Competition versus reservations

Reservations have eroded human capital in the Indian government, regulatory and public sector institutions

The promise of India endures yet in Delhi and several urban areas in the country we have been inhaling toxic air particularly during winter months. The June 2013 television images of buildings in Uttarakhand collapsing into swirling waters, annual floods in Assam, Uttar Pradesh and Bihar, disruptions during the monsoons in Mumbai add to a sense of outrage. Not everyone is that concerned though since the affluent counter pollution with imported air-filters. In such circles, the commentary is about escaping to alternative homes in the hills, flying off to stay with relatives abroad or emigrating for good. 

A couple of days back while clearing out old papers I chanced upon letters I had written to my future wife in the mid-1970s. A letter dated April 27, 1977, when I was stationed in Jalandhar on district training as a recent recruit to the Indian Foreign Service (IFS), refers to my meetings with the deputy commissioner and commissioner. When asked neither of them was willing to talk about why an under-trial prisoner accused of petty theft was tortured to death in a jail located in the heart of Jalandhar. That was 42 years ago and perhaps there is greater accountability now. However, the rape and murder in Badaun (Uttar Pradesh) of two minor girls in May 2014 and the rape of another girl and killing of her relatives in Unnao (UP) during 2017-19 paints a picture of despair about India’s justice system. 

As for the opportunity costs of the ongoing slowdown in India’s economic growth and consequent frustrations caused by burgeoning underemployment, there is little left to say. To add insult to injury, we are subjected to inane homilies by central-state government officials/ministers about why it is someone else’s responsibility. Glaring examples of personal interest driven politics, as was amply evident in Maharashtra on November 23, 2019, have become all too common. All this and more are the sad realities that Indians are witness to with regularity. 

Illustration by Binay Sinha

The environmental degradation, worrisome internal security situation and economic slowdown are not merely due to insensitive officials, inadequate domestic savings, doubts about corporate creditworthiness inhibiting fresh lending, overvalued rupee and so on and on. It is also about the significant erosion of human capital in government, regulatory and educational circles that has contributed to distortions in competent and impartial decision-making. 

As of now, at least 49.5 per cent of vacancies are mandatorily reserved for Dalits, Scheduled Tribes and Other Backward Classes (OBCs) in most states and the central government. Tamil Nadu has passed legislation for a higher level of 69 per cent reservation in that state. There is talk about reservations of jobs in Madhya Pradesh and Maharashtra for those who are deemed indigenous to those states.
 

On January 12, 2019, the central government notified an additional 10 per cent reservation for “the advancement of any economically weaker sections (EWSs) of citizens”. This reservation would be for families with income below Rs 8 lakh per annum. This amendment of Articles 15 &16 of the Constitution thus raising total reservations to 59.5 per cent is inconsistent with a 1992 Supreme Court ceiling of 50 per cent for all reservations put together. In September 2017, the maximum family income for three consecutive years, to be eligible for OBC reservations, was raised to Rs 8 lakh per annum. It is unclear how this maximum permissible annual family income of Rs 8 lakh is estimated on a reliable and consistent basis across the country.  

There have been numerous debates in the Constituent Assembly, in state Assemblies and the national Parliament about the need to correct past injustices by enabling weaker sections to obtain employment and entry to institutions set up by government. The consequent reservation policies have served India well. At the same time, over the decades, human capital has been diluted due to a progressive increase in reservation quotas and reductions in minimum educational qualifying standards. Further, caste and OBC reservations have unintentionally created privileged categories among the disadvantaged. For instance, reservations have not helped an overwhelming majority of those who are deprived because of their lower educational levels compared to the better off among the quota eligible communities. In any case, job quotas within the organised sector cannot address widespread Indian underemployment since about 77 per cent of the country’s workforce is self-employed or casual labour. 

The most valuable “capital” in any country has to be its stock of public-spirited non-partisan specialists, accomplished professionals and academics. Currently, many in crucial official, regulatory and specialised positions, including some who were selected on the basis of quotas, do not meet basic standards of domain knowledge. This tends to lower standards in non-official circles too. An important step towards better governance would be to mandate that all government, regulatory and public sector positions are staffed by those who have been selected through competitive processes. More than 70 years after independence, it is high time we started ending all forms of reservations including informal religious affiliation-based quotas. A reasonable approach would be to halve reservations by 2024 and drop these altogether by 2029. 

Media reports suggest that to increase their vote share the National Democratic Alliance (NDA) parties led by the Bharatiya Janata Party (BJP) made a pitch for the support of the majority Hindu community in the 2014 Lok Sabha elections. The same strategy combined with an additional 10 per cent reservation for the EWSs probably contributed to an even larger number of seats for the BJP in the general elections of May 2019. Religion-based politics was a key element in the electoral strategies of most Indian parties from 1971 onwards and has proved to be divisive. Similarly, the political self-interest driven support for reservations has resulted in resentments within and across communities. One way to stem this inexorable slide towards mediocrity and worse in matters that impact India’s overall development is for a new political party to represent the 50.5 per cent of the population who are currently excluded from reservations. 

The writer is former Ambassador, senior Ministry of Finance official and World Bank Treasury specialist; j.bhagwati@gmail.com