Reservation Losing Appeal as Economy Expands

(Originally appeared in the 1990s in the Times of India, as published in M. D. Nalapat's book "Indutva", Har-Anand Publications, 1999)

The concept of the melting pot has held social analysts in thrall.

Multi-ethnic countries such as the U.S. have been characterised

as places where this concept applies. However, an examination

of the reality, even in the U.S., will bring out that rather than a

'melting down' of different ethnic groups into a homogeneous

mix, there is a coexistence—sometimes placid, sometimes tense-

of different groups. There is, in other words, very little melting

taking place in the pot.

This parallel development of different ethnic strands exists

not just in the racial sphere, but in the cultural as well. In the U.S.,

for instance, the statistical readings for variables such as unwed

mothers, drug addiction and illiteracy are significantly different

for groups such as, WASPs (White Anglo-Saxon Protestants),

African Americans, Asian Americans and Hispanics. These create

invisible barriers in the all-important business sphere, where

WASPs do much better than either African Americans or

Hispanics.

India, too, is a congeries of ethnic groups, and here—despite

the frequent use of the 'melting pot' analogy—the mingling of

communities (through, for example, marriage) has been the

exception. However, unlike the U.S., this country has a well-

developed affirmative action policy implemented through the

mechanism of reservations. As a consequence, previously

disadvantaged groups have increased their representation in

administration, while sub-groups within them have reached the

stage of social take-off. This fact has been taken note of by the

judicial directive that the 'creamy layer' within the backward

communities be excluded from the benefits of reservation.

While affirmative action for the backward classes took deep 

root in the southern states of Tamil Nadu, Kerala and Karnataka, 

the forward castes retained their dominance in the Hindi- 

speaking states. A Karpoori Thakur or a Ram Sundar Das could 

do very little to dent the hold of the forward communities in the 

administrative machinery. However, the situation has changed 

with the coming to power of the SP-BSP in Uttar Pradesh and the

Janata Dal in Bihar. While within both regimes there is a

jockeying for positioning between different backward

communities, on one issue all such communities are united, and

this is on keeping the forwards out.

Why is it that four years ago, when V. P. Singh pulled the

Mandal rabbit out of his Kashmiri cap, there was such an outcry,

while today-when the backward class movement has become

such more strident—there is relative calm? The difference may

be a result of the liberalisation process set in motion in 1991. The

central motif of the entire process has been the steady

downgrading of the governmental apparatus as a system of

employment generation and decision making. Till 1991, it was

taken as axiomatic that growth in government was socially

beneficial. Very seldom were the hidden costs of such growth

examined. Indeed, few realised that the chronic inflation of the

currency and the anaemic performance of employment generating

units was linked to the expenses of maintaining a state structure

that, in many of its parts, was functionless.

Granted, the Narasimha Rao government has lost some of its

earlier reformist zeal. In particular, progress in the privatisation

of PSUs and reduction of subsidies has been slower in 1993-94

than the steps taken in 1991-92 would have led one to predict.

But, by placing on governmental units the onus of proving their

usefulness—rather than taking it as given—and by reducing the

flow of subsidies to loss-making units, the government has

helped generate a paradigm shift in social attitudes. Today, as

compared to 1990s, the sons and daughters of the middle classes

are far less likely to see their future as employees in a government

unit. On the contrary, these days the 'best and the brightest'

gravitate to the private sector, where rewards follow performance

more closely.

This displacing of the public sector by private industry as the

main engine of growth and employment has reduced the

significance of the Mandal formulations in middle class lives.

With the share of the state shrinking in the total employment pie,

the disadvantage caused by reservations will also be reduced.

Indeed, an argument can be advanced that those communities

which do not enjoy the benefit of reservation may actually find

their comparative positions improving, in that they will tend to

avoid the (declining) state sector and flock to the (growing)

private segment. An example of this is Tamil Nadu, where, from

1967 onwards the Dravida movement began to squeeze out the

Brahmin community from administration. As a consequence,

many went into business and thrived.

Why is it that the question of reservations has generated

much less friction in the three southern states compared to the

Hindi belt states? The reason could lie in the fact that the latter,

because of their statistical dominance in Parliament, had till 1991

enjoyed a flood of government investment. Even today, the role

of the organised private sector is less significant than the

governmental one in most of the Hindi belt. Whether as a

policeman or as a village officer, employment in the state

machinery is still a respectable option in the region. As a

consequence, any reduction in this due to reservations will be

contested. The reply to this is not (the politically impossible task

of) ending reservations, but creating conditions in the Hindi belt

for a faster growth of the private sector, a sector which is not the

parasite of the state sector, which itself is a parasite of the

exchequer.

For this to happen, standards of governance—especially law

and order—will need to be significantly improved. Unhappily,

such a process does not as yet seem to be occurring. Neither

Mulayam Singh Yadav nor Laloo Prasad Yadav are noted for the

high quality of their governance. By concentrating on getting

benefits from the shrinking govemment cake, rather than on

building up systems for private sector expansion, both of them

are—albeit unwittingly—blotting their political futures, for only

economic expansion will generate the conditions needed for

them to retain their popularity.

The danger in the populism seen in these two states is that,

on seeing that the governmental goose is no longer generating

sufficient political rewards, a cry may go up to extend reservations

to the private sector as well, thus killing the golden goose. So

long as reservation is confined to the state sector, the disincentives

inherent in it will not in themselves be sufficient to weaken the

pace of economic expansion. However, should it be forced on the

private sector, the negative effects could abort this country’s

nascent attempt to enter the economic major leagues.

What then is our defence against such a contingency? The

same as has acted as a bulwark for the liberalisation process. This

is the emergence of the first pan-Indian class, which is the Indian

middle class.

The process of economic expansion has created a class of

individuals who are ’at home' in most of the larger cities of India,

whether it be Calcutta or Madras or Bombay.

Should this development proceed, the middle class is likely

to be the country's largest voting bloc, rivalling farmers or even

the backward classes in number. The significance of this is that

this class, being very economics-centred, is likely to support that

political grouping which promises economic growth with

reasonable price stability. The future may, after all, be with

Manmohan Singh rather than with Mulayam Singh.