The Rs 300-Billion
06 December, 2004
Dalits - Scheduled Castes and Scheduled Tribes - are the first beneficiaries
of job reservations in Government. This is something we all know. Bizarre
as it may seem, India's private sector is the second largest beneficiary
of reservations to Dalits. Let's examine how.
The reservations have helped about 3.5 million (35 lakh) Dalits to get
Government jobs (Central/State Governments/PSUs etc). This is my estimate,
based on the Fourth Report of the National Commission for SC/STs (1997-98).
Unfortunately, no central agency, including Planning Commission, Union
Ministry of Social Justice and Empowerment, Census Commissioner of India
or National Sample Survey, have any published report showing the number/percentages/position
of Dalits employees/officers at the all India level, including State
About 3.3 million (33 lakh) Dalits have got into trade/commerce/manufacturing
(often small in terms of size and turnover), of which, about half of
this (1.65 million or 16.5 lakh) may have been caused by reservations
(Dalit employees/officers often finance their unemployed children to
set up businesses).
That means, about five million (50 lakh) Dalits have used reservations
to join India's middle/lower middle class rank. In other words, reservations
have produced five million Dalits, or 25 million Dalit persons (assuming
that a household in India comprises five persons) as consumers, who
otherwise, through the natural process of development, may never have
been able to enter the market places. But, how does it help the private
Reservation has given Dalits jobs in cities and towns. Understandably,
they now follow the lifestyle as well as the cultural behaviour of urban
India. Assuming that most urban inhabitants with a secured monthly income
use toothbrushes, it follows that the Dalit employees /officers/ small
business persons too are following the trend. Also assuming that most
users buy at least two toothbrushes each year, then the 25 million (2.5
crore) Dalits must be buying 50 million (5 crore) toothbrushes contributing
Rs 500 million (Rs 50 crore) annually to the Rs 3,000 million toothbrush
industry. Assuming that a Dalit household spends Rs 10 on tooth paste/powder
(Rs 120 a year), then the five million Dalit households are contributing
Rs 600 million annually to the Rs 9,500 million tooth paste/powder industry
According to an estimate, about 61 million households in India use pressure
cookers. One can then assume that Dalit households have an estimated
5 million pressure cookers. And if the price of each pressure cooker
averages Rs 300, then the five million Dalit households would have contributed
about Rs 1,500 million to the pressure cooker industry. If India's middle/lower
middle class households buy at least two pencils a month, then the 5
million Dalit household are buying about 120 million (12 crore) pencils
a year. If a pencil costs Re 1, then Dalits are contributing about Rs.
120 million annually to the pencil industry.
India's FMCG Fast Moving Consumer Goods industry soap/hair oil/shampoos/other
cosmetics is estimated to be worth Rs 6,000 million. If the urban middle/lower
middle classes are the main consumer base, then the 5 million Dalit
households too must be buying these items. If Dalit households buy an
average of two soaps (a bath, and a wash soap each month, then, the
5 million Dalit households must be buying 120 million soaps every year.
If a soap costs an average of Rs 5, then Dalits are contributing about
Rs 600 million annually to the soap industry.
If one assumes Government employees/ officers earn an average Rs 10,000
a month and spend half of that in the market, then the reservation produced
Dalits contribute about Rs 25 billion a month, or Rs 300 billion annually
to India's private sector. An amount that is more than the combined
annual net income of Reliance, the TATAs, the Birlas and the Dalmias.
The Dalits have used reservations, a doctrine scripted by Dr Ambedkar,
to their advantage. Thanks to reservation, there is a Dalit middle class
which is a discerning customer of goods and services. Whatever they
earn from the State, they spend on India's private sector. So, purely
from a business angle, shouldn't the private sector come forward to
confront the Rs 300 billion question an embrace reservations for Dalits!