Reducing Inequity: Looking Beyond Reservations

Looking towards India’s future in 2047, there is a concerted effort to transcend the limitations of reservations and embrace an abundance mindset. The country must focus on nurturing opportunities in employment and education and thus move away from the constraints of scarcity-based thinking.

Indira Gandhi’s hypothetical reaction to Rahul Gandhi’s election rally statement, suggesting the Congress party’s intent to surpass the 50% quota cap through legislation if elected, could be one of amusement. Chowdhury’s book, “How Prime Ministers Decide,” published in 2023, delves into Indira Gandhi’s nuanced directives to her law minister in 1980, advising him to draft the Action Taken Report in a manner that addresses concerns without causing undue disruption. Recognizing the complexities surrounding quotas, Indira Gandhi understood their role in rectifying injustices and, at the same time, inadvertently discriminating against others. Presently, there’s a growing belief that reservations alone may not adequately address the injustices related to caste, gender, and class, necessitating the exploration of alternative approaches.

Looking ahead to 2047, India should prioritize ensuring equal opportunities for all its citizens by transitioning from a mentality centered on reservations to one focused on abundance, particularly in employment, education, and employability. The forthcoming government could contribute to this paradigm shift by:

1. Expanding formal employment opportunities: Addressing key disparities in wages, including the gap between gross and net wages, real and nominal wages, and disparities between government and private sector salaries. By bridging these gaps, formal employment can become more attractive, thereby enhancing national productivity and reducing labor market inequalities.
2. Facilitating migration: Enhancing both rural to urban and inter-state migration by improving urban infrastructure and creating new job clusters. This necessitates increased funding and empowerment of local governments to effectively address the needs of their communities.
3. Expanding fiscal prudence: Redirecting government spending towards capital expenditure and ensuring that government employment does not offer wages above market rates. By aligning government wages with market standards and promoting productivity, the economy can avoid unnecessary financial burdens and promote accountability.

Indira Gandhi’s fear that strong states lead to weak nations seems to have percolated down to modern politicians, who mistakenly believe that strong cities can lead to weak states. Hence, they have failed to devolve money and agency to local governments. Currently, India’s 2.6 lakh municipalities and panchayats account for 3% of state spending and 15% of employment, while the number stands at about 50% for China and the US). We need new job clusters and better cities, as prioritizing urban development will not only boost economic growth but also enhance women’s participation in the workforce and lead to the creation of high-quality jobs.

In addressing the quota issue, it’s essential to learn from historical experiences. Reservations, while initially serving as a means of social justice, can also lead to unintended consequences. Therefore, India must embrace a comprehensive approach to education, employability, and employment that fosters inclusion, justice, and ambition, ultimately moving beyond the limitations of reservations. Starting with addressing the disparities in salary structures is a pragmatic step towards achieving this goal.

The Original Article ‘Why India needs three salary wedges to look beyond reservations to reduce injustices’ jointly authored by Manish Sabharwal and Kartik Narayan and was published in Economic Times on the 21st of May 2024.