Bite the Caste Bullet

21Apr09

Caste inequities can be reduced only by highlighting caste and related differences.  It’s time India Inc. went from being caste-blind to becoming caste-sensitive.  Following is an article from ‘Outlook Magazine’ directly interacting with Indian Corporate Stalwarts and testing their conditioned views.  Thanks BC !

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You don’t take a person who, for years, has been hobbled by chains, bring him to the starting line in a race and say ‘ you are free to compete with all others’, and still justly believe that you have been completely fair.”

Former US President Lyndon B Johnson in a famous 1965 speech that laid the foundations of affirmative action there

All this while, the Tatas embraced the very neutral approach to hiring that Johnson cautioned against, and they thought they were being fair. Much of corporate India still believes in a workforce that is alive only to merit, with its dubious definitions, and blind to caste, and they think they are being fair. The numbers mock at them and tell them that scheduled castes (SCs) and scheduled tribes (STs) constitute around 24.4% of the population, but make up a fraction of the workforce, and that caste prejudices and inequalities run deep in Indian society. Yet, industry captains still don’t think they need to redefine ‘fair’.

The Tatas, though, are now doing a rethink. The $62.5 billion, 350,000 people group has finally bitten the caste bullet, and has quietly undertaken an elaborate caste profiling of its workforce across all its major companies. Over the past few months, the group gingerly distributed forms to employees, asking them to fill in their caste information if they thought it fit to do so. Says Jamshed J Irani, Director, Tata Sons: “Over 99% volunteered their caste status without much ado.” Tata veterans were surprised by the findings. “We thought we had less (dalits) than what we have,” says Irani.

Scheduled castes and tribes constitute 24.4% of the population, but make up a fraction of the private sector workforce
Once the data was collected and analysed, the group got to work correcting caste imbalances across its plants, by focusing on eastern India, for instance. Now, it is hiring, training and integrating dalits into its companies, like never before. It has put in place a “positive discrimination” policy, a deliberate bias towards dalits in the recruitment process. Under this, all else being equal between competing candidates for a job, or even if a dalit candidate’s scores are slightly lower than the others, the job would go to the dalit. This is the first time the group has shown a willingness to put caste above merit, even if only marginally so.

“I was the one who was against caste profiling and kept it at bay in the group for decades,” confesses Irani, who also heads the council for affirmative action of the Confederation of Indian Industry (CII). But in finally doing so now, the Tatas have shattered prevalent mores of the Indian private sector, which has been running scared of the dreaded c-word. From being a feisty supporter of the merits of being casteblind or caste-neutral, the group has flagged its clear intent of being caste-sensitive, if not caste-focused.

The Tata initiative is, perhaps, for the first time, a formal, structured, coherent caste exercise, with a clear intent, has been undertaken in corporate India. A few companies had taken reluctant, half measures to dissect their workforce and put out guesstimates when the debate on affirmative action in the private sector was triggered by the UPA government three years ago.

India has an affirmative action policy in the generic sense of the term, with reservations in the public sector and in education. The private sector, though, largely remains untouched, and that status is increasingly being questioned in achieving the desired ends.

In 2004-05, in rural areas, 47.6% of the population of STs and 35.8% of SCs were living below the poverty line; for upper castes, the corresponding figure was 16%. Even in urban areas, the difference was stark (See graphic on page 27). These numbers serve as a grim reminder of the centuries of discrimination and prejudices, overt and covert, against SCs and STs. They are a commentary on the failure of our education system and merit-based employment system to correct those inequalities and change social mores.

They are a cry that old, passive approaches have failed to uplift these disadvantaged. A new, active approach is needed, and it has to pivot around the private sector. It might be very inconvenient for the private sector to put caste above the conventional norms of merit. But that is the only way to correct centuries of deliberate and systematic injustice meted out to dalits.

But this is akin to walking a minefield. It will draw strong, explosive reactions from either side. Caste mapping in the private sector was always perceived to be fraught with danger. Industry captains felt it would only exacerbate caste divides, open old wounds and foment friction among the workforce, and lead to a loss in productivity and create turmoil on the shop-floors and in boardrooms.

“As a society, we are moving out of a caste-based system. Wouldn’t going back to caste be regressive?” asks Bharti Gupta Ramola, India Leader for Transaction Practice, PricewaterhouseCoop ers (PwC) India. While Ramola, a member of PwC’s global gender advisory council is open to debate, she hasn’t yet figured out how to approach the caste conundrum. What she is certain about is the persistence of discrimination in Indian industry. “We do tend to hire people like ourselves. Passive biases often come into play,” concedes Ramola.

‘Positive’ Reservations

Caste profiling and consequent corrective actions could also draw charges of ‘reverse discrimination’ by upper castes. Still, this is the way to go. The Tata exercise is significant for its scale, reach and the potential to change the course of the Indian private sector. A few others are also walking a similar path in their own small ways.

The Pune-based, Parsi family-owned, Rs 500 crore Forbes Marshall Group, for instance, is beginning to draw heavily from the US experience with black Americans and other minorities to craft a robust affirmative action and diversity policy. In order to shatter myths around affirmative action, what the Tatas and companies like Forbes Marshall are doing needs to become a movement, a covenant, a law. But the going has been painfully slow.

After an initial burst of bombast over the issue of inclusive growth, the government too, especially the Prime Minister’s Office (PMO) and the Department of Industrial Policy and Promotion (DIPP) of the Ministry of Commerce and Industry, had stepped off the pedal in recent times. It was earlier agreed that caste data would be the first step in the long journey of fostering affirmative action. “We cannot cripple Indian industry by imposing measures when we expect them to be competitive,” says Gopal Krishna, Joint Secretary, DIPP. “In our interactions with industry, it was made clear to us that moving from a non-caste approach to a caste-centric one would be incendiary. Therefore, we didn’t push for caste surveys.”

The stand is symptomatic of the UPA government’s ambivalent approach to affirmative action. When asked what Indian industry had to show on ‘voluntary’ affirmative action measures apart from a few, tentative skills and entrepreneurship development programmes that benefit a miniscule few, an official in the PMO turned apologist for Indian industry.

This, when governments worldwide are playing interventionist roles. In the US, for instance, the Office of Federal Contract Compliance Programs (OFCCP) makes it mandatory for companies with 50 or more employees and government contracts of $50,000 or more to implement a written-down affirmative action plan. For construction companies, the OFCCP can specify clear ‘goals’, or targets for employment of black Americans and minorities. Companies need to show ‘good faith’ attempts to achieve the goals outlined.

Although affirmative action is not mandatory in the US, the government there does exercise its choice of not doing business with companies unwilling to accept affirmative action plans. Few US companies can afford to ignore the billions worth of government contracts—as of late-1990s, the latest numbers available, 400,000 corporations covering about 42% of the private sector workforce are under OFCCP purview. And if they deviate from it, they have to pay. In 2008, the OFCCP won a record $67.5 million in back pay, salary and benefits for 24,508 American workers who had been subjected to employment discrimination—a 133% increase over 2001.

The goal of a casteless society can perhaps be achieved only by highlighting caste and other differences during the journey
Interestingly, while the UPA government played footsie with industry for three years, in early-2008, the Mayawati government in Uttar Pradesh (UP) put in place an initiative similar to OFCCP, described as “new positive reservations” in all public-private partnerships (PPP) and projects that seek government assistance in any form, be it land or subsidies. Jobs are to be reserved for SCs (21%), STs (2%) and other backward classes (27%) in all PPP projects. For government-supporte d projects, the break-up is 10% for SCs, 10% for OBCs (including religious minorities) and 10% for weaker sections of upper castes.

The effect of these “new positive reservations” should have been captured in the Rs 52,000 crore worth of infrastructure projects UP has commissioned in recent times, including the Taj and Ganga expressways. “It’s too early to say. Projects are just getting off the ground,” says VN Garg, Principal Secretary to the government of UP, who is steering the programme. “We are setting up a project-monitoring committee. Moreover, we want to tread softly, as we don’t want industry to perceive us as overbearing or as anti-industry.”

The Case For Legislation

The US and Mayawati experiences establish that legislation on affirmative action is a must. Left to its own, industry will soft -peddle the issue; even good intentions might not have the sweeping effect sought. The CII, for instance, has been implementing a voluntary affirmative action plan—proactive measures by industry to level the playing field for dalits—by improving employability through skills and entrepreneurship development programmes. As part of this, Voltas, the Rs 2,450 crore air-conditioning and engineering services major, has been supporting a well-intentioned, but under-performing, initiative in vocational training for underprivileged dalit youth at the Joseph Cardijn Technical School in Mumbai.

Among them is Kamrej Kumar of Sitamarhi in Bihar. “I was snared in the vicious drug-peddling network of Mumbai and am glad to be out of it,” he says, as he picks up the basics required of an air-conditioning mechanic. Over 180 students have gone through the course over the last few years. The present batch, however, is of five students, an appalling number in a city of 18 million. “We in industry are merely paying lip service,” says Anil J Gole, Vice-President, Human Resources, Voltas, in a surprisingly candid observation. “Affirmative action has to be mandated by legislation, by clear laws. Only then will things move.”

Legislation, however, remains elusive. Irani and his cohorts in the CII have been unable to make much headway in putting together a serious, cohesive, pan-Indian affirmative action campaign. “I wonder why he put his personal reputation on the line by leading a CII group not willing to comprehend the import of the issue or take real, corrective measures,” says D Shyam Babu, a Fellow at the Delhi-based Rajiv Gandhi Institute for Contemporary Studies.

Babu has been involved with industry and government in the affirmative action debate along with Chandra Bhan Prasad, a dalit writer and self-taught anthropologist. The duo dismisses the entire effort as a “charade”. They are not even enthused by the Congress (I) promising, in its election manifesto, an Equal Opportunities Commission and reservations even for the economically weak upper castes in the private sector. “This only complicates matters further,” laments Prasad. “It only means nothing will be done for anyone.”

Left to its own, industry will soft -peddle the issue; even good intentions might not have the desired effect. Legislations are a must
The other big industry lobby group, the Federation of Indian Chamber of Commerce and Industry (Ficci), fares no better. Ficci even had the gall to present the government with a long quid pro quo list of tax concessions, duty exemptions and investment subsidies for putting up plants and addressing deprivation in predominantly dalit and tribal districts. While Irani affirms that the CII promise on affirmative action was “unconditional”, the general perception is that Indian industry has failed to rise to the occasion and that the government willingly played along for inexplicable reasons. “I cannot expect uniformity of approach by industry,” says Irani.

Caste Conundrums

What the Tatas are now doing is in line with global trends. The NR Madhava Menon expert group, which examined the need for an Equal Opportunities Commission, tracked trends in several democracies. Its report, submitted last year, states: “If one really wishes to work towards equality of opportunity, non-recognition of social identities is simply not an option.” This flies in the face of Indian industry’s stance of being unaware of or being blind to caste, race, religion and other differences in hiring. Their refrain has been: merit is the only criterion. This when scholars worldwide have examined the meritocracy argument to subsequently claim that merit in an objective sense doesn’t really exist and that it’s merely a social construct.

It’s a paradox: the goal of a casteless society can perhaps be achieved only by highlighting caste and other differences during the journey. “Denying the presence of caste shields status quo. It’s only with the recognition of the caste reality can Indian corporates go beyond tokenism,” says Surinder S Jodhka, Director of the Delhi-based Indian Institute of Dalit Studies (IIDS).
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Farhad Forbes of the Forbes Marshall Group agrees. “If industry has to make a difference, it’s essential to pin down caste, and then track and measure corporate performance along caste-based lines,” he insists. He has made a beginning in his group by integrating the caste factor into a number of corporate functions, including that of vendor development (See page 28).

Others are not so sure. PepsiCo, a diversity leader in the US, in fact, takes an extreme position in India, despite its phenomenal work with black Americans and minorities. “Even if the government mandates caste surveys, we will oppose it by seeking legal options,” says Pavan Bhatia, Executive Director, Human Resources, PepsiCo India.

Supplier Diversity

“Positive discrimination is on a higher plane than affirmative action to help the downtrodden
—Jamshed J Irani, Director, Tata Sons

The IIDS, in 2007, conducted a series of studies in India along with the Princeton University that confirmed that dalits and other minorities are discriminated against in the Indian jobs market; it’s endemic, irrespective of what captains of Indian industry might claim. Farhad Forbes seconds this. “Personal prejudices inevitably manifest as discrimination. Without a doubt, discrimination is prevalent in the private sector,” adds Forbes, who is particularly bothered about the muslim community.

“Even if the government mandates caste surveys, we will oppose it by seeking legal options
—Pavan Bhatia, Executive Director, HR, PepsiCo India

Discrimination manifests itself in many ways besides in the realm of hiring and jobs. “Why is it that a majority of vendors, distributors and dealers of Bajaj Auto belong to a particular community?” asks Milind Kamble of the Dalit India Chamber of Commerce and Industries, a rag-tag support group of dalit entrepreneurs in Pune.

It is in this context that ‘supplier diversity’, an unfamiliar term in Indian corporate lingo, acquires meaning. Large corporations committed to supplier diversity seek and support businesses owned by the disadvantaged: dalits, minorities, women. “If such empowering concepts and tools take root in India, it will indeed be a boon for companies like mine,” says Kalpana Saroj, Chairperson, Kamani Tubes. Saroj, a dalit businesswoman who grew up in Mumbai’s slums, recently acquired the sick company and is trying to resurrect it back to life (See page 38).

“Affirmative action has to be mandated by legislation, by clear laws. Only then will things move
—Anil J Gole, Vice-President, HR, Voltas

Supplier diversity is an area where companies can make a huge difference. About 3,500 corporate members of the National Minority Supplier Development Council (NMSDC) in the US did transactions worth $104.7 billion with Asian, black, hispanic and native American businesses in 2007. Johnson Controls alone did $1.3 billion of business with 276 minority-owned companies, which supported about 11,000 jobs and paid $251 million in salaries. Th irteen US corporations that have come together as the Billion Dollar Roundtable (BDR), including General Motors, Ford, Verizon and Wal-Mart, source products and services in excess of $1 billion annually from minority and disadvantaged suppliers.

The US government too pitches in. In surface transportation, rules stipulate that 10% of federal money should go to minority and women contractors. In the space programme, the figure is 8%. There are several rules favouring contracts to Asian-Americans, Tongans, even Hasidic Jewish Americans! In India, the Madhya Pradesh government, under Digvijay Singh, had put in place a similar piece of legislation, but a regime change rendered it useless.

Caste As An Advantage

In India, still, only a small, but growing, section of industry is seeing merit in diversity. Concepts in diversity and related terms —like affirmative action, positive discrimination, equal opportunity and supplier diversity—are creeping into boardrooms in India, primarily due to the activism of a few MNCs exposed to these concepts in the US and elsewhere. However, this clutch of MNCs in India—PepsiCo, P&G and IBM, for instance—have skirted the dalit and caste issue, and have put diversity frameworks in place with a focus only on gender or the differently- abled.

The Dalit Solidarity Network (DSN) in the UK has been trying to amend the situation. Meera Verma, Director of DSN, is lobbying with MNCs to include caste in their diversity frameworks by getting them to sign on the ‘Ambedkar principles’, a set of guidelines the network has formulated. Verma believes an MNC cannot have an effective global statement on diversity that “fights shy of being country- or culture-specific within particular contexts” and that “any diversity initiative in India has to focus primarily on caste”. There is no escaping caste in India as PepsiCo India is trying to do.

A subtle change of heart can be spied among some MNCs. HSBC recently signed on the Ambedkar principles and is beginning to comprehend the caste complexities in India. The bank has added ‘caste’ as a non-discriminatory factor in its employment policy.
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As the affirmative action and diversity debate gains maturity, there is a need to better understand the numerous terminologies. There is a tendency to use affirmative action and diversity interchangeably. There are subtle differences. In an affirmative action approach, the emphasis is on levelling the playing field, and employers are expected to make an effort to hire, train and promote employees of previously excluded groups. It is numbers-oriented.

Diversity management goes further, and focuses on changing mindsets, organisation culture. It’s strategy-driven and is seen as contributing to the organisational goals of profit, productivity and morale. Diversity management builds on affirmative action.

Indian companies are slowly recognising the virtues of diversity as the business case comes out of the shadows. “When there is no diversity, it constrains thinking. Differing viewpoints enrich the workplace. It doesn’t diminish. It enhances the competitive advantage of a company,” explains Forbes.

Worldwide experiences with African-Americans, hispanics and other minorities, even with dalits in India, have recorded the fact that the disadvantaged work harder. “Tapping from these communities also improves efficiencies. Attrition is very low,” says Irani.

“There is a huge amount of idealism among dalits. Non-dalits lack this idealism, and hence, oft en under-perform,” explains Chandra Bhan Prasad. “It is this great sociological phenomenon that American companies harness. US corporations seek black talent and get it in plenty. Three decades ago, black talent seemed absent, since no one sought it.” The dalit situation in India is similar and it can be harnessed in a similar transformational way. Corporate India has to take the lead.

What’s In A Name?

For dalits looking to break into business, evidently, a lot

Mukund Kamble and Mukund Kamalakar. They are similar sounding names, but vastly different in the social identities they betray and the responses they evoke. And in a city like Pune—progressive and egalitarian on the surface, yet conservative beneath—names can mean a lot.

It can mean battling overt and covert discrimination, or easy acceptance and assimilation. Kamalakar, from a scheduled caste (SC), realised this early on, while in college—he changed his surname from the castegiveaway ‘Kamble’ to the brahmanical ‘Kamalakar’. “The attitudinal change in the people and groups I interacted with then on was remarkable. Access into the competitive world was so much easier,” says Kamalakar, who now owns a flourishing solar equipment manufacturing unit, Suryatech Solar Systems.

He flaunts the usual trappings of a successful entrepreneur, including a swanky sedan, and is certain that he couldn’t have established himself in business with a surname like Kamble, especially in the initial years. “What is critical for dalits is the initial break-in, the access,” he says. “Once you prove your worth in whatever you attempt, you are accepted.” Some of his business associates have stumbled upon his dalit moorings, but now they don’t really mind.

Kamalakar’s turnover, today, exceeds Rs 1 crore. He has a customer base of over 4,000, a majority from the upper castes, for they are the ones who comprehend the benefits of renewable energy and also have the money to invest. The Erandawane-Kothrud stretch of the city, teeming with upwardly mobile upper castes, is where he cut his teeth in business.

He, however, concedes he is an exception and that not all dalit entrepreneurs can adopt his ways; and, therefore, the need for an enabling and facilitating environment for dalits to turn entrepreneurs. He rues the fact that as a first-generation dalit entrepreneur, he has no network he can tap into, unlike the marwaris or other traditional business communities.

“I couldn’t secure a bank loan of a mere Rs 1 lakh to set up an inverter manufacturing unit, even after trying for years,” recalls Avinash Gawai of Media4U, a consultancy. He had to abandon his ken for manufacturing and veer towards the services sector.

Both Kamalakar and Gawai are members of the fledgling Dalit India Chamber of Commerce and Industries (DICCI) in Pune, a 100-member support group for dalit businessmen and entrepreneurs, that wants to, among other things, press for a state where such namedropping is not called for.

A Measure Of Diversity

A new index quantifies a company’s diversity—and links incentives to it

The caste-profiling exercise undertaken by the Tatas and a few others is timely as the Union Ministry of Minority Affairs has crafted a ‘diversity index’, which companies and institutions may have to deploy to measure their diversity performance. That is, if a political consensus emerges on its utility.

The idea of the index is to link it up with a bevy of tax concessions, funds and other subsidies the government often doles out to industry. The quantum of incentives for a particular company may be decided on the basis of its score on the index. A value of ‘1’ on the band is an organisation with high diversity and ‘0’ is low. Underperformers are to be penalised.

A diversity index is basically a rating of an organisation at the micro or national level based on its employment profile. The index, developed by an expert group appointed by the ministry, limits itself to religion, caste and gender. “We didn’t want to burden the index with too many responsibilities,” says Amitabh Kundu, Chairman of the expert group and professor at the Jawaharlal Nehru University, on why the differently- abled, for instance, were left out from its purview.

A key proposition of the mechanism is the “eligible population”. For instance, a company’s record on supporting muslims will be measured on the basis of the muslim population eligible for a post in the region it operates in. Similarly, a diversity score for a large group like the Tatas can be determined on a national basis.
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Again, the index lays emphasis on “vertical integration”, which means a company cannot merely focus on bluecollar workers, for instance, and claim it’s a diversity champion, while the higher categories remain untouched. “An index-driven system is more flexible and acceptable than a rigid reservation or quota-based system,” says Kundu, even as he insists that reservations may continue for a while in the public sector and other spaces. “Quotas and an index mechanism can co-exist.”



One Response to “Bite the Caste Bullet”

  1. 1 BK

    you shuould ahve given credit to original author(Naren Karunakaran
    ) before!!!

    http://business.outlookindia.com/inner.aspx?articleid=2672&editionid=73&catgid=1&subcatgid=386
    This is printed from Outlook Business magazine


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