Caste: Why it’s still an issue for India Inc.

“My birth is my fatal accident.” This line from the January 2016 suicide note of Rohith Vemula, University of Hyderabad student became a rallying cry for Dalits and supporters across the country.

At the same time, there were some who brought up the Rajeev Goswami case as a counter. Some 25 years before Vemula hanged himself, Goswami, a student at Delhi’s Deshbandhu College, set fire to himself protesting against the government’s move through the Mandal Commission to impose caste-based reservations in educational institutions. It’s not just Dalits who suffer, was the message being sent out by non-Dalits opposing reservations.

That caste is a huge (and polarising) issue is a truism today. “To be a Dalit is to wear an invisible stigma that dogs one’s daily interactions,” wrote politician and former diplomat Shashi Tharoor soon after Vemula’s suicide. And despite 80-odd years of caste-based reservations, Dalits today are still largely invisible in corporate India. Dalits make up close to 25% of the population, but control roughly 5% of assets.

An informal study done in this office shows that of the top 100 companies in the Fortune India 500, there are maybe (emphasis on the maybe) four non-“upper” caste people running the show. Remember that the Fortune India 500 is not restricted to private companies, so our admittedly far-from-scientific study shows that even government and public sector companies are not headed by Dalits.

My first thought when I saw the non-representation of Dalits in corporate India’s top echelons was that this conclusively proved the failure of the reservation/ quota system. For decades, free-market advocates have been raging against the caste-based reservation system, saying it is against all laws of demand and supply. Has India Inc. proved them right? I began hunting for academics and companies who could validate or disprove this. And very soon realised that our dipstick survey reflected only a part of the problem. Dalits, I realised, are not seen in most corner offices because they are not seen in most private companies. The level playing field that characterises free markets is not so level for Dalits.

The big reason for this under-representation is that the education system is biased against Dalits. “Evidence of caste-based discrimination in institutions of higher learning is quite rampant and shows the depth of anti-Dalit sentiment in education,” says Surinder Singh Jodhka, professor of social sciences, Jawaharlal Nehru University.

Once admitted, particularly in the non-metros, Dalit students face social ostracism, physical abuse, and are often denied access to basics that are available to other students such as drinking water or the use of toilets. Dalit students are also often made to do menial work in school, something that makes it to the newspapers with depressing regularity even today. Given this, there’s a high dropout rate.

Ashwini Deshpande, professor at Delhi School of Economics, who specialises in caste, gender, and economic discrimination, has spoken to more than 100 Dalit college students as part of her research work. Among those she studied were first-time job applicants; many of the Dalits who participated in her study said that they knew, even before the job interviews began, that they would not be selected because they could not speak English fluently, were not dressed in the right kind of clothes, and lacked the body language of the high-caste Hindus. Self-fulfilling prophecy: They did not get the jobs.

“Restricted access to education means that there is less opportunity for individuals from backward castes to develop the skills needed in many private sector jobs. In addition, interviews are used as the main selection method, which requires the candidate to have excellent communication skills and a good level of confidence. I feel that this type of selection method advantages those with higher education levels,” says Martha Desmond, chief human resources officer, Apollo Tyres.

Most recruiters start with the preconceived notion that a Dalit is from a poor family and lacks the soft skills of higher-caste, better-educated candidates, says D. Shyam Babu, senior fellow at think-tank Centre for Policy Research. “The very nature of hiring practices forces us to conclude that the system is not transparent and excludes a certain section of the people who are not networked,” says Babu.

It’s a thorny issue, made worse because of the politics of caste reservations. Before that, here’s a quick caste primer that will help set the context for this issue. In the Hindu universe, there are four principal castes, and one category that falls outside these castes. That last category has been historically considered “untouchable”, and its members did the jobs nobody else would—scavenging, disposal of waste, and so on. Mahatma Gandhi tried to dignify their status by calling them Harijan, or children of god. Social activists, including B.R. Ambedkar, considered this condescending, and preferred the word Dalit, which means oppressed or broken.

Reservations for Dalits was a part of the Poona Pact signed in 1932 by Hindu leaders to dilute the provisions of the British communal award, which gave electoral representation based on caste and community. Gandhi went on a fast unto death protesting the communal award, which Ambedkar had welcomed as a means of getting Dalits visibility in the political space. The Poona Pact was a compromise solution, that gave “Harijans” reservations for 10 years instead of electoral reservation.

Apart from relaxing admission norms, the government has mandated that Dalit students be ranked on more relaxed parameters; this was to boost the confidence of Dalit students, who were almost always first-generation learners. This continues to government (and public sector) jobs, where a little over 20% of jobs are reserved for Dalit applicants, and entry and promotion norms are relaxed.

Reservations continued long after the Poona Pact, as political parties found that if they were to win seats, they needed to woo specific communities in their constituencies, which often meant Dalits and non-Hindus. And they could do that by offering easy access to education and jobs. (In fact, things have got a bit farcical, with wealthy and influential communities such as the Patels, Patidars, Kapus, and Jats, demanding reservations in government jobs.)

According to Ahmedabad-based Navsarjan, a grassroots Dalit organisation, close to half the Dalit population lives below the poverty line, and over 60% is illiterate. Reservations for this section makes perfect sense; where things fall apart is when this segment continues to be marginalised, and the benefits are snatched away by the more economically privileged. Amir Ullah Khan, policy advisor to the Bill and Melinda Gates Foundation, says “nothing, really, has changed for the Dalits in the past 60 years, other than jobs in the public sector”. He adds that there’s a growing feeling among a section of Dalits that the privileged class is trying to eat into reservations, one of the few advantages given to the backward class.

It’s a bit of a conundrum. No reservations in jobs will mean no discrimination in the workplace, but no reservations will also deny jobs to several who need it because the education system does not allow them to get in on merit. It’s free market principles coming up against socialism. Which is all very well as a debate topic, but what about the real world? There’s a huge section of the population that’s struggling with poor education and no jobs, even as the government claims it’s doing all it can.

Reservations don’t seem like a great idea in the public sector either. Chandra Bhan Prasad, advisor to the Dalit Indian Chamber of Commerce and Industry (DICCI), says job reservations in public sector companies often do more harm than good. “While reservations may have given more jobs [to Dalits], it has not removed the stigma related to caste, and may have actually sharpened the differences,” he says. Because there are no reservations in the private sector, a Dalit applicant will have got in on merit; in the public sector, this may not necessarily be the case. And because there will be those who got in on the quota working alongside those who got in on merit, there’s ill feeling towards those who got in on reservation.

Given that, does it make sense to dilute the principles of a free market, and demand that the private sector reserve jobs for Dalits? Political parties definitely think so, with the Communist Party and the BJP-led government talking the same language on this. Companies, however, oppose this move. “Caste-related filters do not apply for any scenario,” says Shikha Taneja, senior director, human resources, at Delhi-based e-retailer Shopclues. Desmond says more or less the same thing: “Caste of a candidate does not figure in our recruitment forms, neither is it raised during the hiring process.”

A look at the job application forms of a dozen or so companies across sectors (including Wipro, Accenture, Organic India, and Muthoot) shows that only one company (Muthoot) asked if the candidate belonged to a scheduled caste or tribe. (We were unable to reach Muthoot to learn the reason for this.)

If we are to go by what companies say, caste plays no role in hiring. The HR managers at most large companies I spoke to say that all hiring is on merit, so there’s no room for caste divisions. “There is no issue of caste in our organisation,” says Deepak Kapoor, chairman, PricewaterhouseCoopers in India. “It is all about talent, academic qualifications, and years of experience.”

Kapoor could be speaking for much of India Inc. “Since we don’t have any caste preference, all candidates are treated equal and given a fair chance in the hiring process.” That’s Philip Joshua Assey, head of HR, at online pharma retailer Netmeds. And then, there’s Farhad Forbes, co-chairman of Forbes Marshall and chairman of the Confederation of Indian Industry’s (CII’s) National Committee on Affirmative Action, who says: “The point really is to have the right person for the right job, irrespective of his caste or other consideration.”

Shripal Gandhi, founder and CEO, Swipe Technologies, which makes smartphones, wearables, and apps, says that the recruitment process at his company emphasises on merit and not on ethnicity or caste. “While we respect the government’s view on backward castes, we do not have any reservations for recruiting people,” he says.

There’s plenty more of the same. “Merit and willingness to learn are the only criteria for selection,” says R. Anandakrishnan, senior vice president–HR, TVS Motor, which employs some 12,000 people (including temporary labour). The way HR managers talk, you’d think caste was a long-forgotten problem. But here’s the problem. We don’t know really if they are right. Companies say there’s no data on Dalit recruitments.

An attempt to ask companies to declare caste-based hiring in 2007 by the CII was a failure. A survey was sent to all CII members; 95% did not respond, and of those who did, it was found that Dalits were employed at only lower levels and as unskilled labour; there was not a single Dalit in a management position.

A more recent study by Jodhka of 50,000 companies across the country shows that 94% of the top jobs went to the upper castes—Brahmins or Baniyas. “The deep belief that the private sector only employs people on the basis of merit should be taken with a huge pinch of salt,” says Jodhka. But HR managers still insist there’s no bias in the hiring process.

There’s pushback from Dalit applicants, who are equally sure that they are discriminated against by recruiters because they don’t have the right soft skills or contacts. That’s borne out by K. Ramkumar, till recently executive director in charge of the operations group of ICICI Bank, and president of the ICICI Foundation for Inclusive Growth, who says: “The selection system at most corporates is based on the quality of signalling during interviews—how well they speak English, etc.” He adds that the problem is with the educational system, which does not ready Dalit students for a world outside their community. “Most of these kids come from rural backgrounds and understand English but aren’t fluent in it. And often, that acts as a mental block for them.”

The good news is that not all companies are waiting for the government to take steps to level the field for Dalit employees. “At the entry level, it is important that corporates invest to fill in the gap left by the education system,” says Ramkumar. That’s the reasoning behind setting up the ICICI Manipal Probationary Officer Programme for underprivileged students, who are generally Dalits. The programme functions like a finishing school, which prepares students with the necessary soft skills, including a good knowledge of spoken English, so they join the bank far more confident of assimilating with others from more privileged backgrounds. Ramkumar adds that at the Leadership Centre, which he founded and now runs, the plan is to “invest in [Dalit] students who want to develop their leadership abilities”.

Yugesh Goutam, president, global HR, at pharma company Lupin, tells me about his company’s efforts to encourage the disadvantaged at the entry level. “We target to get on board learners who are bright but from financially backward sections. This is a three-year integrated programme in which we not only provide on-the-job training but also take care of their educational aspirations and guarantee them jobs on the successful completion of the programme.”

Of all the companies I spoke to regarding this issue, none had such a well articulated strategy in place as the Tata group. N.S. Rajan, group chief human resources officer and member of the Group Executive Council of Tata Sons, and chairman of the group’s diversity council, explains that the group has a diversity programme as well as an affirmative action programme in place. He talks about the group’s efforts at positive discrimination, adding that it’s difficult to implement because most employees prefer to remove their caste names, and if asked to specify caste in any official form, generally choose “other”. (Positive discrimination, Rajan explains, is when there are two candidates with similar qualifications and the company hires the one from a minority or disadvantaged section.)

Later, the former head of a large recruitment company spoke about a college classmate, who used to introduce himself proudly as a Dalit. He would invariably follow that up by announcing that he had got admission on merit and not reservation. That student, however, seems to have been an exception. The rule seems to be that Dalits prefer to hide caste identity, often with good reason. Many of us have heard managers speak dismissively of “quota candidates”, sometimes in front of those employees. Such contemptuous attitudes seep into the workplace, and Dalit employees are often ostracised. “There is an element of stigma involved,” says Rajan, explaining the removal of caste markers.

In 2009, Sukhdeo Thorat, professor of economics at Jawaharlal Nehru University, and Paul Attewell, professor of sociology at the University of New York, conducted a small experiment on caste-based hiring that could explain the removal of caste markers by some candidates. The two professors submitted three false applications for every private sector job that called for a university degree but no specific skills. The applicants, all male, had similar educational qualifications and experiences, but one had a recognisable upper caste Hindu name, another a Muslim name, and the third a distinctly Dalit name. The expected outcome was a call for an interview for further screening. The result: For every 10 upper caste Hindu applicants who received an interview call, six Dalits and three Muslims were chosen. Deshpande, who was a part of the study, points out that even in private enterprises (including information technology), applicants with a typical Muslim or Dalit name had a far lower chance of success than those with the same qualifications and an upper caste Hindu name.

Back at the Tata group, Rajan says the removal of caste names need not necessarily be only out of fear of social stigma. “There could be a message: Judge me for who I am, not by where I come from,” he says.

One of the things the Tata affirmative action programme (and Rajan repeatedly explains that this is not the same as reservation) stresses on is encouraging group companies to source from vendors from marginalised communities. More than 100 members of DICCI are registered vendors of 10 Tata companies. One such vendor is N.K. Chandan, head of the DICCI Delhi and NCR chapter, and owner of Chandan & Chandan. “In my factory, I make industrial safety helmets for the Tata group, meter boxes and distribution boxes for Tata Power Delhi Distribution, and safety reflector triangles for cars for Tata Motors. The Tata group has helped us grow with different products,” says Chandan. “If the Tatas had not given me the opportunity, I would have still been a trader.”

The trouble is that most corporates consider caste as a problem that the government should look at and resolve. A few, like Lupin and Tata, do try and fix their hiring strategies to be more inclusive. However, what nobody talks about is the elephant in the room: harassment or ostracism by colleagues. Consider what a Dalit employee in a PSU told me when I asked about caste in the workplace. “An employee [colleagues] would have no aversion to employing an untouchable, provided the work is an ‘untouchable’s job’.”

There’s also a very definite feeling among non-Dalit colleagues that merit is victim to quota. When they believe that a Dalit is in the workplace because the government has “thrust” him there and not because of his merit, they go out of their way to see that the Dalit fails to meet targets. Jodhka explains: “Merit is constructed as a privilege of the upper caste. The belief is that even students who had got into IITs were actually a product of the quota system. That feeling extends to campus hiring.”

The view from the top is somewhat different, because the bosses believe that such bias is the exception, not the rule. “[They] tend to work harder than others because they want to prove themselves, that the tag of being inefficient is misplaced,” says Partha Sarathi Bhattacharyya, former chairman, Coal India. “They make a conscious effort to be better than the others. They are somewhat akin to Indians who go abroad and work extra hard to prove themselves better than the local population,” he adds.

A spokesperson from IndianOil, No. 1 on the Fortune India 500, says that while the PSU has to recruit from “reserved categories”, this is “after tough competition, and IndianOil generally attracts the best. There is no compromise on the quality of human resources.”

The former head of a recruitment company says that an interesting issue has emerged in those workplaces that strive to be equitable—caste is not so much an issue as class. An ambitious employee wants to move up, get a better car, a house, and other material trappings. So, caste markers will slowly become less relevant.

Although the indian workplace has become modernised and way more inclusive of other ethnicities thanks to globalisation, hiring practices overall seem to lag. There are laws mandating and protecting gender diversity, which means theoretically at least, women are not discriminated against in recruitment and promotion. The laws relating to caste are, if possible, more stringent. But because the issue is so politicised, nobody wants to talk caste. Even in newer businesses, such as information technology and e-commerce, it is the upper castes that have got a disproportionate benefit, says Deshpande. Milind Kamble, founder of DICCI, explains why there’s low Dalit participation in the startup space. Quite simply, it’s lack of access to capital, and fewer networking opportunities.

Deshpande says diversity in general, and caste in particular, will continue to be a sticky issue, and will only become worse in the coming years unless they are decisively handled now.

Clearly, reservation in private sector jobs isn’t the answer. Rather than using a stick, Amitabh Kundu, visiting professor, Institute for Human Development, suggests that the government try a carrot. He says the way forward on caste-related issues could be to incentivise private companies that promote diversity. “We found that 85% of private companies are dependent on the public sector for something or the other. Land at concessional rates, export subsidies, contract from public companies, tax benefits, etc.” So, all that’s needed, he explains, is to make it clear to the private companies that if they violate a specified Diversity Index, these incentives will be reduced.

If incentives don’t have the necessary effect, perhaps companies will consider what they lose when they exclude a major chunk of the population: the benefit of a vastly diverse set of people bringing different abilities to solve problems, which benefits the bottom line.

Additional reporting by Mansi Kapur