India's ever-increasing reservations

A more divisive society and economic disasters ahead if reservations above 50 per cent are deemed legal by the Supreme Court

Post-independence, the provisions of Article 15 (4) of the Indian Constitution enabled reservations for the socially and educationally backward. Reservations were initially intended to last for 10 years but have been subsequently extended every 10 years. Currently, reservations for scheduled castes (SCs), scheduled tribes (STs) and other backward classes (OBCs) for jobs or seats in government, majority publicly-owned companies and educational institutions add up to 49.5 per cent. In January 2019, a few months before the April-May 2019 Lok Sabha elections, parliament approved an additional 10 per cent reservation for Economically Weaker Sections (EWS). Separately, there are reserved constituencies for SCs and STs in state Assemblies and the Lok Sabha.

The 10 per cent reservation for EWS may not necessarily raise total reservations to 59.5 per cent because of a possible overlap between EWS and SCs-STs-OBCs. Be that as it may, if EWS reservations are implemented, the 1993 nine-judge Supreme Court judgment, which stipulates a 50 per cent ceiling for all reservations combined, is likely to be violated. A number of legal petitions are currently pending against this additional 10 per cent reservation for EWS. Incidentally, even before the 10 per cent reservation for EWS, Tamil Nadu state legislature had approved total reservations of up to 69 per cent. During the campaigning for the forthcoming April 2021 Assembly elections in Tamil Nadu, the Dravida Munnetra Kazhagam party has promised to introduce an even higher 75 per cent quota for state residents. Madhya Pradesh, Karnataka, Andhra Pradesh, Gujarat, Maharashtra and now Haryana have already prescribed policies to reserve employment for locals.

A number of lawsuits have been filed around the country seeking the striking down of reservations above 50 per cent. Specifically, on February 8 it was reported that the Supreme Court has agreed to hear a petition which challenges the constitutionality of Tamil Nadu’s higher than 50 per cent reservations. Consequently, as of now, the legal status and modalities of implementation of domicile-based reservations in states in addition to existing reservations is unclear. Affirmative action through reservations over 50 per cent is unique to India. The argument in favour of such levels of reservations is that the proportions of socially and educationally disadvantaged groups in India are still high.

Transparent and fair implementation of reservations in educational institutions is complicated and has led to interminable lawsuits. For instance, in Allahabad University a contentious issue was whether reservations should be implemented at an overall university level or on a department-specific basis. If reservation quotas are at the university level, individual departments could end up with well over 50 per cent reservations. Another vexed issue is about who should be deemed as part of the “creamy layer” and hence ineligible for OBC reservations. Currently, the creamy layer comprises those who belong to families with annual incomes above Rs 8 lakh. Non-OBCs have misgivings about how income is estimated if OBC families are self-employed. Migrant workers who come, say from Uttar Pradesh and Bihar, live in rented accommodation for decades in Mumbai, Delhi or Bengaluru and may find it difficult to prove residency in the corresponding states. Consequently, state level reservations could break up the Indian labour market into economically inefficient silos and the injustice of it all is blatant.

Illustration: Binay Sinha

According to media reports, the Supreme Court was to hear arguments on the 50 per cent ceiling matter starting on March 15, 2021. The top court should clarify that there cannot be differing levels of reservations across the country with each state enacting its own legislation reserving jobs only for deemed residents of the state. Newspapers have reported that on March 19, 2021, the Supreme Court hearing arguments on behalf of state-specific reservations in Maharashtra had asked, presumably with implicit sarcasm, whether no socio-economic progress has been achieved since independence.

Given the multiple Constitutional amendments, state-level legislation and legal uncertainties and infirmities about court judgments, many may feel confused about the precise implementation status of reservation policies in India. This is probably true of even the most well-informed Indians. Consequently, the central government should present a white paper to parliament to provide clarity about the implementation and consequences of this emotive issue of reservations. Of course, the likelihood of that happening is nil because reservations is a highly sensitive issue for voters and consequently for most political parties.

In India, it is considered bad manners to speak frankly about reservations. If arguments are marshalled against any further increase in reservations or continuation at current levels, emotive arguments are made that thousands of years of discrimination against SCs, STs and OBCs cannot be corrected in a few decades. Admittedly, there has been systematic exploitation and oppression of the backward classes by the better off in India for ages. However, the exploitation of the weak by the strong has been a common feature of human history around the world and persists in myriad forms. An example from the relatively recent past is the extreme impoverishment of the Indian sub-continent caused by around 200 years of British rule, which has been well documented by OECD economist Angus Maddison.

Abstracting from legal imbroglios, the bottom line is that additional reservations would further dilute standards of governance and performance at the central, state and municipal levels and the quality of instruction in educational institutions. For instance, the National Association of Software and Service Companies has publicly indicated that 80 per cent of their affiliated companies feel that reservation policies favouring Haryana state residents would hurt their businesses and impact future investment plans. India’s national and state governments pander to and even promote requests for additional reservations since increasing employment opportunities requires a well-grounded understanding of the economy along with sustained and honest hard work. To sum up, India needs to gradually wean itself off all forms of reservations while providing adequate financial support to those who are socially and educationally backward.

The writer is a former Indian Ambassador and World Bank Treasury professional. Email:  j.bhagwati@gmail.com