Lucknow: On Friday, July 26, Azad Samaj Party MP from Uttar Pradesh’s Nagina and Bhim Army Chief, Chandra Shekhar Azad, introduced a private member bill in the Lok Sabha aimed at extending reservations for Scheduled Castes (SCs), Scheduled Tribes (STs), and Other Backward Classes (OBCs) into the private sector. The bill, titled ‘The Reservation for the Scheduled Castes, the Scheduled Tribes and the Other Backward Classes in Private Sector Act, 2024,’ seeks to shift the current reservation paradigm, which is limited to the public sector.
The bill proposes to extend reservation benefits to SC, ST, and OBC communities in private sector establishments, educational institutions, and other organizations that do not have government financial interests and employ at least 20 people. To encourage private sector entities to implement these reservations, the bill suggests that the Central government provide special concessions and facilitate lower-interest loans through nationalized banks. It also mandates that the government present an annual report in both houses of Parliament detailing actions taken under the Act, should it be passed and receive Presidential assent. Additionally, the bill calls for mandatory rule-making by the Union government to ensure effective implementation of the Act.
The bill claims support from Articles 16(4) and 16(4A) of the Constitution, which currently permit reservations in public sector undertakings (PSUs) and financial institutions receiving government grants. In his statement of objects and reasons, Chandra Shekhar Azad emphasized the need for representation from all sections of society to ensure equitable growth and socio-economic upliftment. He highlighted the significant role of the private sector in nation-building.
Any Member of Parliament (MP) can introduce proposed legislation in both houses of Parliament, known as a Private Members’ Bill. To become an act, such a bill must pass through both houses and receive Presidential assent. These bills are only introduced and discussed on Fridays. On July 26, 31 private members’ bills were introduced in the Lok Sabha, including a bill by Congress MP Shashi Tharoor seeking to reserve 10 seats in the Lok Sabha for those below 35 years of age.
While Azad's bill focuses on reservations for SCs, STs, and OBCs in the private sector, the Congress government in Karnataka recently proposed similar reservations for Kannadigas. The Karnataka Cabinet, led by Chief Minister Siddaramaiah, suggested 100% reservation for Kannadigas in Category C and D jobs in private industries. This proposal faced significant opposition from industry leaders and within the state government, leading to its suspension for further discussion.
The proposed legislation for extending reservations to the private sector raises concerns about its long-term economic and social impact. Critics argue that it could undermine meritocracy, ease of doing business, and investment opportunities, potentially leading to social unrest. Historical precedents, such as the economic liberalization of 1991 that freed the private sector from restrictive regulations, highlight the importance of maintaining a balance between legislative compliance and economic growth.
The strength of the private sector lies in its flexibility and performance-driven outcomes. Implementing reservations could subject companies to political pressures, reduce their operational autonomy, and reintroduce issues like corruption and bureaucratic red-tapism reminiscent of the pre-reform era. Rather than fostering an egalitarian society, the introduction of such a bill might lead to significant social unrest, similar to the protests during the Mandal era when reservations were limited to the public sector. As the debate continues, it remains to be seen how the proposed legislation will navigate the complex interplay of socio-economic and political factors.
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