Disaster, unreservedly

The issue of job reservations in the private sector was first raised by the Congress Party in its Shimla Sankalp of July 2003, in which the party called for "... the start of a purposeful dialogue with private industry on how best India's social diversity could be reflected in the private sector in different ways like reservations and fiscal incentives ..."

A reference was made to it in the President's inaugural address to Parliament last June. In his press conference last Saturday, the Prime Minister responded to a question on the issue by stating that a group of ministers would be constituted to begin this dialogue.

He was also categorical in saying that he did not believe that a legislative mandate to the private sector was the answer. That should come as a relief to people who are opposed to this extension of the scope of reservations, but past experience should caution them against complacency.

Bad ideas have a way of snowballing and any assurance about legislation may simply be swept aside by political forces desperate to score points with their constituents.

The motivation for going down this road can be easily understood. There are simply not enough jobs available to satisfy the demand for them. Socio-economically disadvantaged groups undoubtedly bear the brunt of an employment drought.

However, to see reservations as a solution in a scenario in which the private sector, manufacturing in particular, is already reluctant to hire people, is myopic in the extreme.

Zero multiplied by any number is still zero. Reservations will give the private sector yet another reason not to hire any more people. The politicians supporting this move may score points based on intentions but will certainly not do so for achievement.

The enduring solutions to the basic problem are obvious. Unfortunately, they need to be repeated over and over again; their acceptability to the political class is low because they will not yield immediate results.

But, there is simply no sidestepping them if meaningful results are to be obtained. The approach has to be two-pronged. First, there has to be significant reform in the labour regulations governing the organised sector, which are a significant constraint in the growth of employment.

As the rate of growth of employment increases, some of its benefits are bound to spill over to groups that are now seeking the protection of reservations. Of course, the distribution of benefits may not be equitable in the short term, and that leads to the second pillar of the strategy.

Access to quality education, particularly at the primary level, must be increased on a war footing. There are a number of ways to achieve this, but none of them will get very far without committed financial support from the government""by way of transfers, tax exemptions, or any other means.

The cess on central taxes that the government is collecting from this year should have a significant proportion earmarked for providing access to children from the very sections of society that are the intended beneficiaries of extended reservations.