The Reservation Debate in IndiaYou're wondering why someone would write another article on the reservation debate in India. You are also pretty sure that the author will claim that his article provides a "different perspective". Well, I couldn't blame you, but since you have taken the pain to read thus far, a couple of more paragraphs wouldn't hurt too much, would it?
An economist friend of mine summed up the economic context of the debate quite succinctly. Simply put, reservation is a source of friction, which would inhibit growth in the economy. For the economically naive, an example might help. Suppose Motorola was considering setting up a cell phone plant in Chennai, but thought that Guangzhou in China was an equally attractive proposition. The fact that they would now have to go through the cumbersome process of maintaining records of their employees and may find recruiting employees difficult might help them make their decision in favour of the latter. Thus, reservation, an economist might argue, would result in the total pie being reduced, or more likely, not growing as fast as it could. Any politician worth his salt would argue (or rather yell into the microphone) that reservation would bridge the spawning inequality in society and thus preserve the social fabric of the country. So, who is right?
The answer, of course, is that both are correct. The point of this article is not to decide who is right (or more right), but to consider objectively whether the methodology of implementing reservations is satisfactory. We have established, hopefully, without doubt, that there are conflicting consequences of reservation. There are social benefits, which may ultimately yield economic benefits, but at the same time, there are clear economic pitfalls, at least in the short-run. So, should the reservation percentage be increased from 22.5 % to 49.5 % by bringing OBC's into the reservation fold? The quantum of the percentage is based on the percentage of OBC's in the population (various statistics put this number in the range of about 30 %*). Of course, it is also not coincidental that a Supreme Court ruling prohibits reservations greater than 50 %.
What worries me is not the reservation policy per se but the manner in which it is being implemented. My concern is exemplified in the following excerpt of a Harvard Business Review article cheekily titled "They Bought In. Now They Want to Bail Out."** :
"Opposition cannot be overcome until the CTO breaks this lengthy, complex project into segments and stages that can separately demonstrate value and gain the confidence of the system’s ultimate users"
The reservation policy, in my opinion, needs to be implemented in phases. The idea of implementing a quantum jump might work, but it might not. And I doubt this policy decision has been made with a Risk Management Analyst on the team. I can't claim to be an expert on process management in firms. But I do know that Toyota's policy of continuous improvement is what makes it the most profitable auto-firm in the world.
The experience of the successes and failures during
a phased roll-out would enable the government of the day to make the scheme
more targeted, and those who feel they are being unfairly targeted may
be pacified. More importantly, implemented better, the scheme may work
and actually produce the desired results !
References
*http://en.wikipedia.org/wiki/2006_Indian_anti-reservation_protests
** McNulty, Eric; Leonard, Nathaniel; McAfee, Andrew; Gilway, Barry J.; Freeland, John. They Bought In. Now They Want to Bail Out. Harvard Business Review, Dec2003, Vol. 81 Issue 12, p28-38.