) would operate through
restrictions in various markets such as land, labour, credit, other inputs, and services
necessary for any economic activity..
In the light of the above, the caste and untouchability-based exclusion and
discrimination can be categorized in the economic, civil, cultural, and political
spheres as follow . ( Thorat 1999)
(1) The exclusion and the denial of equal opportunity in economic spheres would
necessarily operate through markets and non- market exchange.
(2) Firstly, exclusion may in labour market operate through denial in hiring for
jobs; in capital market through the denial of access to capital; in agriculture
land market through the denial in sale and purchase or leasing of land; in input
market through the denial in sale and purchase of factor inputs; and in
consumer market through the denial in sale and purchase of commodities and
consumer goods;
Secondly, discrimination may occur through what Amartya Sen would describe as
“unfavourable inclusion”, namely through differential treatment in terms and
condition of contract, one of them would reflect in discrimination in the prices
charged and received by discriminated groups. This can be inclusive of the price of
factor inputs, and consumers goods, price of factors of productions such as wages for
labour, price of land or rent on land, interest on capital, rent on residential houses,
charges or fees on services such as water, and electricity. Discriminated groups can
get lower prices for the goods that they sell, and could pay higher prices for the goods
that they buy, as compared with the market price or the price paid by other groups;
Thirdly, exclusion and discrimination can occur in terms of access to social needs
supplied by the government or public institutions, or by private institutions in
education, housing, and health, including common property resources like water
bodies, grazing land, and other land of common use; and
Fourthly, some groups (particularly the untouchables) may face exclusion and
discrimination from participation in certain categories of jobs (the sweeper being
excluded from inside household jobs such as cooking or others), because of the notion
of purity and pollution of occupations, and their engagements in so-called unclean
occupations.
(1)
In the civil and cultural spheres, the untouchables may face discrimination
and exclusion in the use of public services like public roads, temples, water
bodies, and institutions delivering services like education, health and other
public services.
(2)
In the political spheres, the untouchables may face discrimination in use of
political rights, and in participation in decision- making process.
(3)
Due to the physical (or residential) segregation, and social exclusion on
account of the untouchability (or touch-me-not-sm), they may suffer from a
general societal or living mode exclusion ..
(4)
Since there is societal mechanism of social ostracism to regulate and enforce
the customary norms and rules of the caste system, the untouchables
generally may face opposition in the form of social and economic boycott,
violence, and act as a general deterrent to their right to development.
This overview of the meaning of the concept of the “exclusion” in general, and that of
caste-untouchability based exclusion and discrimination in particular, brings out it
various dimensions. The caste and untouchability-based exclusion and discrimination,
essentially is “structural in nature”, and it involve denial of equal opportunities,
particularly to the excluded groups like former untouchables in multiple spheres . The
denial of rights results in lack of access to
discriminated group of
resources,
education ,civil, and cultural rights which are necessary for growth of being .
Economic consequence of caste discrimination
Why the government in developed and developing countries are concerns about
social and economic discrimination? Is discrimination only an equity issue , or it
also involve economic cost to the society ?Are the costs it imposes on the society
more social and political than economic? The insights of mainstream theory
economic discrimination indicate that economic discrimination ,particularly the
market discriminations do hampered economic growth ,bring unequal income
distribution and deprivation for discriminated groups and create potential situation
for inter-group conflict .(Nancy Birdsall and Richard Sabot 1991)
The caste system’s
fundamental characteristic of ascribed and compulsory
occupations, concomitantly fixed with economic rights for each caste, implies
‘exclusion’ of one caste from undertaking the occupation of another caste. In the
market economy framework the occupational immobility operates through restrictions
on mobility of factors such as land, labour, credit, other inputs and services necessary
in any economic activity.. Immobility of labour and capital under caste wise division
essentially means segmentation of occupationally segregated and imperfectly (though
not completely) immobile market situation. . The immobility of labour and capital has
implication for efficient working of the economy and income distribution.
First let us take the likely impact of caste based market discrimination on performance
of economy. In the overall framework of the mainstream economics the competitive
market situation is necessary pre-condition for efficient working of factor and
product markets and for optimum economic outcomes and that any deviation toward
imperfection produce inefficiency in resource allocation and generate sub-optimal
economic outcomes. Therefore caste system’s fundamental feature of fixity of
occupation and restrictions on the movement of factors of productions, particularly
labour and capital brings immobility and imperfections in these markets. Immobility
of caste wise division of labour and capital produces occupationally segmented and
imperfectly mobile labour, capital and other markets .Due to these restrictions on
mobility the labour, capital and other factors do not move from the economic
activities of low return to the activities of higher return to labour and capital.
Consequently the economy would operate at lower level than in a perfectly
competitive market situation. In its ultimate outcome the economic efficiency of the
caste economy would certainly be lower than the one posited in the model of perfectly
competitive market.
The another consequences of fixity of occupation to which Ambedkat and Akerlof
draw our attentio relates to employment. By putting restrictions on the mobility of
labour, and thereby, not permitting readjustment of employment, caste becomes a
direct cause of ‘voluntary unemployment’ among the high castes and ‘involuntary
unemployment’ among the lower castes. The high caste Hindu’s generally prefer to be
voluntarily unemployed for some time rather than taking up an occupation not
assigned to them. On the other hand, for the low caste untouchables the restrictions to
take other caste’s occupation compel them to remain involuntarily unemployed
(Ambedkar 1936, Akrolof 1980).Ambedkar observed
“If a Hindu is seen to starve rather than take to new occupations not assigned to
his/her Caste ,the reason is to be found in the caste system.By not permitting
readjustment of occupations the caste becomes a direct cause of much of the
unemployment we see in the country”( Ambedkar 1936 ) 3
Yet other consequences to which Ambedkar draw our attention is the impact of a
particular notion of social status or prestige attached to occupation .In a typical notion
of purity and pollution, some of the occupations are considered polluting and impure
and socially degrading. The social stigma attached to these occupations reduces the
social status of persons engaged in an occupation. Such a notion of occupation does
indices job satisfaction to people and become the source of aversion, ill will and the
desire to malinger from work. In this context, Ambedkar observed:
“There are many occupations in India which on account of the fact that they are
regarded as degraded by Hindus provoke those who are engaged in these occupations.
There is a constant desire to evade and escape from such occupations which arise
solely because of the blighting effect which they produce upon those who follow them
owing to the slight and stigma casting on them by the Hindu religion. What efficiency
can there be in a system under which neither men’s hearts nor their minds are in their
work?”,” (Ambedkar, 1936 page 48).
Insights from economic theories therefore, clearly indicate that market discrimination
has multiple negative consequences .It reduces efficiency and economic growth,
generates inter-group inequality and unequal opportunities to individuals, all of which
cumulatively create a situation of high deprivation and poverty particularly among the
low caste untouchables. It also has serious consequences on income distribution
and right to individual development ,all of which cumulatively have poverty-inducing
consequences particularly for the low caste untouchable.
Remedies against Discrimination –Free Market versus Interventionist Policy
Reducing economic discrimination thus become unavoidable because it is likely to
increase economic growth, provide an equal access to discriminated groups, reduce
inequality between groups and minimise the potential for conflict to which inequality
between groups may give rise to. What are the remedies against market
discrimination? Conclusions regarding the consequences of market discrimination on
economic growth and income distribution are derived from the main stream economic
theory. The same theory also predicts that, in highly competitive markets,
discrimination will prove to be a transitory phenomenon as there are costs associated
with discrimination to the firm/employer which results in lowering the profits.
Firms\employers, who indulge in discrimination, face the ultimate sanction imposed
by the markets. This theoretical perspective thus sees the resulting erosion of profits
as a self-correcting dimension of discrimination.
The free market solution is not however, a practical remedy, as for number of reasons
market discrimination particularly the labour market discrimination might persist over
long periods with or without prevalence of free market situation. The persistence over
decades of labour market discrimination in high income countries attests to that .First
is that even if competitive situation prevail, it is not a sufficient condition for the
elimination of discrimination if all the employers are discriminators. Therefore,
discrimination will still continue. Secondly in any case developed as well as
developing countries, markets are not competitive but mark with wide spread
presence of imperfection –monopolistic and oligopoly market situation which
provide enough power indulge in discrimination at will. These two theoretical view
points have obvious policy implications.
Those who believe that discrimination is indeed self-correcting would argue in favour
of strengthening competitive market mechanism. But if discrimination continues to
persist despite the presence of competitive market process, (which in reality is the
case) or for other reasons mentioned above the market interventionist policies will be
necessary. On the inevitability of the interventionist solution, I can not do better than
quote Shulmen and Darity (1989), who have summarized the two views so
eloquently:
“The analytical stance of the main stream neo-classical economists is charateristized
as methodological individualism and it presumes that economic institutions are
structured such that society-wide outcomes result from an aggregation of individual
behaviours. It presumed that if individuals act on the basis of pecuniary self-interest
then market dynamics dictate equal treatment for equal individuals regardless of
inscriptive characteristics such as race. Consequently, observed group inequality is
attributed to familial, educational, or other background differences among
individuals who are unevenly distributed between social groups. The causes of a
dissimilar distribution of individuals between social groups may be genetic, cultural,
historical, or some combination thereof. The differences in cultural attributes include
the value families and neighbourhoods place on education, attitudes, and work habits.
The historical refers primarily to the impact of past discrimination on current
inequality. In contrast, economists who may be classified as methodological
structuralism do not accept this interpretation. Structuralism as an analytical method
holds that aggregate outcomes are not the result of a simple summation of individual
behaviours, but rather arise from the constraints and incentives imposed by
organizational and social hierarchies. In this view, individual behaviour achieves its
importance within the context of group formation, cooperation, and conflict.
Economic and political outcomes are thus a function of the hegemony exercised by
dominant groups, the resistance offered by subordinate groups, and the institutions
that mediate their relationship. Discrimination, in this view, is an inherent feature of
economic system. Competition is either not powerful enough to offset the group
dynamics of identity and interest, or it actually operates so as to sustain
discriminatory behaviours. Discrimination is due to the dynamics of group
identification, competition, and conflict rather than irrational, individual attitudes.
Market mechanisms, far from being relied upon to eliminate discrimination of their
own accord, must be scrutinized and pressured to further the goal of equality of
opportunity”.
The policy implications of this view on persistence of discrimination are obvious.
Since the markets will continue to operate in imperfect manner the discrimination will
persist. It will also persist even if market forces are competitive in nature under
situation where every farm practice discrimination and which is likely to be the
normal phenomena. It therefore calls for intervensitic policy as safeguards against
discrimination. The remedies against discrimination through market interventions in
the form of reservation /affirmative actions are required in various markets like land,
labour, capital, produce, consumer and social services such as education, and housing
as the discriminated groups face discrimination in exchange carried through market
and non market channels.
Section II
Current Debate on Reservation in Private Sector
Insights from economic theories of caste system indicate that market discrimination
is a typical case of market failure and brings huge economic inefficiency and
adversely affect prospect for the economic growth, involve unequal opportunities to
discriminated group - all of which cumulatively create a situation of high deprivation
and poverty particularly among the low caste untouchables.
The policy implications of the theoretical views call for market intervensitic
measures to over come market failure associated with caste discrimination and to
make them work better, both for promoting economic growth and ensuring fair access
to the discriminated groups not only to employment but also to markets in agriculture
land, capital, products, consumer goods and social services such as education, and
housing and other exchange carried through market and non market channels.
In the lights of these insights from theories we now analysis the points of views
expressed in the current discussion and in the papers included in this volumes in the
context of dialogue on reservation in private sector. It is rather difficult to capture the
various views expressed in this paper, therefore we focus on some important issues
which have been the centre of controversy among the different groups of Indian civil
society such as person from corporate sector, the Association of industries,
academicians, political leaders and persons from media.
The issues include arguments in favour of reservation in private sector on the
grounds , that private sector follow discriminatory hiring practices, that there is need
to remove inefficiency cause by market discrimination , that the private sector
received support from government and they have social obligation, that there is thin
line between private and public spheres ,so there is lot of public aspect to what is
called as private , and that there is social responsibility of Corporate sector toward the
marginalised groups and to address the issues emerging from the social structure ,and
encourage diversity in labour forces .
The issues that are posed against reservation policy for the private sector in some
papers vary from complete opposition to reservation policy for private sector on the
grounds that reservation is an interference in the free working of market ,that
employment of persons from discriminated group presumably with lower
qualifications hamper productivity and efficiency ,that the reservation policy in public
sector has achieved limited success ,and similar policy for private sector will not
help the poor ,and that alternative remedies related to education ,skill development
and entrepreneurship should be better alternative . .
Equal Opportunity Arguments
Ambedkar Position –Looking back in to the origin
First we discuss the arguments in support of remedies against discrimination that are
mainly based on denial of equal opportunity due to practice of caste and
untouchability based exclusion and discrimination to untouchable and seeking
provision for equal rights ,safeguards against violation of equal rights and strategies
for equal access or opportunity through reservations or affirmative actions .
In order to get insights in to whole range of issues, it is necessary to go back to the
formative stage of reservation policy in India for which systematic intellectual efforts
were made by Ambedkar ,who articulated the Reservation policy from 1919 through
1947. Ambedkar’s efforts began in 1919 and carried through the 1930’a and 1940’s
till the reservation policy was finally accepted in the present form in 1947.(4 ) .
Systematic articulation of arguments in favour of remedies against caste
discrimination were spell out in Ambedkar’s, first statement submitted in January
1919 to Soughborough Committee ,at the time of the reform of Government of Indian
Act 1919.About ten year latter in May 1928 ,when second attempt was made to
revise Government of India Act ,during 1930/31 through series of Round table
conferences ,Ambedkar submitted two Statements ,one to the Simon Commission in
May ,1928 and another , two years latter in 1930, in First Round table conference.
The final statement came in 1947 in the “State and Minorities –What are their rights
and how to secure them in the Constitution of free India” at the time of framing of
India’s constitution .These statements indeed provide insights in to the evolution of
reservation policy for Scheduled caste. (see Annexure 1 and 2) .An analysis of these
documents provide insights in to the origin of reservation policy in India and also
lessons for the present discussion on private sector reservation. In their intellectual
exercise these documents are basic to the understanding of the malady of Hindu
society and the remedies proposed by Ambedkar against denial of equal opportunity
to untouchables . (See Ambedkar 1919, 1930 and 1947)(6)
From these writings in the 1920 through 1940’s it become clear that Ambedkar
grounded the case for remedies against discrimination of untouchables in citizen right
framework. In the first systematic written statement, “Evidence before the
Southborough’s Committee” for Constitutional Reform in January 1919 he argued”
“The enforced servility and bar to human intercourse, due to untouchability
.involves, not merely discrimination in public life, but actually works out as a positive
denial of all equal opportunity and the denial of those most elementary of civil rights
on which all human existence depends” and further observed
“.Not only the untouchability arrested the growth of personality of untouchables but
also comes in the way of their “material well being. It deprived them of certain civil
rights ----The untouchable is not even a citizen. Citizenship is bundle of rights such as
personal liberty, personal security, right to hold private property, equality before law,
liberty of conscience, freedom of opinion, and speech, right of assembly, right of
representation in country’s Government, and right to hold office under the state”.-The untouchability of untouchable puts these rights far beyond their reach .”(Evidence
before the Southborough’s Committee”1919 page 256 and 261) 5.
Substantiating the claim before the Simon Commission Ambedkar argued, about
thirty year later in 1928 at the time of reform of Indian Government of India Act
“—Depressed classes cannot be employed in the army, navy, and police because such
employment is opposed to the religious notion of majority. They cannot be admitted
in schools, because their entry is opposed to the religious notion of majority. They
cannot avail themselves of Government dispensaries, because doctors will not let
them cause pollution to their persons or to their dispensaries .They can not live
cleaner and higher life, because to live above their prescribe station is opposed to
the religious notion of majority.” Ambedkar add that
“So rigorous is the enforcement of the social code against the Depressed classes that
any attempt on the part of Depressed classes to the exercise their elementary rights
of citizenship only ends in provoking the majority ,to practice the worst forms of
social tyranny known know n to history .’(Statement to Simon Common ,1928 ,pages
445) “
Repeating the same argument in First Round table conference in Plenary session on
November 1930 Ambedkar argued
“What is worse that this servility and bar to human intercourse ,due to their
untouchability ,involves ,not merely the possibility of discrimination in public life ,but
actually work out as a positive denial of all equality of opportunity and the denial of
those most elementary of civic rights on which all human existent depend”(Plannary
Session ,20 November 1930 ,First Round Table Conference ,page 504).
And finally in 1947 while justifying the need of safeguards against discrimination for
the scheduled caste in the constitution of independent India Ambedkar argued
“.Unequal treatment has been the inescapable fate of the untouchables in India .—and
added that in country like India where it is possible for discrimination to be practiced
on a vast scale and in a relentless manner fundamental rights have no real meaning
for untouchables . “ ( State and Minorities 1947,page 406 to 407).
Thus close look at the four memorandum prepared and presented by Ambedkar in
fact capture his understanding about the problem of untouchables ..In his view the
problems of untouchables is rooted in denial of basic human rights to them , which
are essential for the growth of human being .Therefore Ambedkar grounded the
justifications for remedies against caste discrimination of untouchables on the
consideration of denial of citizenship rights .
We also see broadening of solution ever since Ambedkar first articulated it in 1919
,which in later years took a definite shape in 1947.Ambedkar suggested multiple
remedies, to be used in combination to ensure equal opportunity and to ensure fair
access and participation to the untouchables in the social, ,political and economic
process in the society . In a sequence these include first the provision of equal rights
to all , legal safeguards against violation of rights in term of punitive measures,
measures to ensure equal access and participation (through Reservation policy) in
civil, political and economic spheres ,and in addition a definite strategy by the State
for the development and empowerment of untouchables to compensate for exclusion
in the past. Ambedkar also emphasis on monitoring mechanism to implement and
supervise the measures and the participation of untouchables in policy and decision
making and monitoring .
Let us discuss the logic and reasons behind each of these measures.
(a) Equal Rights - Guarantee of the equality before law and possession of equal
rights common with other citizen of India in all public spheres was suggested as an
initial pre-condition. This requires an abolition of customary laws govern by
institution of untouchability and caste system.
(b) Legal safeguards against violation of rights
Guaranteeing equal rights, however is not enough, unless they are accompanied by
adequate legal safeguards and protection when the rights are violated.. Ambedkar
argued that equality of opportunities is impossible under the Indian societal situation
which does not recognised equality and attempts by untouchables to secure equal
rights are opposed by high caste . The equality of opportunity is also opposed by
those in the government, particularly the executive and civil service . There fore
remedy is not only that untouchables have equal rights that every community has,but
that there is a mechanism which provide legal ways and means by which the
untouchables are protected in the exercise of rights ,which consist of legal penalties
against infringement of the rights.
The legal safeguards against the practice of caste discrimination were suggested both
for private and public sector .
Ambedkar write
“Discrimination against citizens by government officers in public administration or by
private employers in factories and commercial concerns on the grounds of race or creed
or social status should be treated as offences.” (State and Minorities, 1979.page 396).
The private sector is defined in a manner so as to include not only employment but also
commercial concerns, which enviably include transactions in various markets . In the
context of punitive measures for Social Boycott Ambedkar clarify on the spheres
under the private sectors to be included under “commercial concerns “.Private spheres
include renting and use of houses ( housing market ) and land ( agriculture land market
and lease market ),dealing with work for hire ,( employment market),undertaking
business with another person,( capital, product and consumer markets ) ,to render and
receive any service,( transactions in varies services carried through market and nonmarket channels) ,and things which are commonly be done in the ordinary course of
business.( all other services necessary for business) (State and Minorities 1979 ,page
399).
Looking at it from market economy perspective ,the spheres that are included in the
definition of private sectors for legal safeguards include transactions in various markets
and non-market channels such as all factors markets( that is agricultural land markets
,labour market, capital market),product and consumer market, private housing markets,
educational institutions and exchange undertaken in other services necessary for any
business activity and for social needs .
(c) Strategies for fair share and participation
The anti-discrimination measures in the form of “equality before law” and “legal safe
guards against violation’ have their limitations. The laws only prevent members in the
society from taking step that disadvantage minorities in the market and other spheres.
Despite laws due to practice of discrimination and opposition by high caste, the
untouchables however, may not enjoy fair access and participation in economic, social
and political process. In this context Ambedkar observed
“In a country like India where it is possible for discrimination to practice on vast scale
and in relentless manner Fundamental right can have no meaning “ and therefore in
addition to legal safeguards against discrimination there is needs to have protection
against discrimination to provide fair access and participation in legislature, Executive,
government services ,educational institutions and other spheres for protection “
Therefore Ambedkar suggested the measures that ensure fair access and participation
in various spheres which include legislative bodies, Executive ,public services
,educational institutions and all public spheres by representation in proportion to
population. Thus beside legal safeguards Ambedkar suggested pro-active measures on
the part of government to provide equal access and participation in various public
spheres .Why there is a needs for pro-active in the form of reservation?. .The legal
measures have their limitations in ensuring fair participation to discriminated groups ,
therefore the legal safeguards needs to be supplemented by methods like Reservations
that facilitates equal share , representation and participation to discriminated groups in
various spheres .
(d) Developmental and Empowering measures to compensate for historical
exclusion
From above it is clear that Ambedkar recognised the need of three fold strategy,
firstly to provision for equal rights,( overturning the customary frame work of caste
system based on the principles of inequality and denial of equal rights particularly to
untouchables),secondly provision of legal safeguards against the violation of these
rights in term of laws and thirdly the pro-active measures against discrimination for
fair share and participation in legislature, Executive, Public Services, education and
other public spheres of discriminated groups of untouchables .(in the form of
Reservation policy).
However Ambedkar also recognised that the present poverty, deprivation and
marginalisation of untouchables was much more deep rooted and the outcome of
denial of poverty rights and denial of education and opportunity to develop
capabilities for a long period of time.
. The legal measures in terms of equal laws with legal safeguards and measures for
fair representation and participations in public spheres ( in the form of reservation
policy ) have their limitations to overcome the poverty and deprivation caused by
historical exclusion and isolation in the past for long period ,which is reflected in
resources less ness ( agriculture land and non-land assets),education ,employment,
and lack of basic civil, cultural rights for development .These remedies against
discrimination are indeed necessary but that generally speaking these antidiscriminatory measures serve as safeguards against discrimination in the present and
have their limitation in overcoming the deprivation caused by historical exclusion and
isolation in the past for long period of time.( Darity ----) There fore there is need of
policies to compensate the discriminated group of untouchables for historical denial
of ownership of resources ,denial of access to education ,employment , and social
needs. Ambedkar recognised this limitation of anti-discrimination policies of legal
and fair participation types (like anti-discrimination laws and reservation and
affirmative action) .
In his view the real solution lies in removing the structural inequalities caused by past
exclusion and isolation in more fundamental ways and suggested the policies of
“structural equalisation”. In his final solution Ambedkar thus suggested dual remedies
,firstly a set of policies relating to the safeguards against discrimination in the present
or current discrimination and secondly strategies to overcome deep rooted
deprivation
caused by historical exclusion and isolation of untouchables.
Emphasising the need for policies of equalisation Ambedkar observed
“There can be no doubt that in view of the circumstances, the uplift of the Depressed
Classes will remain a pious hope unless the task is placed in the forefront of all
governmental activities and unless equalisation of opportunities is realised in practice
by a definite policy and determined efforts on the part of government”. (A schemes of
Political safeguards for the promotion of the Depressed Classes in the Future
Constitution of a self governing India, 1930 page 553-554).
For this purpose Ambedkar suggested three measures . First a clear responsibility
on the state to develop policy and programs for educational and economic
development
of the scheduled caste. Such policy is suggested particularly with
respect to education and economic development .The denial of right to education,
property rights and business has led to high illiteracy, landless ness and lack of
ownership of capital assets or business .Therefore Ambedkar put particular
responsibility on the sate for the development of education and for enhancement of
ownership of capital assets in term of agricultural land and other capital assets. In the
State and Minorities under the “Special Responsibilities of the Government” section
Ambedkar suggested
“That government should undertake the special responsibility for the betterment of
Scheduled caste .particularly for development of primary, secondary, and collage
education of the scheduled caste” .( State and Minorities ,1947 page 403)
In the economic spheres Ambedkar put responsibility on the state for providing access
to agricultural land and capital to the scheduled caste and other .In economic sphere
he suggested for more radical remedy in the form of “ State Socialism” for
protection against Economic Exploitations. Ambedkar observed
“The main purpose behind the clause is to put an obligation on the state to plan the
economic life of the people on the lines which would lead to highest point of
productivity without closing every avenue to the private sector and provide for the
equitable distribution of wealth .The plan set out in the clause proposes state
ownership in agriculture with collectivised method of cultivation and a modified
form of State Socialism in the field of industry. It places squarely on the shoulders of
the state the obligation to supply capital necessary for agriculture as well as for
industry.—It also proposes to nationalise insurance. (State and Minorities, 1947, page
408)
Ambedkar also suggested need to impose a statuary obligation to maintain a separate
administrative division to deal with their problems –that is “to watch the interests of
the Depressed classes and promoting their welfare.”Beside Ambedkar also suggested
the need to have representation of untouchables in decision making –in preparing and
influence the general policy of the government. In this respect Ambedkar observed
“ Just as it is necessary that the Depressed Classes should have the power to
influence governmental action by seats in the Legislature so also it is desirable that
the Depressed classes should have the opportunity to frame the general policy of the
government .This they can do only if they can find a seat in the Cabinet.”
Thus participation of the Depressed Caste to influence the government policies in
various arms of governments, through representation in legislature, in the Executive
and public services was considered to be essential and necessary. It is also necessary
to emphasis that Ambedkar suggested constitutional obligations on the state to
undertake developmental measures- just not leaving state’s effort to the voluntary
initiative of the legislature and the government. In a statement/scheme submitted to
the round table conference in 1930 Ambedkar observed
“ In and for each Province and in and for India it shall be the duty and obligation of
the Legislative and the Executive or any other Authority established by law to make
adequate provision for the education, sanitation, recruitment in public services and
other matters of social and political advancement of Depressed Classes “
In a similar manner Ambedkar also suggested safeguards against the failure of
administrative authority to implement the statuary and other provisions of
advancement for Depressed Castes.
This journey through the formative stage of
evolution of policy for the
empowerment of untouchables ( including the reservation policy) from 1919 through
1947 provide and insights in to the various dimensions of the problem .Ambedkar
single handedly work out the logistic in successive stages from 1919 till 1947,which
ultimately culminated in to the present policy at the time of framing of Indian
constitution in 1950 . Ambedkar arguments in favour reservation policy are mainly
placed in citizenship rights framework. .
Ambedkar suggested two set of remedies . A set of remedies against continuing
caste discrimination in the present. And another remedies against the historical
deprivation due to denial of economic, civil and cultural rights in the past and
unequal structure of Indian society .
Three safeguards are suggested against continuing practice of untouchability and caste
discrimination in the present. In sequence these safeguards against discrimination
include provision of equal rights, legal safeguards in the form of preventive laws
against the violation of the legal rights and pro-active measures for fair share and
participation in legislature, Executive, Public Services, education and other public
spheres of discriminated groups of untouchables .(in the form of Reservation policy).
Given the limitation of these measures ( which are used as safeguard against
discrimination in the present ) for addressing the problem of deprivation due to
historical exclusion Ambedkar also suggested more fundamental measures for
addressing the problem of
“structural inequalities” and suggested special
developmental measures of equalisation ,particularly in the spheres of education and
economic empowerment for the historical denial of right to education ,employment
and right to property in the past .
Equal rights would provide the legal frame, overturning the unequal customary legal
framework of the institution of caste system and untouchability. .Punitive laws will
provide protection against violation of laws against discrimination in public and
private spheres , and the pro-active measures will provide fair ,share ,participation
and representation through reservation in public spheres as a safeguards against
present discrimination. The development measures in education and economic
empowerment would help to empower the discriminated groups and reduce
inequalities between them and rest of the section in Indian Society .
Ambedkar emphasis the need for provisions in the constitution as well as statuary
provision and a responsibility on the state to developed strategies for development of
untouchables .Also emphasised the need to have their representation in decision
making process and administrative machinery to monitor the policy measure and
programs.
Equal Opportunity Arguments and Corporate sector’s Position
Among the several reasons, the absence of discrimination in recruitments and use of
merit based policy in private sector has been offered as main arguments against
reservation in private sector by the Corporate sector and others . After running
through the various views on this points , it appeared that this argument of private
sector is not based on the empirical facts about the working of the various markets
and particularly of hiring practices used by the private sector .The evidence shows
that the methods used by the private sector have been particularistic and exclusionary
in nature We therefore try to provide some empirical evidence on discrimination in
the employment market and as well as other market .
We first provide the indirect evidence on the consequences of exclusion and
discrimination of untouchables ,particularly of denial of poverty rights ,education
,business and employment .We then provide an evidence on the continuing
discrimination of the untouchables not only in hiring by private sector ,that is
employment market ,but also discrimination faced by these group in other market as
well ,namely agriculture land market, capital market, input markets ,product and
consumer goods markets and social needs like education, housing, water( irrigation
and drinking ) -supplied both privately and publicly and by the state .
Evidence on Impact of Historical Exclusion and Discrimination
Under the customary the traditional rules of the Hindu social order the untouchables
were denied right to poverty ,business ( except the polluting occupation) ,education
and ,employment ( excluding the
manual labour ).The consequences of these
traditional restrictions in the past are to be seen even today in terms of lack of
ownership of agricultural land ,business or non land capital assets , in education and
ultimately in high poverty .8
A look at the recent data for 2000 brings out this quite clearly . About three-fourths of
the SCs live in rural areas, where the main sources of income
s are either farming,
,wage
labour or some kind of non-farm
business .
In 2000 only 16 % of all SC
households cultivated land as (independent) self-employment worker
as against 41 %
among Non-sc/st . Only 12 % carry some kind of business indicating
.
access to capital. Taking both farm and (rural) non-farm activities , only about 28 % of rural
households had got some access to capital assets as compared with the 56 % percent for
non-sc/st ..
Inadequate access to agricultural land and capital leaves no option to SC workers
except to resort to manual wage labour, consequently it leads to enormously high level of
(manual) wage labour among the SCs, 61 % per cent as compared to only one-third for
others
one-third
in rural area and about 64 % in urban area .Among them in rural area
are casual labour as against only 7 per cent among the non-sc/st .
The unemployment rate ( based on current daily status ) in 2000 were
two time higher amongthe SC( 5.5%) as compared with non-SC/ST .
With higher incidence of wage labour associated with high rate of under-employment the
SCs would suffer from low income and greater level of poverty. In 2000 about 38% of SC
household were below the poverty line in rural areas as compared to only less than
for non-sc/st population .
The incidence of poverty was
as high as
20
50%
per cent among agricultural labour followed by forty per cent among non-agricultural labour.
In urban area also
the poverty among Sc was about 38 % which is much higher as compared with
19 % for Non-sc/st .The incidence of poverty was quite high among casual
labour –about 60 %.
The former untouchables also lag far too behind in level of education, 37% as
against 57 % for others in 1991.
Evidence on Current Economic Discrimination
After having provided some evidence on the impact of historical exclusion in access to
agricultural land ,business and education ,we now present empirical evidence on the
continuing discrimination in present in economic and social spheres .The focus is
particularly on market discrimination . From the massive literature on the practice of
discrimination and untouchability we picked most recent study by Action Aid
conducted in 2000/2001 in about 550 villages from eleven states .We confine the
evidence to economic discrimination covering most of the markets .
The study revealed that the discrimination in labour markets operates through
exclusion in hiring, and lower wages. In about 36 percent of the villages, the SCs
were denied casual employment in agriculture. In about 25 percent villages, the SCs
faced discrimination in terms of wage payments. The SC wage labour thus, received
daily wage at a rate, which was less than the market wage rate, or wages paid to the
non-SC workers. Belief in the concept of purity and pollution also come into effect in
hiring of SC labourers in house construction- in about one-thirds of the villages, the
SCs were excluded from employment in construction of houses .
In the case of other markets, the study observed discriminatory treatment of SC
persons in access to irrigation water, public and private services. In little more than
one-thirds of the villages, the SCs were denied access to irrigation water for
agriculture. In case of agricultural land, the selective evidence from some states brings
out the restrictions puts by the high castes towards the SCs in the purchase of private
agriculture land, and use of public land for agriculture use and housing. In the case of
access to the Common Property Resources like grazing land, fishing pond, and other
resources, the SCs faced exclusion in about one-fifth of the sample villages (21 %).
The continuing faith in the notion of pollution and purity by the higher castesassociated with untouchability was particularly reflected in exclusionary and
discriminatory behavior of higher castes in the consumer markets- that is in the sale
and purchase of consumable goods, particularly eatables like milk, vegetables, and
other goods. In 35 percent of the villages, the SCs were not allowed to sell any kind of
goods at village level markets, wherein the identity of the SC person was known. In
about 47 percent of the villages (out of a total of 347 villages surveyed), the SCs were
not allowed to sell milk to village cooperatives, and to private buyers. The survey data
also reveals some isolated evidence on the practice of exclusion and discrimination in
the sale and purchase consumer goods such as bakery products, and vegetables etc.
Restrictions on the sale of a number of consumer items such as milk, and milk
products, products manufactured in the bakeries owned by the SCs, vegetables, and
other items in the village market where the caste identity of the seller was visible,
pushed the SC seller to go to small towns, and other market places where the caste
identity was not so obvious, and remained hidden.
Thus exclusion in hiring of the SC labourer in general, and particularly in house
construction; discrimination in wage payments (paying lower wages than the
prevailing market wages), and selective restrictions on the sale of various consumer
items had obvious impacts on the earnings of the SC households, and hence, the same
was reflected in the incidence of high poverty among the SCs. The exclusion in
employment and lower wages reduced the wage earnings of the SC households in the
rural areas. Restrictions on the sale of milk, and other consumer items further reduced
the sale, and thereby, the income. Obviously, the reduced income of the SC
households had poverty aggravating consequences. The linkages of exclusion and
discrimination, low income, poverty, and low human development are thus, obvious.
Industry and Discrimination in Labour Market
The Corporate sector particularly argues against reservation policy on the grounds that
it follows fair methods of employment, and hence disregards the need of any antidiscrimination measures. The argument that there is no discrimination in employment in
the private sector is completely contrary to the evidence from studies on the working of
Indian industrial labour markets. There is considerable evidence to show that the private
sector follows the recruitment methods, which are exclusionary and discriminatory in
their consequence. In order that best have opportunity to be hired, all potential
candidates must have equal access to information about job opportunities, and to the
channels and processes of hiring.
Papola observed that historically the various modes and mechanisms practiced by private
sector industry amply demonstrate that the system involves social exclusion, and
discrimination throughout the period of modern industrial development. The factory
enterprise in the initial period made use of the Jobber system, which was replaced by the
institution of Labour contractor/officer in the 1970’s, both in turn turned out to be
equally exclusionary and particularistic in their nature and outcomes. The National
Employment Service (NES) Scheme was the next, and is considered to be less
inequitable and discriminatory in nature. But the use of NES by the industry has declined
over time. During 1949-53, between 50-85% vacancies notified by the employer were
filled by registrants of employment exchange. The figure went down to 65% during
1953-60, and stayed at around 60% during 1960-68. During 1980’s the ratio has been
steady at around 55%. Studies further revealed that private factories and enterprises do
not use NSE in any significant way in recruitment. Papola provides us with a review of
some of the studies. Among the workers surveyed in different centres at different points
of time, those having got placed through employment exchange formed about 2.2% in
Pune (1957), 1.87% in Ahmedabad (1971/72), 1.5% in Mumbai (1975/76), and 10.6% in
Coimbatore (1986/87). Thus, the only institutional mechanism for ensuring a fair and
non-discriminatory process of recruitment has not found favour from the private
employers.
In turn informal channels of recruitment have been employed by private industry on a
large-scale basis. Same studies have also brought out that the percentages of those
who got jobs through informal and personalised channels. They formed more than
70% in Pune (1959), 60% in Mumbai (1976), and a equally high proportion in
Ahmedabad (1975), Coimbatore (1986/87) and Surat (1998). Thereby, it is evident
that a very high percentage of workers got jobs through personalised, and insiderbased recruitment processes. Papola observed that the social composition of these
insider groups and persons is presumably from socially better-endowed sections. For
instance in Pune factories higher castes namely, Brahmins/Marathas are over
represented, accounting for 50% of the workforce, as against 35% share in population.
In Coimbatore, 49% of Brahmans were in protected jobs as against 23% among
backward, and 30% among scheduled castes.
The studies based on field survey for urban areas by Banergee and Knight observed
that:
“There is indeed discrimination by caste, particularly job discrimination-.discrimination is greatest in operative jobs, in which contacts are more important for
recruitment, compared with white-collar jobs in which recruitment involves formal
methods.”
Madheswaran found that caste discrimination explained earning difference between the
SC and non-SC science graduate employee possessing the same qualification and
demonstrate that wage discrimination is more than the job discrimination . In face of
such evidence the private sectors contention that there is no discrimination in private
sector is deficient and wanting on many counts.
Efficiency, Merit and Competition
Another argument against reservation offered by the corporate sector is
the supposedly negative impact of reservation/affirmative action policies
on competitiveness, and productive efficieny. From the current literature
it appeared that Corporate sector’s arguments are based neither on theory
nor empirical facts.
Current
theoretical literature
on market
discrimination and efficiency addressed this question from two angle
.Firstly it look at the effects of labor market discrimination on market
competitiveness and efficiency in resource allocation
and their impact
on saving ,investment ,and profit of the firms and economy as whole
.Secondly the literature also assess the
impact of different types of
Reservations/
on
Affirmative
actions
economic
efficiency
.Discrimination and Economic Efficiency
Let us take the first issue: Do the economic theories of discrimination support the argument of
the corporate sector that anti–discrimination laws, and fair employment policies of
reservation/affirmative actions I use reduce competitiveness and productive efficiency? Standard
mainstream economic theories argue that for efficient and optimum economic outcome in
economy, the prevalence of a perfectly competitive market situation is necessary, and any
deviation towards imperfection produces inefficiency, and less than optimum economic
outcomes. In so far as market discrimination brings factor immobility it induces imperfections in
labour, and other markets through a market failure of a kind, and generate less than optimum
economic outcomes, and thus hamper economic growth, besides of course creating unequal
opportunities for discriminated groups. Birdsall and Sabot have summarized the central
implications of mainstream theory of discrimination in a World Bank study as:
“In sum, discrimination will tend to slow economic growth by reducing efficiency in the
allocation of labour among firms and the economy by reducing the job commitment and efforts
of workers who perceive them to be victims of injustices, and by reducing the magnitude of
investments in human capital, and the return on those investments. The losses due to
discrimination are likely to be greater, the more rapid the pace of change in an economy.”
The economic theories of caste also predict the same consequences of caste discrimination,
which form the basis for reservation policy in India. Theories uniformly recognize that the caste
system’s basic feature of ascribed occupations for each caste implies exclusion of one caste from
undertaking the occupation of another caste. Exclusion and discrimination in occupation, and
labour employment, is thus internal to the system and necessary outcome of its economics. It is
reasonable to assume that in a market economy framework the occupational immobility would
operate through restrictions in various markets such as labour, land, credit, other inputs and
services necessary in any economic activity. Labour market exclusion would therefore, manifest
itself in exclusion in employment from another caste’s occupation . Immobility of labour, and
capital, under caste-wise division, essentially means segmentation by occupationally
segregated, and imperfectly (though not completely) immobile market situations. Hence,
theoretical models would necessarily imply that occupationally segmented, and imperfectly
mobile labour, and capital markets would generate economic outcomes, which will be less
than optimum, and hamper overall economic growth. In its ultimate outcome, the economic
efficiency of the caste economy would be lowered, than posited in the model of a perfectly
competitive market.
There are other consequences to which Ambedkar draws our attention. The efficiency of
labour is adversely affected by number of customary rules regarding dignity of labour, and
social statuses ascribed to the so-called polluting occupations. The social and individual
efficiencies require that the capacities of an individual be developed to the point of
competency to choose, and make one’s own career. The economic pursuit in caste system as it
exists, is not based on individual choice, sentiment, and preference, as it appoints tasks to an
individual in advance, selection is not on the basis of training or capacities, but on the social
statuses of persons. Some of these occupations are considered polluting, and impure and
therefore, socially degrading. The social stigma of impurity and pollution, in fact reduce the
social status of the person engaged in them, such as in scavenging, and leather related works.
Forced into these occupations on account of their caste origin, people do not derive job
satisfaction, and are constantly provoked to aversion, ill will, and desire to malinger.
In this context Ambedkar observed:
“There are many occupations in India which on account of the fact that they are regarded as
degraded by Hindus provoke those who are engaged in these occupations. There is a constant
desire to evade and escape from such occupations which arise solely because of the blighting
effect which they produce upon those who follow them owing to the slight and stigma casting
on them by the Hindu religion” and adds that,
“What efficiency can there be in a system under which neither men’s hearts nor their minds
are in their work?”
Ambedkar and Akerlof have also pointed towards adverse consequences on employment. By
putting restrictions on inter-caste mobility of labour, and thereby, not permitting readjustment of
employment, caste becomes a direct cause of much of “voluntary unemployment” among the
high caste persons and “involuntary unemployment” among the low castes. The high caste
Hindu’s would generally prefer to be voluntarily unemployed for some time rather than taking up
occupations not assigned to their castes. On the other hand, for the low caste untouchables the
restrictions to take other caste’s occupation compel them to remain involuntarily unemployed.
Reservation/Affirmative Actions and Efficiency
Besides, the overall efficiency impact, the industry also points to the possible consequences of
methods used in ensuring fair access to employment to discriminated groups. It is argued that
relaxations in qualifications for appointment may supposedly hamper the productivity of firms.
Similar to the overall efficiency arguments, this argument too has less support in economic
theory and in empirical literature on discrimination. The fallacy of the argument becomes evident
considering the fact that recruitment in public sector under reservation in India, and elsewhere is
based on the required qualification, and that the norms of appointment and those of qualification
are not relaxed. Therefore, the question of compromising productive efficiency does not arise.
Though, some firms take necessary steps in the initial stages or recruitment through proper
screening, orientation and later after appointment through mid-term training of minority
employees. But that apart there are no studies whatsoever on the relative work efficiency of those
recruited with reservation and without in India . Similarly, there is no evidence elsewhere in the
world . In a comprehensive review of theoretical models of efficiency and impact of various
types of affirmative actions in USA, Holzer and Neumark conclude:
“Not surprisingly the theoretical literature from labour economics generates ambiguous results on
whether or not Affirmative Actions program results in efficiency gains or losses, much depends
on whether or not discrimination exists in the absence of these programs, the presence of other
market failure, (such as externalities, and capital market and information imperfections) and on
how they affects human capital formation and job assignments among protected and unprotected
groups. Theoretical literature regarding Affirmative Action effects in university admissions and
business procurement is virtually non-existent.”
On the empirical evidence the study concludes:
“The potential effects of Affirmative Actions on performance, at least in the labour market
appear to depend heavily on how it is implemented. Employers that practice Affirmative Action
can (and often do) mitigate its potentially negative effects on performances by recruitment and
screening before workers are hired, as well special training and evaluation efforts afterwards.”
The Malaysian experience also indicates that rapid economic growth during the 1980’s had
coincided with the comprehensive affirmative action policy adopted since early 1970’s, which
involved massive redistribution of employment, capital, agricultural land, and educational
opportunities in favor of the marginalized Malaya community.
These insights from the theoretical literature indicate that market discrimination
bring inefficiency in the allocation of resources and produce less than optimum
economic outcomes .And therefore argue for measures for market interventions to
overcome discrimination and to improve the mobility of factors ,particularly the
labour and capital and to improve an access of the discriminated groups to various
markets .
Remedies against Discrimination
In order to come with a set of remedies against discrimination in private sector ,we
first take look at the strategies used in India and else where in the world for public
and private sector ,and to draw lessons for a policy for private sector in India.
Indian Experience
Indian government has recognized the problem of exclusions and deprivation and
developed specific anti-discriminatory and other policies for economic, educational,
social and political empowerment of the SC, and ST. Some of these measures have
been extended to the Other Backward Castes. Indian government approach towards
these groups has been primarily shaped by the provisions in constitution, which
guarantees equality before the law, and empower the state to make special provisions
to promote with special care, the educational and economic interest of the SC/ST and
to protect them from social injustice and all forms of exploitations, abolition of the
practice of untouchability and discrimination .
The government has used two fold strategy for the SC which include (a) Legal
measures against discrimination and strategy for equal access and participation . and
(b) development or empowering measures.
The legal measures and Fair access policy include enactment of Ant-untouchability
act of 1955 (renamed as protection of Civil rights Act) and Schedule Caste/Tribe
Prevention of Atrocities Act 1989. Under the first Act practice of untouchability and
discrimination in public places and services is treated as offence. The second Act provide
Legal protection to the S C /ST against violence and atrocities of several kinds by the high
castes.
Reservation
for both SC/ST in governments services , education ,housing and political bodies
like legislature and other spheres also falls under fair access measures. These
measures have been used by the government to ensure proportional participation of
the SC/ST in various public domains.
The reservation policy is, however confined to state run and state supported sectors
and the private sector where more than 90% of the SC/St workers are engaged are
excluded and therefore remained unprotected from possible discrimination. In the
absence of reservation policy in the private sectors ,the state has used “general
programmes ” for economic, educational and social empowerment of the SC./ST. The
focus has been to improve the private ownership of fixed capital assets ( land and non
land ) , education and human resource development , and improved access to social
and basic services like housing, health, drinking water, electricity and others. The
strategy for improving or building the private ownership of capital assets and human
resources capabilities has been primarily undertaken as a part of anti-poverty and
other programs . Measures for economic empowerment seeks to improve ownership
of capital assets , enhance the business capabilities and skills of SC/ST persons
to enable them to under take self-employed business activities . Educational
development constitute the major programme of the government .
International Experience
Similar to Indian, we also find number of these remedies have been used in different
countries to provide legal and other safeguard against market and non market
discrimination and to correct the imbalances in access to resources, employment,
education, in political participation and other societal spheres between sub-groups in
their populations.. It will be two simplistic to put the remedies used in these
countries in uniform pattern. However two aspects of these remedies against
discrimination and inequality need to be clearly understood. These relate to (a) type
of the economic sector or market for which the legal and fair access policies are used
and (b) the method or procedures used in their application in practice for the private
and public sector.
Firstly, as regard the economic spheres or markets, most of these countries such as USA,
Northern Ireland, South Africa, and Malaysia, multiple economic and social spheres are
covered under the orbit of legal and fair access strategies and the spheres include labour,
agricultural land, capital, product and consumer goods markets (including the
government contracts and , in supply of social goods such as educations, housing and
participation in political institutions . The specific economic spheres varies from country
to country. In countries like USA and Northern Ireland where the non- agriculture sector
constitute more than ninety of the work force, the focus is mainly on affirmative action
policies for labour market, both in public and private sector. In some countries like USA
besides labour market, legal and affirmative action measures also cover education,
housing, and government contracts for construction and purchases of goods from
minority businesses. In the developing countries like Malaysia where substantial
portion of population is engaged in agriculture sector, in addition to labor market, the
affirmative action measures are also extended to agriculture land and capital market.
This is in addition to affirmative action polices for social needs like education, housing
etc.
Second aspect relates to methods and procedures used to operationalize the measures
against discrimination .Countries have used at least three kinds of procedures or
methods.
First is the legal protection against discrimination in the form of “Equal Opportunity
(Employment) laws (EEOL).These laws prohibit any private or public employers from
discrimination of worker or persons by majority and provide legal safeguards to
discriminated groups in the event of discrimination in employment and other spheres of
economic activities. Article VII of Civil Act which established Equal Employment
Opportunity as law (EEOL) (Executive Order 11246) in USA, and Fair Employment Act
in Northern Ireland are some examples.
Second method is what I would call ‘Strategy for Fair Access for share and Participation
of minority groups ”. These methods are designated by different names and the their
mechanism also differs .These measures are designated as Reservation,( like India and
,Malaysia) Affirmative action in USA , fair Employment measures in Northern Ireland
or positive actions in U .K . In principle, these measures can be distinguished from
legal measures mentioned above ,requiring pro-active steps to ensure fair participation
of discriminated groups(in employment and other spheres like education, housing,
government contracts ,legislature etc), in contrast to laws that only prevent employers
from taking step that disadvantage minorities in the labour market and other spheres.
Given the limitations of legal measures in ensuring fair participation of discriminated
groups, they are supplemented by reservation/affirmation actions and positive measures,
which indeed go a step ahead and attempt to ensure fair share to the discriminated
groups.
The principles (and methods) applied to judge “fair or just participation” in employment,
educational admission, political participation or government contract and other spheres
varies among the countries. Generally speaking share of minority group in population,
work force, labour force constitutes the basis to judge the fair participation or access (
or under representation of minority group ) . For measuring fair access in public and
private sector employment ,for instance countries like India and some other countries
use population as measure of fair participation ( or under representation ),while in other
countries like USA and Northern Ireland also use workforce ,labour force ,or candidates
pool as measuring rode for fair participation or “under-representation of minority groups
.
So population share of minority group , labour force or appropriate candidate pools are
taken as indicators to judge the “under-representation “ and to provide fair participation.
Again different methods are used in actual measurement of fair participation. In some
cases just participation are translated in term of fixed quotas in proportion to population
in giving political representation, share in educational institutions, housing, government
contract and other spheres .In other cases goals and target are fixed which are to be
realized in some specific period without fixed quotas But certain target are set in which
are in conformity with population share, labour force share or candidate share of
minorities .Further these fixed goals or targets are made legally mandatory or
compulsory in some cases. While in other they are pursued with other non legal
actions which may take various forms by the government, such as withdrawal of
concession or incentive or other actions for not fulfilling the goals, on the part of firms.
In both cases , however some sort of enforcement machinery is set in to monitor the
target, goals and time table . Office of Federal Contact Compliance in USA and Fair
Employment Agency in Northern Ireland are such example.
Third strategy is ‘Reparation or Compensation’. The strategy of Reparation and
Compensation is defined as payment for an acknowledged grievous of social injustice to
a group (Darity 1997). It is necessary to recognize that the ‘Fair Access Policies” ( in the
form of Reservation/Affirmative Actions) of various types that we have described above
are generally used as a measures and safeguards against ‘present discrimination’. It has
its limitations in overcoming the effects of discriminations and exclusion suffered by a
community in the past for long period of time. In this context Darity observed that
“Affirmative action does not, in, general rest on the goal of compensation for past
injustices, nor does it provide a vehicle for redress of wealth disparity---affirmative
actions programs largely have been designed to address the question of present
discrimination”. The instruments of ‘Compensation or Reparation” on the other hand is
specifically used as payment for the denial of property rights and other rights in the past,
resulting lack of access to income earning assets ,education ,and other rights causing an
intense deprivation to a excluded and discriminated groups. Equal opportunity Act and
Fair Access Programs of various kinds which intend to provide legal protections and
ensure just participation in the present are inadequate to compensate for wrong done in
the past.. Therefore some countries have selectively used compensation as methods to
empower the excluded and discriminated groups as one time settlement. These are
undertaken to improve ownership of agricultural land , capital , and in educational
development .Distribution of agricultural land and capital to Malay in Malayasia is
one such example .This in contrast to measures undertaken by the Indian Government of
to increase the ownership of agricultural land of Scheduled caste by giving some land
through ceiling on land holding and government land –the measures which have been
spread over several years without proper target and one time settlement and therefore
without much positive outcomes .
Remedies suggested by Corporate Sector and their Limitations
In the light of this review and experience of India and other countries in the world of
policies for minorities for public and private sector, we now look at the measures
suggested by Corporate sector and others for discriminated groups such as schedule
caste and scheduled tribe for the private sector and look at their limitations.
The urgent need to improve the status of the disadvantaged groups is widely shared
even by the corporate sector ,but there is a considerable disagreement about methods
and the means that can or should be used to improve their lot. Exception apart, (which
we shall mention later) the corporate sector and a group of academic favoured
policies for development of education and skill ,and entrepreneurship with increased
access to capital to set up business and the institutional infrastructures like
educational institutions .Few suggested informal and voluntary preference in
employment for SC with or without incentive subject to merit . .
The FICICI which represent about 443 chambers, associations and member bodies
suggested that three measures, and this include (a) definite medium and long term
plan for educational and skill development through Government and private
partnership for SC/ST (b) development of entrepreneurship with well define
affirmative action policy for financial institutions to supply capital to vulnerable
groups for setting up businesses (c) awarding government licenses and contracts to
SC and ST and preference to the SC/ST in government procurement ( c) some
representation of the disadvantage communities in private sector employment on an
voluntary basic with substitutive incentives to the firms following the preference in
the forms of tax-breaks,.( Amit Mitra 2005)
PHD Chamber of Commerce and Industry which has about 1500 membership suggest
that the proper way to address the issue to uplift the down trodden classes is by
providing them with educational support, vocational programmes and preferences in
jobs whether in public or private sector through incentives to those which encourage
employment to these groups.” (------------)
CII (Confederation of Indian Industries) favour programme of affirmative actions in
term of voluntary preference in employment . But it focuses on economically
backward section irrespective of caste, creed or religion .It emphasises on improving
employability and enterprising capacity for self-sustaining ventures. CII thus suggest
measures for (a) education development by member companies through scholarship,
adoption ,through linkages of companies school with government schools
in
improving educational infrastructure, teachers skill , helping ITI to upgrade,
preference to economically backward students in companies vocational schools, and
training centres, (b) various measure by CII companies to develop entrepreneur skill
and help artisan to strengthen
macro-enterprise and self help groups, generate
resources for them and help set up enterprises (---------)
Associated Chember of Commerce (ASSOCHAM) favour American type
Affirmative action policy in employment, education, housing, health facilities - by ‘
giving preference in employment to SC/ST and backward communities if other
thing in merit are equal .It suggest that preference is necessary to underrepresented
class or minority communities if all other things including merit is equal .It also
suggest that mechanism could be evolved to seek redressal of grievances, in case of
discrimination based on community ,sex, and caste. (---------)
The President of Calcutta Chamber of Commerce also suggested skill and education
development as the only remedy for development of SC for their effective
participation in private sector employment .( Satish kumar Junjunwala)
This brief account of the position of corporate sector does recognized the need of
measures to improve the situation of disadvantage groups like SC/ST and proposed
measures for development of education and skill , entrepreneurship and business
through improved access to financial capital . Most of them also suggest need to give
preference to the persons from disadvantage section in employment subject to merit on
voluntary basis .They also suggested preference in supply of capital by public sector
banks to the disadvantage groups to enable them to undertake business .But they are
silence on the role of private banks. Also favored preference for SC/ST in the
government contract including government purchases and procurement .
This informal affirmative action policy however supposed to be based on voluntary
initiative of corporate sector without any legal compulsion or monitoring mechanism .In
fact the corporate sector suggest provision of incentive in return ,to the firms which
give some share in their employment to the SC and S T. Neither do they suggest any
legal safeguards against discrimination in employment .Only one Chamber suggested
American type affirmative action policy with legal safeguards .None of them favor
quotas and monitoring.
Why does the Corporate sector take such approach? The reasons are to be found in their
particular understanding of the problem of SC and ST. Most of the Chamber of
Commerce do not recognized that there exist discrimination of SC in employment ,in
supply of capital by private sector ,in private education and other markets . Therefore
Corporate sector argue the case for some preference on the ground of sympathy and
charity for historical denial and not on the basis of need to have equal opportunity to
discriminated groups in private domain .In most of the countries which have used antidiscrimination policies ,the single most justification is the exclusion and discrimination
of minorities in the past and present on the basic of group identity in multiple spheres
and resultant deprivation suffered by them .Consequently various types of remedies
against discrimination are justified and grounded on the principle of equal opportunity
and fair access and participation . In most of the countries these measures are not
voluntary in nature but involve some kind of legal obligation with monitoring
mechanism, although their forms differ from country to country.
Since the Corporate sector does not recognize the problem of continuing
discrimination of SC in various markets and only recognized (although in an indirect
manner ) the present deprivation as a possible consequences of denial of right in the
past, the solution are also based on this assumption . There for suggested measures by
Corporate sector are largely grounded in sympathy and charity and not on the basic of
need to have equal opportunity and safeguards against continuing discrimination in
the present ,-in various markets like private employment , private capital ,land markets
( agricultural and urban) ,input markets ,product and consumer markets, private
education and other services required in
business and education . It is this
understanding of the Corporate sector which induce them to suggest the measures for
development of education ,skill, and entrepreneurship to improve “employability and
entrepreneurship skill “ , rather than measures for equal access and participation as a
safeguards against continuing caste based market discrimination in the present .
These alternative measures suggested by Corporate sector therefore suffers from major
limitations in so far as it did not suggest definite measures against present market
discrimination suffered by SC in various markets including labour and capital market .It
does not address the question of market failure associated with caste based market
discrimination and its adverse consequences on economic efficiency . In other word
Corporate sector offered the general solution of educational and skill and
entrepreneurship development to a problem which require a specific and dual solution.
They failed to recognize that the problem of discriminated groups like untouchables is
two fold, one of lack of access to income earning capital assets like agricultural land and
other capital assets require for business, and education due to denial in the past and
resultant economic and educational backwardness of a high magnitude but also
continuing exclusion and discrimination in various markets including private
employment market in the present .
And therefore problem of untouchable indeed requires dual solution - one set of
remedies for historical denial of ownership of capital assets ,employment ( of some
types) and education in the past and second set of remedies to provide safeguards and
measures against continuing market discrimination in the present .Like other
economically and educationally backward section from higher caste, untouchables also
require education and skill development to improve employability and improved access
to capital for business .But unlike others , the untouchables facing discrimination in
jobs and other markets require additional safeguards to ensure fair access to private
sector employment ,capital market ,other input markets ,product and consumer markets
and services required
for business and
education and skill .Education and
entrepreneurship development alone will not help unless it is supplemented by
strategies of fair access and participation in jobs and various other markets to
discriminated groups and therefore a definite policy to ensure adequate share in private
sector employment ,capital,(agricultural land and non-land assets), and other input
markets ,product and consumer markets and services and in education and skill
development institutions ..It needs to be recognized that it is not a coincidence that in
large number of countries in the world the strategies of economic /educational
empowerment of discriminated groups are supplemented by reservation / affirmative
action policies to give them fair share and representation not only in employment and
education but also in capital , agriculture land ,housing and political representation .
What is problematic in the solution suggested by the corporate sector is their failure to
recognize the adverse consequences of market failure associated
with caste and
untouchability based market discrimination on the competitiveness of the various
markets and thereby on economic efficiency and performance of economy. The market
intervention policy in the form of reservation or affirmation actions and other positive
measures are suggested not only to provide equal access to discriminated groups but
also to over come the market failure or imperfections caused by discrimination to
improve the competitiveness and thereby the performance of the economy. The fair
access policy are there fore justified both on the round of promoting equal opportunity
and economic growth .In other word ant-discrimination measures and pro-active
policies are required both for social justice and growth which the Corporate sector has
not realized. Therefore suggested measures by corporate sector suffered from number of
limitations.
Proposed Remedies against Economic and Market Discrimination for
Private Sector
Any policy for private sector reservation therefore is necessary to provide equal
opportunity to discriminated groups and to create economic atmosphere for economic
growth. There are lesson to be drawn both from theory and empirical facts - from the
experiences of Indian reservation policy and policies in other countries .The overview
of the remedies in India and other countries presented in the earlier sections, indicate
three alternative remedies being used by India and other countries .These include
Equal opportunity laws as a safeguards against discrimination, Measure to ensure
Equal share and participation (assuming different names like Reservation as in Indian
,Affirmative action as in USA, Positive action policy as in U.K, or New Policy as in
Malaysia ) and Reparation and Compensation ( as in Malaysia) which have been
used by number of countries.. Adoption of some or all of these remedies against
discrimination for low caste untouchables and similar groups in private sector in
India will be determined by nature of economic discrimination faced by them in
various markets .
It need no mention 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 cover multiple
economic spheres and not just the labour market alone.. In the remaining portion of
the discussion we attempted to spell out a set of policies against economic and market
discrimination including the possible nature of reservation policy for the private
sector in India. The intension is not to come up with exact policy package but to lay
down general principles that may form the base for more specific measures.
Given the wider coverage of societal discrimination against the low caste
untouchables, strictly speaking all the three measures, namely legal safeguards
,Measure to ensure appropriate share and participation and compensation/reparation
are essential for remediation of continuing market and non market discrimination and
denial of economic and educational opportunities in the past ( the consequences of
which are still present today ) . The strategy of Reparation/Compensation is possibly
necessary to compensate for denial of property right in agricultural land, business and
education to the untouchables .In case of present discrimination in labour ,capital
,input ,product and consumer markets, and social needs like education and housing a
combine use of legal and Fair access policy may be necessary .In brief we needs all
the three measures to address the problems arising out of continuing economic and
market discrimination of untouchables .in the present and the denial of equal
opportunities in the past .In summary forms these are be presented as follow .
(a) Legal safeguards against economic and market exclusion and
discrimination
Indian Constitution guarantees equal rights to all. However while there is legal
guarantees of equal right in civil spheres in the form of Anti-Untouchability Act of
1955 ,there is no such legal safeguards against economic and market discrimination in
private sector .
Therefore there is a need to have laws against economic and market discriminations
in the private sector, similar to that of Ant-untouchability Act of 1955.
For the purpose of this anti-discrimination law , the private sector should be defined
so as to include not only private employment market but transactions in various other
markets like agriculture land market and lease market , capital and financial markets
,input markets ,product and consumer markets , privately supplied social needs like
education, housing, water and various other services carried through market and non market channels.
The economic and market discrimination based on caste and untouchability be treated
against law and subject to action .This should include unfair discrimination in hiring for
employment ,in sale and purchase and leasing in and leasing out agricultural land ,sale
of private Irrigation water ,supply of finances by private banks ,discrimination in sale
and purchase in various products and consumer goods , discrimination in provision of
private doctors services ,admission in private education institutions, discrimination in
renting of private residential houses and discrimination in allocation of private spaces
for shops and other business activities and supply of other services. Antidiscrimination laws will provide protection against practice of economic and market
discrimination in private spheres.
(b) Strategies for fair access and participation
Again the anti-discrimination measures in the form of legal safe guards against violation
in economic and market discrimination have their limitations. Due to practice of
discrimination the untouchables may not enjoy fair access and participation in various
markets. Therefore there is need to ensure fair access and participation in various
markets and non-market transactions including employment. Some sort of reservation
policy will have to be develop to give fair share and participations in private
employment, in supply of credit ,in private educational institutions , and where ever it is
possible .
( c)Compensatory Measure for historical Denial- In case agricultural land,capital and
education some sort of policy to increase the ownership of agricultural land ,capital and
education need to be developed to compensate for historical denial of property right in
agricultural land ,capital and right to education for long period .This will have to be
done through one time settlement spread over reasonable period of time .
We discuss the nature of remediation against discrimination in each of these market
in detail
Private Employment Market -Legal safeguards and Reservation in Private sector
Employment
The employment pattern of the discriminated group like Sc is such that majority of
them are mainly wage labour household. The selective evidence indicate presence
of significant discrimination of SC in hiring and wage payment which is unrelated to
productivity . At present the private sector where majority of SC/ST worker are
engaged include agriculture and private industrial,and territory sector.
In case of agriculture sector there is a high involvement of SC/ST mainly as
agricultural labour .( 65 % of SC household are wage labour ).This compulsive
involvement in the agricultural labour market ensure their participation ,as such
there is no need of reservation in agriculture labour market for the SC/ST .
However given the selective discrimination in hiring and wage payment, particularly
associated with notion of untouchability and pollution and purity there is need to
have at least legal provision in the form of “Equal Employment Opportunity
Act”(EEOA) so that clear legal protection is guaranteed against labour market
discrimination to SC in hiring and wage payment.
In the industrial and service sector the discrimination in employment is possibly of
high order in certain categorise of jobs, if not all. Here the government should use
both provision of equal employment opportunity Act and supplement it by
reservation in terms of quotas- identical to present reservation policy in public sector
employment .The equal employment opportunity act will discourage the
discrimination as it will act as deterrent on employer. The reservation with certain
quotas in certain categories of jobs will ensure fair participation of SC in industrial
and service sector employment.
In order to bring transparency in the employment pattern , all farms should be asked
to registered with Equal Employment Opportunity Office ( to be set up for this
purpose ) with information on social composition of their employees. This is what
being done in Northern Ireland –to bring more transparency in the social
composition of employees in the private industrial and service sectors
Land Market -Compensatory Measure for ownership of Agriculture Land
Over eighty percent of the SC/ST persons still live in rural area. . Of the total Sc
household about three-fourth are either land less or near landless ( that is owning less
than one acre of land ).High incidence of landlessness among the SC is the result of
customary restrictions on ownership of agricultural land exercised in the past .In the
present the SC person suffer from discrimination and even exclusion from purchase
and allocation of agricultural land. So the problem of landlessness of SC still
continues with serious proportion. With the exception of some preference in
allocation of surplus land under ceiling and public land no serious effort have been
made by the government to correct the impact of the exclusion from land right in the
past.
What is the international experience in this regard ? The policies of empowering the
discriminated groups for denial of property right with respect to ownership of land
in some of the countries has been generally treated within the framework of
“reparations or compensation .. Affermative action policy does not ,in general, rest
on the goal of compensation for past injustices or denial, nor does it provide a vehicle
for redress of wealth disparities. Therefore land question has been dealt in some
countries in the framework of “reparation or compensation” for the denial of right to
land in the past.
The Malyasia programme of improving land ownership of Malaya (or Bhumiputras)
is quite relevant in this context. In order to improve the access to agricultural land the
Malya were given special land right. The Malya”special right “include the reservation
of large tracts of agricultural lands. More than 90 percent of settlers under the massive
programme of federal land development authority were the Malya community .in
Malaysia.
In India giving priority in the distribution of land to Sc has not helped. Although the
government has confirmed the land right in some cases but actual possession of surplus land
under ceiling or public land has been problematic. What possibly require is settling of people
on the land, the way Malaysia has done .The government should create a “pool of state land
acquired under ceiling and other public land like cultural waste land ’ free of legal problem
and place such pool of state land under the control of a specific authority to be created for
this purpose . Once the pool of land under “State common land pool” is created under the
government, then this land should be distributed to the landless Sc /St Household. This may
be one of the ways of distributing land bypassing the legal obstacles. So in the case of
agricultural land the method of reparation or compensation need to be used .Under a one time
settlement the Sc household should be given minimum agricultural land,as compensation for
denial of land right for several centuries. Other ways have not helped the SC to gain access to
agricultural land
Capital market -Compensatory Measures for ownership of Capital
Traditionally the Sc were not only denied ownership of agricultural land but also debarred
from undertaking any business.( except some polluting occupations) . This is reflected in a
low proportion in business .In 2001 of the total Sc house holds about 12 percent in rural area
and 27 percent in urban area were engaged in some kind of self employed business activities.
,as compared with 41 percent and 36 percent for non SC/ST household in rural and urban area
respectively.
.At present the government has intervened through the public finance institutions such as
nationalized bank and special institutions for SC/ST and the supply the capital for business
and industry operated by Sc persons .However, the private capital is completely free from
any obligation toward the Sc business who suffer from lack of financial capital.
The main issue is how to increase the participation of SC/ST in the private capital in the form
of industry and business. Some of the countries in the world such as USA and Malaysia have
developed an affirmative action policy to improve the access of the discriminated group to the
private capital in industry and business. The Indian government can learn from the policy in
Malaysia and develop a strategy of providing access to private capital. The affirmative action
policy can be develop on following line.
(a) Government and public financial institutions – The government and public finance
institutions should have a specific policy
of supply of capital to the SC/ST
businesses. A certain specific proportion of capital should be fixed for this particular
group for business and industry and other economic activities.
(b) The government should also develop some sort of affirmative action policy for the
private financial institutions including banks such that they allocate or supply a certain
amount of capital or finances to the SC/ST for industry and business.
(b) Government policy to increase the participation of SC/ST in the private capital.
At present the private capital is mainly in the form of ownership in shares ,
debentures and other financial instruments.. How to increase the share of SC/ST in
the share capital and equity in the private sector and improve their ownership in
industry and trade. The Malaysia has set up Investment Foundation and National
Equity Corporation for Malaya which is used for minority equity investment. These
institutions ensure that the minority community get the appropriate shares in the
companies share capital . Therefore, government should set up a National Equity
Corporation and Foundation to help the SC/ST to participate in the share capital of
the various companies. The legally sanctioned systematic redistribution of private
capital ownership by minority was undertaken under the aegis of new economic
policy (1970-1990) in Malayasia.The share of Malya in ownership of corporate
capital rose under this policy from 2 percent to 20 percent over the course of the two
decade .
Product and Consumers Goods market -Legal safe guards and Reservation
The SC/ST suffers from discrimination both in wholesale and retail market in
consumer goods. The discrimination is in terms of (a) access to the infrastructure such
as space, and other amenities, (b) in restriction on sale of the goods and (c) in
restriction on purchase of goods and services. The government therefore should
develop a reservation policy for the wholesaler and retailer from the SC/ST
community on the following line.
(a) Reservation in Government and Private Purchase contracts
The government and private business sector participation in the purchase of goods is
quite massive .There should be a policy reservation for SC/ST business in purchases
of several goods and commodities by the government and private sector . The
Madhya Pradesh has taken a major initiative in making a provision of certain quota in
their purchase order to the SC/ST community. This is an important way to provide
market for the SC/ST businessman and protect them from discrimination consumer
goods and market in other goods .The private sector needs to be brought under the
orbit of reservation policy in purchases of good and services from SC/ST business to
partly compensate them for discrimination faced by SC in commodity market.
(b) Reservation policy for the purchase of agricultural products
Products such as vegetables, flowers, fruits, other products including milk, poultry and others
for the purchase by the government and the private parties from the SC farmers and retailers
who face discrimination in the retail and wholesale market in the sale of several commodities
on account of untouchability and pollution. Certain quotas could be fixed in purchase by
Government and Private companies for SC businesses.
(c) Government and Private Sector Contracts –There are other contracts such as
constructions and various other works needed by government and private corporate sector
.For the government and corporate sector these contract include construction of road,
buildings, irrigation and hundreds of other activities in which a specific share should be fixed
for the SC/ST . A complete detailed policy will have to be working out for the SC/ST both for
the government and private sector.
Reservation in Private Sector education, and safeguard in Private housing
The government should develop a reservation policy for admission to private educational
institution, and of support to the poor SC/ST students.
In the case of private housing there is no need for reservation policy .However there is need
for legal safeguards in the form of anti-discrimination law against case discrimination in
renting of houses to SC.
Concluding observations
Economic and social discrimination on the basis of race, religion, ethnicity,
national or social origin exits in many nations under diverse social, economic and
political system. Practice of economic and market discrimination in particular generates
adverse consequences not only for discriminated groups but also adversely affects
economic performance of economy. In order to correct the imbalances in access to fixed
capital assets, employment and education between discriminated minority and majority
and also to overcome the imperfection in the working of the markets ( due to
discrimination related market failure) for better performance of economy ,the countries
have resorted to various remedies against market discrimination. These policies mainly
include enactment of equal opportunity act ,particularly the equal employment
opportunity act , preferential policies in employment and other spheres and
compensatory policies for denial of property right s to the minority group in the past .
India is one such
country which has used reservation policy for the
discriminated groups like untouchable and adiwasi but unlike other countries confined
the remedies against discrimination only to tiny state and public sector and excluded the
vast private sector where more than 90 percent of SC/ST still earn their livelihood .In
this sector there is no protection against the economic discrimination of SC. Due to
narrowing down of already tiny public sector, the little space that the discriminated
groups has acquired is also reduced to the minimum.. In the preceeding discussion we
have argued that due to discrimination of SC in various markers and non market
exchange, there is a necessity of remedies against discrimination for private sector to
provide safeguard against discrimination. The SC suffers from discrimination in
multiple ways in various markets. Therefore the reservation policy for private sector
should cover all markets.We suggested that , as a first step ,it is necessary to enact the”
Equal opportunity Act for private sector ( Equal Employment Opportunity Act will be
part of that general act) to provide legal safeguards against discrimination. And this will
have to be supplemented by more positive action in term of reservation in various
market including labour employment to give share and participation to the SC.. The
equal opportunity provision will have to be extended to other markets as well .Some
kind of legal, and reservation policy will be necessary for capital market, produce and
consumer market including the social service sector like private sector education and
housing on the pattern suggested above . In agricultural ,however SC will have to be
compensated by giving land for agricultural use through one time settlement ,as a
compensation for the denial of property right and injustice for long period of time.
Compensatory policies are also necessary for increasing ownership of capital and
educational development of Scheduled Caste
.----------------------------------------------------------------------------------------1
Weiner ,1983,Daniel Sabbagh 2004
2 Private Bill submitted by R.S.Gawai
3 Bhopla Document ,Madhya Padesh Government ,
4 Common Minimum Program ,U PA Government ,Delhi
5 Ambedkar intellectual contribution in articulation of reservation policy for
untouchables is contained in the three Memorandum submitted by him at various
points of times , namely ,
(a) “Written Statement presented to the Southborough’s Committee on Franchise”
Jauary,1919” in Vasant Moon (1979) “Evidence Before the Southborough’s
Committee on Franchise” Jauary,1919” in Dr. Babasaheb Ambedkar,Writings and
Speeches ,Vol. 1, Education Department ,Government of Maharashtra
(b) Statement before Indian Statutory Commission ,popularly known as Simon
Commission in May 1928
title “Statement –Concerning the Safeguards of the
Depressed Classes as a minority in the Bombay Presidency and the changes in the
composition of and the guarantees from the Bombay Legislative Council necessary to
ensure the same under Provincial Autonomy submitted by Depressed Class Institute
of Bombay to Indian Statuary Commission and the Evidencce of Dr.Ambedkar
Before the Indian Statuary Commission on 23rd Octemer 1928
(c) Written statement title “A Scheme of Political Safeguards for the Protection of the
Depressed Classes in the Future Constitution of Self-Governing India” -Appendex to
Report to of Sub Committee No.III( Minorities )(Submitted by Dr.Bhimrao
R.Ambedkar and Rao Bahadur R.Srinivasan,Round Table Conference, 1930,
( e) Proceeding of First and Second Round Table conference ,1930-1932 –(1) Plenary
Session-Fifth Sitting-20th November 1930 ,Need for Political Power for Depressed
Classes .(2) In Sub-Committee No.III ( Minorities) Second Sitting-31st December
1930 (3) In the Plenary Session( General Review) Eight Sitting-19th January 1931 Demand for safeguards of Depressed Classes in the Future Constitution.
(f) Note by Dr.Ambedkar to The Indian Franchise Committee( Lothian Committee) –
On the Depressed Classes Submitted on 1 st may 1932--.Source –Vasant Moon
(Edited) (1982),Dr.Babasaheb Ambedkar –Writings and Speeches ,Vol 2-In the
Bombay Legislative, with the Simon Commission and at the Round Table Conference
-1927 to 1939, in Vasant Moon (Edited) (1982),Dr.Babasaheb Ambedkar –Writings
and Speeches ,Vol ,”Education Development ,Government of Maharashtra .
(f
(g) “State and Minorities –What are their rights and how to secure them in the
Constitution of free India
(Ambedkar 1947)
in Vasant Moon (Edited)
(1982),Dr.Babasaheb Ambedkar –Writings and Speeches ,Vol 1 ( 1979) ,”Education
Development ,Government of Maharashtra .
6 see particularly these two statement ,(1) Written statement title “A Scheme of
Political Safeguards for the Protection of the Depressed Classes in the Future
Constitution of Self-Governing India” -Appendex to Report to of Sub Committee
No.III( Minorities )(Submitted by Dr.Bhimrao R.Ambedkar and Rao Bahadur
R.Srinivasan,Round Table Conference, 1930 Source –Vasant Moon (Edited)
(1982),Dr.Babasaheb Ambedkar –Writings and Speeches -In the Bombay Legislative,
with the Simon Commission and at the Round Table Conference -1927 to 1939, Vol
2,”Education Development ,Government of Maharashtra .( pages 546 to 556) and (2)
“State and Minorities –What are their rights and how to secure them in the
Constitution of free India
(Ambedkar 1947)
in Vasant Moon (Edited)
(1982),Dr.Babasaheb Ambedkar –Writings and Speeches ,Vol 1 ( 1979) ,”Education
Development ,Government of Maharashtra .( pages 387 to 428)
7 In this respect Ambedkar suggests “Discrimination against citizen by government
officers in Public administration or by private employers in factories and commercial
concerns on the grounds of race or creed, or social status shall be treated as an
offence. The jurisdiction to try such cases shall be vested in a tribunal to be created
for the purpose .,State and Minorities 1947 –Vasant Moon ,1979 pages 396 )