Skip to main content

Reservation, politics and the great opportunity ahead

India is having a raging debate about reservations in education institutions. The government has proposed a 27% quota for OBC (Other Backward Classes) in all educational institutions including the haloed IITs , IIMs and AIIMS and all other engineering and medical colleges. This has caused a great deal of tension, anger and resentment amongst the “urban” upper castes with a lot of engineering and medical students resorting to hunger strikes outside their colleges.

Let us take a dispassionate look at the issue at hand. There are 3 main reason why the quotas have come in.

Reason #1: Arjun Singh, a former Congress heavyweight leader gets shunted to the HR ministry in the new UPA led government. He needs to assert his importance to the country butmore importantly to the Congress top-brass. He really needs to emphasize the fact that he is still relevant in Indian politics.

Reason #2: Reservation creates a vote bank for the minister and his party. Or for those who can shout the loudest about having created the quota. Although differing by a wide margin, various surveys show that OBCs are atleast 30% of the Indian population. If anyone party can corner that kind of votes, it will difficult to beat them in the general elections. And, India is a haven of caste based politics. From the cow-belt to the southern states, caste plays a big part in the electoral process.

Reason #3: It’s the easiest thing to do. Pass a regulation and it’s done. It does not need any tough decision-making or implementation of any difficult things like creating more and better schools and colleges.

The main reason why reservations are important or is being done as justified by the HRD minister and others of his ilk, that its to uplift the downtrodden is something that is just meant for public consumption. I am confident that Arjun Singh does not lose any of his precious sleep over the living conditions of the OBCs.

It is not possible for any political party in India today to take a stand against the quota and alienate the OBCs. So, this bill is getting hardly any resistance and from the opposition parties. The only resistance is coming from the students of the so-called upper castes. And also, its more of an urban phenomenon. There is a lot of media coverage of this, but as we have seen with the last Lok Sabh poll, the media can be grossly wrong in predicting trends for the simple reason that its manned mostly by urban middle and upper middle class people. The media coverage and the protesting students are unlikely to have much success because no party can actually backtrack from the stand that they have taken.

The question remains whether reservations is the correct approach for eliminating the inequality that has taken place over hundreds of years. I, for one believe, that some form of social upliftment is needed for the SC,ST and OBCs. Whether reservation is the correct thing to do, I don’t know. But the fact is that there is active discrimination against this section of society even today. The only way to get these people to join the mainstream is to get them educated. For people who have centuries of neglect to cope with getting good grades in school may not come easy. Getting decent jobs is practically impossible. For a nation of a billion people, it is not good enough to leave 30% of its people in abject poverty, ready for their exploitation.

Maybe an option is to get all underprivileged children to school and then into vocational training. The focus has to be to improve their employability, whether it is in the rural agriculture or urban industry. Only with economic liberalisation will people be able to come up in life. This requires a great deal of focus on building a great deal of educational infrastructure all over the country. I have a problem when the IITs, IIMs and the AIIMSs of this world not willing to increase their capacities. I refuse to believe that there are only 1500 great students every year who are capable enough to be part of an IIT or an IIM. Worldwide their application rejection ratio is the highest. It is just a manifestation of a “closed-circle” mentality, where people don’t want others to intrude.

If you look at the heart of the issue it is because we have a scarcity of good educational institutions that we are seeing such a great deal of hullabaloo. If we had enough good schools and colleges to be able to absorb all students then there would not have been any issue at all. So, the answer is to build huge capacities in the education sector and also to look for innovative ways to expand the reach of education. And herein is the opportunity. Entrepreneurs can start investing in this sector and start building schools, colleges and vocational institutions. There is a huge market for this and people will be willing to pay top dollar for good education. Who would have believed that peple would be paying 15 lakhs for a year’s MBA course in India. That’s what ISB, Hyderabad is charging, and they are attracting students by the dozen. So, I would not be surprised to see a chain of “Reliance Schools” or “Tata Colleges” come up in the country. Cheers to that!!

Comments

Popular posts from this blog

Indian Markets - Crystal ball gazing

Here is what I came yup with by crystal-ball gazing (the crystal ball is now pretty cloudy and filled with dust, but what-the-heck...it sure is some fun to look at it once in a while... Sensex/Nifty will make a dash for the all-time high sometime soon (maybe as early as October end) Either breach it or turn back just short of it. A bout of profit booking follows. Indices go down 10%-15% (back to around 18K-18.5K) Main indices remain sideways for the next couple of quarters. Mid caps move up from now as the last few weeks the valuation gap has widened. Sometime after 2-3 quarters, the next up move starts for the main indices. By that time, PE is down to about 22 (which is still high but certainly not hitting the roof). One point to consider is that the 2008 debacle is still fresh in the minds of most people, and as long as it remains, the sentiment of fear will be there. That will prevent the markets from having a runaway rally or a breakneck fall. I sure hope I am right!!!

Final days in Chengdu

We made our presentation to the Big Shoe Company. I thought it went pretty well. I presented strategy for online marketing to them. That is what I thought what they wanted to know the most. But selling shoes online is going to be fairly tough for an unknown brand. Once we were done with the presentation, we were back to the hotel and started working on our consolidated SME report. By Wednesday we had completed the SME report and also the final presentation that we were planning to give Madam Bao Hui, a member of Chengdu Municipal CPC committee, and Chairman of General Labour Union. Loren did not want to present because he had one more presentation that day, so we egged on Vandana  to do the job. The final meeting with the chamber of commerce was in a swanky 5-star hotel. There was local media coverage as well. The President of the Chengdu Chamber of Commerce was there to greet us. We had four presentations on general themes which was concluded by the final SME report. Madam Bao then

Supreme Industries - Interesting Play on plastics and Real-Estate

Notes from Annual Report 2010 * The company expects to achieve 20%+ volume growth per year in medium term * No significant change in product wise share of revenue * Crisil has upgraded the rating outlook from A+Stable to A+Positive * 1, 3 and 5 year sales growths are: 20%, 17.76% and 18.45% respectively * 1, 3 and 5 year PAT growths are: 48.6%, 42.39% and 43.66% respectively * Last 3 years average RoCE is 33% * Last 3 years average RoE is 34% * Long term Debt-Equity ratio has reduced from 1.02 to .49. This should reduce even more with the increased sale of the commercial building space. PLASTIC PIPING SYSTEMS * India's capacity for PVC resin is 67% of demand. Rest is imported. * Kanpur plant's capacity to be expanded from 8000 tons p.a to 15000 tons p.a. Plant is to be commissioned by Dec'10 * Newly launched Lifeline CPVC grew more than 120% * "Aqua Gold" plumbing system for cold water has grown by over 50%. It is successfully replacing GI pipes. * Expects the ren