The Hindu Business Line : Sops for jobs

As the contentious issue of job reservations in private industry waxes and wanes in the public eye with trade and industry associations ranged in varying degrees against the government that favours such a move, some sections of officialdom at least appear to be cutting a way out of the thicket. Though hoist by its own petard, the Government is looking for an economic compromise mercifully, instead of ramming the job quotas for Scheduled Castes and Scheduled Tribes and Other Backward Castes down industry's throat. Apparently what it has in mind is a package of sweeteners that eventually leaves the initiative for reservations where it ought to rest — with industry itself.

That is how one can interpret the few statements that came out of the Hannover Fair recently. The Commerce Ministry is working on fiscal incentives to get industry interested in employing larger numbers of Scheduled Castes and Scheduled Tribes. There is also the possibility of it including other economic incentives to get industry to set up base in areas with a predominantly ST/SC and backward caste population. Obviously, many of these will be backward areas in every sense of the word and tax holidays to lure industrial activity with low-skill employment potential would be the best way of ensuring incomes for the poverty-stricken and as a measure of social justice. While pursuing this conceptual plan is an eminently more productive option than imposing quotas for the socially deprived, it may be worth the policymaker's while to cast a glance at the sops offered to Special Economic Zones. If the idea is to quick-start employment for the SC/STs then it may be necessary to offer incentives similar to those in the SEZs. Thus, a promise to introduce efficient communications, good infrastructure and simplified procedures would certainly attract industries to backward regions given the low cost of labour and despite its low efficiencies.

Policymakers should understand that in an age of competition incentives are the best bet to get industry adopt social causes. If legislation is not the ideal way of ensuring the jobs for the backward sections, then the best way is to motivate industry to create jobs for them; American cities reactivated inner-city ghettoes by offering sops for companies and employment generating units to relocate. Hitherto-backward countries such as Bangladesh have become readymade garment hubs through a mix of fiscal incentives, low labour costs and an energetic bureaucracy. If affirmative action works at all, it works best by maximising the returns for its participants. The package of incentives that the Commerce Ministry is working on may hark back to the old industrial location policy that succeeded only partially in bringing industries to the backward areas. But it is still a better bet than job quotas that may not succeed at all.

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