Private sector’s poor score on social justice

Indian industry’s transition from philanthropy to social justice requires that employment and outsourcing policies are consciously guided by the principle of equality

A majority of jobs, today, are in the private sector. This has been particularly so post liberalisation, coming hot on the heels of shrinking public sector jobs and the continued divestment in public sector undertakings. Evidence of differential access to opportunity in the private sector has raised the question if the benefits of affirmative action could truly bring transformation in society if a large section of the workforce sorely lacks diversity. The government has gradually given up powers it enjoyed until the 1990s – popularly known as the period of ‘the licence-permit raj’. With innovations in technology, too, the need for manpower has drastically reduced.

Citing this context, a Dalit rights organisation in Andhra Pradesh recently demanded that the Union government come up with legislation to provide reservation for the Scheduled Castes (SCs), Scheduled Tribes (STs) and Other Backward Classes (OBCs) in the private sector as well.

As the private sector expands, more jobs move there. Herein, a problem arises for the Indian state: Where do the SCs, STs and OBCs fit in? The private sector does not permit reservation as, in the words of the Federation of Indian Chambers of Commerce & Industry, it would compromise “merit and competitiveness” in Indian industry. The gross hypocrisy of the same industry is evident in nepotism in promotions to top leadership. The present conversation, however, must focus on what the industry has been doing to correct the historical wrongs oppressed castes have been subjected to by society. We are talking of reparations for social injustice.

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Does the private sector not have an obligation to contribute towards building an equitable society? Should it not be committed to inclusive growth? After all, it enjoys huge benefits from the public exchequer — land at low prices, subsidies, incentives and tax concessions. Should the private sector be concerned only with its own prosperity and not that of those who remain at the bottom rungs?

The private sector might refuse the concept of reservation. But what about affirmative action? What about equal opportunity? These are policies followed by businesses even in western countries to provide jobs to racial and ethnic minorities. Western businesses were historically biased in favour of dominant communities. Along similar lines, Indian businesses are prejudiced in favour of privileged castes. The need for reform is evident and undeniable.

Studies have shown that entrepreneurs and higher executives in India’s private sector are mostly privileged castes. They were historically privileged to take higher positions. They also enjoyed the advantage of powerful social capital, having people to recommend and help them everywhere.

The marginalised castes lost out because they not only lacked the educational, familial and cultural background, but also references from higher echelons of the kind the advantaged castes enjoyed.

Unfortunately, this continues to be the case. According to the ‘State of Working India’ report published by the Centre for Sustainable Employment, Azim Premji University in 2018, privileged castes were “overrepresented” in high-paying occupations (professionals and senior managers) and Scheduled Castes and Scheduled Tribes were “overrepresented” in low-paying, elementary occupations. This is a far cry from inclusive growth.

Reservation

The industry can procrastinate on affirmative action only at its own peril. One of the reasons why reservation in public jobs and college admissions for SCs, STs and OBCs was introduced was to prevent the collective discontent of these communities from bursting into rebellion. Such a scenario would pose a serious threat to the stability and security of the country.

It was about a decade after the Congress opened up the economy that the party sensed a growing unease among the disadvantaged castes that they were going to be falling behind in terms of employment with the shrinking of the public sector and the expansion of the private sector. “What is there for us in liberalisation but exclusion?” the leading voices of these communities said, asking for a quota in the private sector.

In order to address this discontent, the Manmohan Singh government set up a Coordination Committee on Affirmative Action for SCs/STs in the private sector in 2006.

Affirmative action was the middle path the government chose in order to keep both the marginalised sections and the private sector happy. It was a kind of guidance—not a compulsion—to the business class to ‘accommodate the unease’ of the marginalised communities.

The top leaders of the Federation of Indian Chambers of Commerce and Industry (FICCI), Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Confederation of Indian Industry (CII) joined the committee, which worked under the PM’s office, and agreed to implement affirmative action ‘voluntarily’.

The committee drew up a voluntary code of conduct (VCC) for members to commit to work on a 4E initiative — education, employability, employment and entrepreneurship — of SCs and STs.

Affirmative action

The progress on the affirmative action taken by the industry has hardly been remarkable. A report in 2019 — 13 years after the committee was set up — showed that only about 19% of the 17,788 member companies of the three trade associations had adopted the VCC. Even these companies had worked largely on just three of the 4Es, education, employability and entrepreneurship, and had not focused on the crucial ‘E’ — employment.

They had given free education, coaching and scholarships to 3,11,218 SC/ST candidates, vocational training to 6,53,347, entrepreneurial training to 18,901 and employment to 1,27,973. Considering the span of 13 years, they had hired a mere 9,844 SCs/STs per year.

Is that an impressive figure? Does it prove the industry is fostering the structural changes required? The companies do not even reveal who these 9,844 SCs/STs were. Were they from among the candidates whose education and training it supported each year? Or were they hired in the low-paying jobs where SCs and STs were already overrepresented, and counted as affirmative action? Or were contract employees included in this figure?

Remedying inequalities

It is clear that what the industry is doing in the name of affirmative action is not effective in impacting society. Instead, it has become just another form of philanthropy. However, in the neoliberal economy, they are the job creators. They have to go beyond the corporate social responsibility insignia they have worn for years on the lapels of their coats. The era of charity is over. This is the era of social justice. A time for private actors to partner with the State in addressing and remedying social inequalities.

The oppressed castes, today, face two problems with regard to employment in the private sector. One is exclusion; the privileged castes control appointments and contracts, and are found to be nepotistic. The industry has to reverse that trend. It has to guarantee that its employment and outsourcing policies are consciously guided by the principle of social equality.

The second problem is the ‘overrepresentation’ of oppressed castes in low-paying jobs. The industry has to pick candidates from deprived castes for high-paying jobs. It has to reorient its training programmes to equip such employees for higher positions. And in such numbers that the dominance of the overrepresented castes ends. That will be the Indian industry’s transition from philanthropy to social justice.

(Arun Sinha is an independent journalist and the author of ‘Against the Few: Struggles of India’s Rural Poor’)