Andy Mukherjee on a difficult issue in India

I am by no means an expert in India but as one the emerging markets with the highest potential for future sustainble growth the country interests me. One of the more peculiar yet very important characteristics of the Indian society is the caste system, an old system of hierarchial endogamous social groups which, as you shall see, still lingers. Consequently, Andy Mukhjerjee from Bloomberg writes in his column about a curse which still haunts India.

"Indian Prime Minister Manmohan Singh opened a Pandora's box last week by asking businesses to ``voluntarily'' commit to greater diversity in their workforce.

The captains of industry were spooked, seeing in the apparently gentle appeal a precursor to pernicious caste-based reservations of jobs.

The fear isn't irrational. Singh's coalition government, upon coming to power in May 2004, stated clearly in its work program that it ``is very sensitive to the issue of affirmative action, including reservations, in the private sector.''"

So what we have is basically the question of caste based quotas in the labor market so that more will benefit from India's economic growth. Since 1950 it has been constitionalized that 22.5% of job positions in the public sector be reserved to scheduled castes and tribes - should this policy be extended and pursued further? Indian business does not like the idea because it goes against the principle of hiring by merit and thus hurts the competitiveness. 

However more important I believe is the main argument presented by Andy.

It's undeniable that more people must benefit from India's economic growth. The danger lies in using caste to make growth more inclusive. A worse folly is for politicians to pretend that caste-based quotas would encourage diversity.

(...)

Caste-based quotas are the antithesis of affirmative action.

India has to obliterate caste-based identities from the national consciousness. It shouldn't be the country's goal to make lower-caste Hindus more prosperous while they continue to be identified as members of a distinct group.

(...)

... once employers start discriminating, Indians will, instead of forgetting about their own and their coworkers' castes, become more conscious of it, and this awareness will reinforce old prejudices.

The curse of caste will live on.

There is no doubt that Indian policy making on this matter presents a tough walk on the edge between addressing the realities without exacerbating the social stratification.