The Hindu Business Line : Reservations on a policy

Last week the Prime Minister said at a Confederation of Indian Industry meeting that the private sector would do well to make sure that no group in society felt "excluded from enjoying the fruits of rapid economic growth," suggesting in particular that it "seriously consider enhancing educational and employment opportunities for weaker sections in an affirmative manner." As to how companies could do this, Dr Manmohan Singh said that they could assess, at the firm level, the diversity in the "employment profile and commit (themselves) voluntarily to making it more broad-based and representative."

Clearly, the Prime Minister cannot be faulted for pursuing the line of "inclusive social and economic growth," but the question is whether his suggestion is wise and workable. The issue boils down to the kind of "social responsibility" industry must bear and to what extent this concern will impinge on the business of producing goods and services in a manner that is globally competitive. In other words, the crux of the issue is how industry can benefit society at large without hurting its own competitiveness.

There can be no question that those (individuals and companies alike) who create wealth in diverse spheres have a responsibility to enhance social welfare in whatever way they can — as by setting up sports stadiums, medical facilities, libraries, and educational and vocational training centres, among a host of other projects which would be used more by society at large than by themselves (read, employees in case of companies). But the Prime Minister has specifically talked about job reservation for certain sections, which is an entirely different matter on two grounds. First, the "social responsibility" aspect has been sectorised (which carries within it the germs of exclusivity) and, second, the implementation of the proposal cannot be neutral in the generation of wealth, which alone can enable industry discharge effectively the suggested "social responsibility" functions.

Since a job-reservation policy may lead to unemployable people being recruited with adverse effects on the private sector's ability to contribute efficiently to the creation of national wealth, it is clear that the Prime Minister's suggestion is flawed. This apart, job reservation in the private sector will not make any appreciable dent in the larger problem of social and economic backwardness because of the small numbers involved. Such a policy would, therefore, be more of a shortcut to economic disaster than being an effective tool to promote more inclusive growth, which certainly is not one of the objectives of Dr Singh's Government.

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