Friday, March 5, 2021

Reservation in Private Sector Jobs

Reservation is considered to be a positive discrimination to undo the social injustice and inequalities metted out over centuries but people have varied views about the same and India is not an exception to it. Over time people from all spectra of life willingly or unwillingly have accepted and come to the term with the reservation on the basis of caste in the government jobs and education in India. But of late people belonging to the Unreserved (UR) category and creamy layer of OBC (Other Backward Caste) have been becoming very vocal against the caste based reservations as it makes difficult for them to get government jobs and admission in government education institutions (Kumar, Pratap, & Aggarwal, 2019). Considering these disadvantages, there was demand for reservation on the basis of income which now has been accommodated through a new legislation by the Indian Parliament for the Economically Weaker Sections (EWS) of society (MSJE, 2020).

The failure of economic policies at domestic level often lead to the air filled with protectionism to nurse as well as curb the popular. The protectionist tendencies of the central governments of the nations are often found to transact to the states to inspire them to indulge in such protectionist practices ignoring the fact that such practices in domestic markets often have only emotional and notional value than any empirical evidence of bringing in any substantial benefits to the economy.

A large number of empirical evidences suggest that protectionism of any kind often leads to inefficiencies in economies (Ostry, 2019). However, to some extent, the limited protectionist approach at the policy level and into the economic responses at the national level against import and dumping has quite different dynamics due to heterogeneous global market conditions than such protectionist practices in domestic (homogenous) markets. The ongoing trade war between the US and China is an example of this protectionist approach and such trade wars are inevitable and would continue to haunt the international trade due to large numbers of reasons.

From the experiences of India with the caste based reservation for more than seven decades, it is now well established but never acknowledged fact (to remain politically correct) that reservation has some positive impact but in a very limited manner. Even after more than 70 years of its implementations, it has not been able to achieve the stated goals of making an equal society. Rather it has widened the slits in the society and perhaps caste has become more prominent than ever (Osborne, 2001)!

There have been demands for reservation in the private sector by the political class (caste based) on the basis of caste to appease its constituencies since long. Similarly there also have been demands for reservation to locals in employment mainly backed regional or state level parties like Shivsena. Shivsena even had mobilized a massive movement for the same decades back. However neither society nor the government ever found this demand to be genuine enough to ponder about. But in the post pandemic world things seem to have changed perhaps for bad.

In many countries, states at different times have resorted to protectionism against people coming from other states or countries. Now it seems that Indian states are inspired to resort to protectionism! Haryana has enacted a legislation that makes it mandatory for the private sector to provide 75 percent reservation in the jobs that offer salary of less than ₹50,000 to local job seekers. Many other states are also contemplating such moves and in coming days, may join the chorus!

Such legislations might generate positive sentiments for the local governments for some time but in the medium to long term it has adverse impact. This trend will cost India dearly; nationally, socially and economically. It is quite possible that one day one state in order to appease may come up with a law that bans the goods produced outside the state! What would be the consequences of that law?

It is time for India to revisit the concept and foundation of reservation for a better future and ask a few difficult questions. Would such legislation be beneficial to Indian economy as a whole and states in general? Isn't India on the way to undo all the efforts of creating one market and can India afford this new type of malaise? Is the central government unable to see the reminiscences of this new movement?


  • Kumar, D., Pratap, B., & Aggarwal, A. (2019). Affirmative Action in Government Jobs in India: Did the Job Reservation Policy Benefit Disadvantaged Groups? Journal of Asian and African Studies, 145-160.
  • MSJE. (2020, Feb 5). Reservation for Economically Weaker Section. Retrieved from PIB:
  • Osborne, E. (2001). Culture, Development, and Government: Reservations in India . Economic Development and Cultural Change, 659-685.
  • Ostry, J. (2019, March 13). Why protectionism spells trouble for global economic growth. Retrieved from World Economic Forum:
- Dr. Rajeev Kumar Upadhyay

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