Privatisation and Affirmative Action

In one line

Reservation binds the State, privatisation moves the employer out of the State, and the Constitution has no answer to what happens to the programme in between.

In the wording a student can write in an exam: articles 15(4), 15(5), 16(4), 16(4A) and 16(6) are enabling provisions addressed to the State, and article 16 is in terms confined to employment or appointment to any office under the State. The obligations of Part III attach to a body only if it falls within article 12, and since Pradeep Kumar Biswas v. Indian Institute of Chemical Biology the test is whether, on the cumulative facts, the body is financially, functionally and administratively dominated by or under the control of the Government, that control being particular and pervasive and not merely regulatory. Where the State disinvests an undertaking, contracts a service out, or opens a sector to private providers, the body performing the function ceases to satisfy that test, and with it the reservation obligation, the guarantee of equality of opportunity and the remedy under article 32 all cease to apply, although the function and the power over the citizen are unchanged.

Set the question up properly

Weak answers describe privatisation and then assert that reservation should continue. The question is a legal one and it has a precise shape.

Reservation is not a free-standing policy. It is an exercise of a power conferred on the State by an enabling clause, over a field defined as employment under the State. Take away the State and there is no power to exercise and no field to exercise it on.

Article 16 is not merely about who pays. Its guarantee is equality of opportunity in matters relating to employment or appointment to any office under the State. A privatised undertaking is not an office under the State whoever owns its shares was yesterday.

So the loss is automatic, not deliberate. No government decides to withdraw reservation when it disinvests. The obligation lapses because its precondition has gone.

What exactly is lost

Be concrete. This is where an answer earns marks.

The reservation itself. Articles 16(4), 16(4A) and 16(6) bind the State as employer. A private employer is under no constitutional obligation to reserve, and no statute of general application imposes one.

Equality of opportunity in recruitment. Article 16(1) requires that selection for public employment be open and non-arbitrary. A private employer may recruit as it pleases, subject only to labour and anti-discrimination legislation.

The duty of non-arbitrariness in dealing. On the R.D. Shetty line, every action of the executive must be informed with reason. That duty attaches to the body, not to the function.

The article 32 remedy. A fundamental right in itself, and unavailable against a body outside article 12.