Reservations in Private Sector- ‘Economic Insanity’?


Whether India should have a caste based reservation system or not has long been a point of debate. This issue was recently highlighted with the news of Congress  vouching to push for a ‘job quota’ for the underprivileged sections of the society in the private sector.  According to the party, this would enable the growth in the coming years to be more equitable and inclusive.  However the news has attracted a lot of criticism by the opposition and certain sections of the Industry.  Manish Sabharwal, the founder of a recruitment consultancy in India, in an interview with Business Standard went on to call the proposal an ‘economic insanity’ given the informality in the labour market in India.

Are we ready to compromise on growth?

The private sector is known for its innovation and performance and bringing the quota system in this sector would impede upon the progress of nation which is reliant on this sector for generation of new ideas and building a competitive advantage. Reservation of such kind will create a workforce incapable of meeting international standards resulting in loss in competitiveness of industries and promotion inclusion at the cost of growth.

Given the current situation in India where growth has slid down from an average of 8.5% before the crisis to a 4.5% in the previous decade, the government’s focus should be on getting the economy back on track and making the labour force more capable.

The reservation system in India started with an objective of uplifting the underprivileged sections of the society, who were earlier discriminated against  in the deep rooted caste system in India. However the reservation system of the kind that is prevalent in India is working to uplift one section of the society at the cost of the other. What India has to failed to do is this context is to build capacity. Mere provision of a place in a company or education institute would not help in uplifting the weaker section, the concentration should be on generation of skill and competitiveness.


reservations in education


India as a nation is battling many challenges when it comes to its labour regulations. And till the time the labour laws are not made more flexible, we cannot imagine the reservation system to help in creating more jobs. Given this, the proposal also comes with the risk of leading to an increase in the unemployment rate following the displacement of people in the private sector. Another cause of concern is that the reservation policies when misused add to the corruption in the economy, robbing the deserved candidates of their right.


Empower the underprivileged rather than sympathising with them.


empowerment and not reservations


If reservation of any kind has to be put into place it should be at the very basic level. As mentioned earlier, the focus should be on creation of capabilities and skill. For any nation to grow, the best minds must be put to use. The quality of the education system in India needs to be uplifted in order to provide a equitable platform for all sections of the society to compete fairly. While programs like the Sarva Shiksha Abhiyan (Campaign for Education for All) have helped, the current state of school facilities is far from satisfactory,  with a major proportions of primary schools in the country still without essentials such as drinking water, toilets, furniture, teaching aids and books, playgrounds and computers. The learning achievements of students in semi-urban and rural areas is poor as compared to their counterparts in urban areas. The high student drop-out rates and teacher absence rates raise further questions on the effectiveness of the education system. As a nation we should hope to empower the underprivileged rather than sympathising with them and giving them  the option to escape the hard route. Offering them the same quality of education and training will go a long way in developing them and helping them rise above the ‘underprivileged’ status.


A second way of promoting inclusive growth would be creation of jobs through simplification of labour laws which prevent companies to hire contract labour in their core business activities.


The reservation system is fair as far as it creates skills and makes the underprivileged more employable. For this it is imperative for the government to identify the section that needs to be uplifted and support them with financial aid and capacity building (free quality education and training). Focusing on reservations in jobs as a way of uplifting the weaker sections is a very myopic view of the situation. These people need to be made tougher and capable of fighting out a fair battle.


– Jasmine

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Jasmine Makkar is a first year PGDM- Finance Student at SPJIMR. She has completed her graduation in Economics(H) from Lady Shri Ram College, DU. She enjoys writing, dancing and is a theatre enthusiast.

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Jasmine Makkar

Jasmine Makkar is a first year PGDM- Finance Student at SPJIMR. She has completed her graduation in Economics(H) from Lady Shri Ram College, DU. She enjoys writing, dancing and is a theatre enthusiast.


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