This paper approached concepts of self-other dialectic and the politics of from aspect of Hegel's self-consciousness chapter in Phenomenology of Spirit. Various authors attribute Hegel as a source and inspiration for current theories of identity politics. This article is, therefore, focused on examining implication of Hegel's idea of 'recognition' and 'self-consciousness' on contemporary debates of identity politics. Hegel has an enormous contribution to current debate on identity politics. This article shows that with specific reference to the Phenomenology of Spirit, Hegel's understanding of 'recognition' in terms of dialectic of consciousness is vital to see contemporary theory of politics of recognition in a broader epistemological and ontological basis. When it comes to more practical and empirical political situation of these days, his idea of freedom and recognition has many important insights that support constitutional liberal system to handle 'needs' and 'demands' of recognition raised in identity politics. As Hegel has emphasised in many of his works, in progress of human history, state (including established institutions) is Absolute Spirit that actualises reciprocal freedom and mutual recognition of individuals in a broader political space. Based on these Hegelian insights, study concluded that education, deliberative democracy, and institutions are substantial to handle competing 'needs' and 'demands' of recognition in identity politics without granting group rights and interests a constitutional recognition.