By Sharat Pradhan
LUCKNOW, India (Reuters) - The head of India's mostpopulous state, the so-called "queen of the untouchables", istentatively extending lower-caste quotas into the privatesector, a move that may have major political and economicrepercussions.
India's lower castes and indigenous tribes already claimabout half of government and public sector jobs, a scheme ofaffirmative action aimed at redressing the imbalance ofHinduism's ancient caste system.
But Mayawati, Uttar Pradesh chief minister and champion ofDalits or "untouchables," is expanding this into any privateprojects undertaken with the state, a booming sector as Indiaspends billions of dollars on infrastructure such as highways.
Most leading businesses have shunned the idea of quotas,worried it will worsen their competitiveness in a globalmarket.
Mayawati's government issued a circular this week to ensuredepartments implemented the quota system and took out full-pageadvertisements in prominent daily newspapers, with the title"New Positive Reservation Initiatives".
"Because of the anti-reservation mentality of the rulingclasses the full benefits of reservation is not reaching thepeople," the advert said.
It is the first prominent policy in India to includeprivate business into the quota system, analysts say, andhighlights the role caste politics will play in 2009 generalelections.
"There is increasingly a competitive race politically overwho is doing what with reservations," said T.K. Bhaumik, chiefeconomist of Reliance Industries Ltd, India's largest businessconglomerate. "There are elections ahead."
Under the scheme, quotas will be introduced inpublic-private partnership enterprises, as well as in privatecompanies doing outsourced state government work.
Firms solely working in the private sector are notincluded.
"This quota system is a very important move because for thefirst time we are seeing it implemented in business rather thanjust talked about," said Mahesh Rangarajan, a politicalanalyst.
Critics say the economy is still split on caste, with topmanagers mostly higher castes while Dalits, about 16 percent ofIndia's 1.1 billion people, are relegated to menial jobs.
Prime Minister Manmohan Singh, in a 2006 speech, called oncompanies to take voluntary action to help lower castes getjobs, a statement at the time widely seen as a warning toIndia's booming business sector to act or face possiblelegislation.
"Now how do we function?" said a leading industrialist inKanpur, Uttar Pradesh's major industrial hub. He asked toremain anonymous because of fears his statement could haverepercussions on his business in Uttar Pradesh.
"We will have to replace many of our workers, therebyrendering the existing manpower jobless."
(Additional reporting by Alistair Scrutton in New Delhi;Writing by Alistair Scrutton; Editing by Simon Denyer and DavidFox)
