Thursday, April 27 2006 17:10 Hrs (IST) - World Time -

New Delhi: Asian Development Bank today (Apr 27, 2006) warned that job reservation in private sector could lead to swift flight of skilled labour from India.

"After so long, India has become a global player. Now why should we go back. Reservation would prove counterproductive," ADB Chief Economist Ifzal Ali told reporters on the sidelines of a function to release a book on labour markets in Asia.

"The changed economic system in the era of globalisation demands that Indian companies must be one step ahead of their competitors and cope up with the forces unleashed by competition," he said, adding ,"We are living in a different world, our policies are circumscribed by what others do." If the companies do not stay ahead of competitors, the skilled labour would move out of them, he said.

"We have seen this happening in the Philippines, where the middle class left the country," he said.

"In India, while quality of unskilled labour is poor, skilled labour move swiftly between companies and from one region to the other," he said.

On talks of reservation for other backward castes in professional institutions like IITs and IIMs, Ali said such quota would fail in its purpose of broadbasing employment since these institutes cover only handful of the people.

Such talks are in fact "red herring", when issue should have been raising productivity and increasing employment, he said.

The ADB chief economist favoured affirmative action and training of labour to broadbase employment.