October 28, 2023

Under previous United States Federal government rules, merely being an Indian American was enough to qualify as a socially disadvantaged minority; this criterion applied to all minorities in the U.S., including Blacks, Hispanics, Native Americans, Asian Pacific Islanders, and Asians.

Then, in June, the U.S. Supreme Court ruled that admissions based on race at Harvard University and the University of North Carolina are unconstitutional.

This decision was welcomed by some Indian Americans. They find the minority quotas in college admissions “hypocritical in a country which values meritocracy above all else,” according to TheQUINT.

Yet, at the same time, some Indians ignore meritocracy to secure business contracts and jobs, set aside for economically and socially disadvantaged minorities, by government agencies, businesses, and other institutions. This is despite Indians enjoying numerous advantages, especially when compared to the Blacks and other minorities.

The term “minority” in this context is not a statistical measure. It is applied to groups in the U.S. who have historically faced discrimination, owned few businesses, and held few white collar and management jobs.

Now, under new rules, the advantageous position of Indians will be scrutinized and their claims to minority benefits will likely be challenged.

Following the Supreme Court’s college admissions decision, several lawsuits have been filed by individuals and conservative groups against setting aside contracts and jobs for minorities, a practice also known as affirmative action or diversity-seeking practices.

Already, a judgement in a lawsuit, has forced the Small Business Administration (SBA) to seek proof of social and economic disadvantage from those in its minority business 8(a) program. The program is designed to expand “access to the federal marketplace for businesses who have experienced past discrimination.”

The new SBA rules, announced last month, require applicants to provide a “social disadvantage narrative” that details how an “incident impacted your entry or advancement in the business world.” In addition, businesses applying for the first time for the program will have to show their economic disadvantage through personal net worth, adjusted gross income and assets.

In fiscal year 2022, $22 billion in contracts were awarded to minority businesses under the 8 (a) program. That year, U.S. agencies awarded a total of $70 billion, or more than a tenth of all federal government contracts, “to small business concerns owned and controlled by socially and economically disadvantaged individuals.”

In addition to federal and state government agencies, train and road transport services, airport and port operators, educational institutions, and several private companies, especially in government regulated businesses such as phone, gas and electric utilities, construction, banks, and financial services, annually award billions of dollars in business contracts to minority owned small firms.

The SBA hopes that the new rules will protect its minority programs from being shut down through legal challenges. Similar new rules to qualify as minorities will likely be implemented by other U.S. and state government agencies as well as businesses and institutions.  

In 1965 in a Harvard Commencement speech, President Lyndon B. Johnson described what the minority quotas he initiated had hoped to achieve: “You do not take a person who, for years, has been hobbled by chains and liberate him, bring him up to the starting line of a race and then say, ‘You are free to compete with all the others,’ and still justly believe that you have been completely fair.”

Indians in the U.S. are not hobbled by chains. And yet, studies - such as one done for the Ohio Department of Transportation - have shown that they get a disproportionate share of minority business contracts, relative to their population size.

Contrary to any social or economic disadvantages, data from the 2020 U.S. Census confirms that Indians enjoy several major advantages: four out of five have a college degree; have the highest per capita income of any ethnic community; hold a sizeable number of jobs in technology and on Wall Street; and about 10 per cent of doctors in America are of Indian descent.

Also, none of the four million Indians in the U.S., except for Sikh farmers who emigrated to the U.S. in the early 20th century and their descendants, suffered any historical discrimination and economic hardships.

Up until 1976, Indians were not classified as minorities by the U.S. government. That year, the Association of Indians in America (AIA) lobbied key U.S. lawmakers and government officials to include Indians in the Asian and Pacific Islander category – now known as the Asian category, writes David Bernstein in his book, Classified: The Untold Story of Racial Classifications in America.  

Indians were entitled to minority status, AIA argued, because they “are equally dark-skinned as other nonwhite individuals.” Also, the only label for Indians “is Asian by virtue of geographic origin.”

The original intent for including Asians among minorities was to help uplift the people from Hawaii, Guam, Samoa and other U.S. jurisdictions in Asia and the Pacific, descendants of nineteenth century Chinese railroad workers and Japanese Americans in U.S. government internment camps during World War Two.

Today, U.S. employers, from financial firms, large corporations, technology companies, consultancies and small businesses to universities, hospitals, government agencies and others, proudly point to Indians on their staff as proof of their commitment towards meeting diversity goals, including for senior management and director positions.

In 1976, the Indian League of America (ILA), a rival to the AIA, opposed Indians seeking minority status. The ILA noted, writes Bernstein in his book, that the racial preferences for Indians, despite their high average economic and educational status, would lead to a backlash from Whites and others. The opponents may seek a restrictive quota for Indians, a ceiling instead of a floor, for preferential admissions to educational institutions, job placements and securing government and private business contracts. 

Indeed, as the ILA anticipated, conservative groups, energized by the Supreme Court college admissions decision, are seeking an end to minority quotas in all fields, including for Indians. “I see #SupremeCourt's #AffirmativeAction Decision as the First Step Towards Gaining True #Equality Under the Law,” one conservative activist stated on X, formerly Twitter.  

Given the new rules at the SBA and other entities, Indians may hire lawyers, accountants, and consultants – who operate in the minority food chain - to figure out how best to “shape answers” in order to qualify for minority contracts and jobs.

There is already criticism of the way minority quotas are met. Minority contracts, writes columnist Judge Glock in The Wall Street Journal, have “favored a few connected businesses, encouraged fraud, (and) burdened taxpayers with poor and expensive services.”

Indians who still pursue minority contracts, under the new rules, face major risks. Any fake claims of disadvantage could be reported to the SBA and other government agencies by whistleblowers – employees, business partners or rivals, and others. Indeed, there are several lawyers who advertise their expertise in helping file reports of fraud, in return for a share of the rewards which are based on the size of the fraud. In the case of the SBA, whistleblowers can earn rewards of 15% to 25% of the amount recovered.

In 2016, an Indian American businessman was sentenced to 15 months in prison and asked to pay $144,000 in fines and restitution for conspiring to commit fraud by “illegally obtaining over $6 million in contracts that were meant for small, disadvantaged businesses” under the SBA 8 (a) program. The Federal Bureau of Investigations worked along with other U.S. agencies in investigating the case.

Under the new SBA rules, will there soon be Indian Americans sentenced to prison for falsely claiming to be a disadvantaged minority?

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