Seminar by Dr. Ritika Jain and Dr.Vinoj Abraham
A seminar titled ‘Job Reservations, Disinvestment and Firm Performance among Indian Public Sector Enterprises,’ was delivered by Dr Ritika Jain (CDS) and Dr Vinoj Abraham (CDS) at the Joan Robinson Hall, CDS on 16 November, 2018.
The current study analyses select issues related to job reservation, disinvestment and firm performance. Specifically, the study attempts to focus on two aspects- the effect of disinvestment on job reservation and the effect of job reservation and disinvestment on firm performance. The study relies on data for all central government-owned enterprises from 2013-2016 in India and employs instrument variable estimation strategies to analyse the effect. The study finds that while disinvestment has limited impact on job reservation measures in India, firm performance is positively influenced by diversity and negatively affected by mere proportions of reserved category employees. This has implications on the relevance of existing reservation policies in Indian CPSEs. On one hand, it emphasizes on the serious limitation of drastic reductions in the reservation requirements with advancement of grades. With reservation levels almost reducing by half from grade D to grade A level, the skewness in share of reserved categories piles in the bottom levels. This leads to a skewed representation of all social groups and thus hampering firm performance. Further, blind implementation of the required reserved ratios also leads to detrimental effects on performance. In contrast, firms which have a diverse workforce at every level of the workforce segments leads to a better working environment, larger information flow and harmonious performance. Finally, the results also reiterate the influence of various disinvestment characteristics on firm performance with strong emphasis on the difference between dilution of ownership and transfer of control.