India Intelligence Report

   GoM Stops Pvt Sector Quota Proposal


A Group of Ministers (GoM) headed by Federal Agriculture Minister Sharad Pawar have ruled that the proposal to reserve employment in the private sector is not politically desirable, feasible, or legal and has asked that the proposal be shelved. The GoM consulted a varied group of experts including three legal experts, corporate representatives, and social activists the panel concluded that “it was not possible to provide reservations for the SCs and STs in the private sector without amending the Constitution.” Even if it managed to amend the Constitution, it “would not be able to affect the basic structure of the Constitution.”

To amend the Constitution, the Government needs 2/3rd of the Parliament to support the amendment—the Government is in minority and needs the support of the communists, and regional parochial parties. The opposition party Bharatiya Janata Party has already said that it will oppose this move. Even it manages to hammer out a compromise, the inability to “affect the basic structure of the Constitution” is a legal way of saying that the amendment may be unconstitutional and would be struck down by the Supreme Court.

A few days ago, Federal Social Justice and Empowerment Minister Meira Kumar asserted that “time was running out”  for the private sector to implement voluntary reservation as the Government was planning to bring in legislation to force the issue down the corporate throat. Industrial bodies have consistently decried the proposal insisting that it will lower the quality of work, cause capital flight, and lower confidence of investors. It was instead proposing an affirmative action program that guarantees that there will be no discrimination based on race, sex, or social parameters. The Government was not happy with that proposal and continues to be unhappy claiming that this is not enough. Corporate bodies have threatened to take the matter to court if the Government tried to force its will illegally.

Despite expert advice, opposition from directors of various premier institutions, and academicians, the Chairman of the oversight committee charged to oversee the implementation of reservation of 27% for Other Backward Classes in these institutions has said that he wants the implementation to start in 2007. Moily’s plan is start the new reservation plan as the first phase in premier institutions such as Indian Institute of Technologies (IITs), Indian Institute of Management (IIM), All India Institute of Medical Sciences (AIIMS), Jawaharlal Institute of Postgraduate Medical Education & Research (JIPMER). In the second phase, he wants Central post graduate institutions and institutes to be included from 2008-09. And, as the final phase he will include the private unaided institutions to be included by 2009-2010. Veerappa Moily insists that he wants to debate the definition of OBCs and the 27% reservation mandate and concedes that private unaided colleges are out of the reservation ambit as the Supreme Court had already ruled that the Government cannot force its will on such colleges. Instead, he wants to push the implementation on private unaided colleges to 2009-2010. It is not clear why he think that this may be Constitutional or legal by then.