Meritocracy & reservations

Has merit become a bad word in India? For India's exceptional human resources to remain in the country, it needs to phase out all caste, community, and income-based reservations

The Supreme Court’s November 7 ruling upheld the 103rd Constitutional amendment allowing an additional 10 per cent reservation for economically weaker sections (EWSs). To be eligible for this reservation benefit, the annual family income must be below Rs 8 lakh, along with ceilings on ownership of residential property and agricultural land holding, which should be less than 5 acres. This new 10 per cent reservation would exclude scheduled castes (SCs), scheduled tribes (STs) and other backward classes (OBCs). Total reservations would henceforth be 59.5 per cent, made up of 15, 7.5 and 27 per cent of reservations for SCs, STs and OBCs, respectively, plus 10 per cent for EWSs. Even without the 10 per cent reservation for EWSs, Tamil Nadu is already at a total reservation of 69 per cent.

The November 7 judgement was three in favour and two against. The majority Supreme Court opinion has ruled in favour of the poor irrespective of their caste or social background. Specifically, on the side of the majority judgement, Justice Bela M Trivedi has recorded that “at the end of 75 years of our independence, we need to revisit the system of reservation”. Justice J B Pardiwala, also on the majority side, has commented that “reservation is not an end —reservation should not be allowed to become a vested interest.”

The majority opinion appears to be in favour of reducing or even dropping reservations based solely on backwardness. The Chief Justice of the Supreme Court was one of the two judges who dissented in this case on the grounds that income-based reservation violates the hitherto accepted norms for reservations. What is invariably missing from arguments for quotas is how the socially disadvantaged can be enabled to compete successfully for educational or job openings. Clearly, quotas are needed along with merit-based scholarships in the best government and private schools and colleges. This article reflects on this Supreme Court judgement, stated intentions of some state governments to legislate for even higher levels of quotas based on social backwardness or domicile status and the implications of such reservations.

Within four days of the judgement on November 11, the Jharkhand Assembly raised the total reservation quota based on social backwardness or economic necessity from 59.5 to 77 per cent. The additional 17.5 per cent reservation would be for those domiciled in Jharkhand, which would be determined from land records going back to 1932. According to Chief Minister Hemant Soren, the state Assembly Bill to this effect would become effective after the central government carries out the required amendment to include this legislation in the ninth Schedule to place it beyond judicial scrutiny. However, in 2007, the Supreme Court had ruled that no law, even if included in the ninth Schedule, can evade the test of whether it violates the Constitution’s “basic structure”. Other states could follow Jharkhand with even higher quotas for those deemed to be socially and economically disadvantaged residents of their respective states. Disputes relating to the verification of backwardness and/or domicile status would inevitably lead to endless legal tangles in courts. 

Illustration: Binay Sinha

Several commentators and the Dravida Munnetra Kazhagam party in Tamil Nadu have expressed their vehement opposition to the exclusion of SCs, STs and OBCs from the 10 per cent quota for EWSs. The Congress party supported this quota for EWSs initially but has subsequently expressed doubts about the exclusion of SCs, STs and OBCs from this new quota for EWSs. Many others have commented that an income of Rs 8 lakh per annum is higher than that of most Indian families, and it is unclear how incomes of those working in informal sectors would be estimated transparently and reliably.

Going way back in time, one of the multiple examples of the British divide and rule policy was the “Communal Award” of April 16, 1932. This Award laid down rules for provincial elections and separate electorates were set up for Muslims, Europeans, Sikhs, Indian Christians, and Anglo-Indians. The socially-discriminated against Depressed Classes (DCs) were allotted constituencies in which they alone could vote. Mahatma Gandhi opposed such segregated electorates for DCs and more seats were allocated to them out of seats meant for non-Muslims. Other earmarked seats were allotted to industry and landowners. The total numbers of seats and those reserved for Muslims and DCs are listed in the table (see, Communal Award).

On July 7, 1925, Frederick E Smith, the then secretary of state for India remarked dismissively about India as one country in the UK’s House of Lords that “to talk of India as an entity is as absurd as to talk of Europe as an entity…there never has been such a nation…” Major Indian political parties seem intent on proving Smith right since these repeated increases in reservations after independence have made inter-community relations more fractious. Instead of providing quality education, including generous scholarships to the socially and economically disadvantaged, successive Indian central and state governments have resorted to doling out quotas. 

In the 1970s, the highest income tax rate in India was over 90 per cent and it is well recognised that excessively high taxation fosters flight of capital to tax havens. Similarly, the ever increasing reservation quotas has contributed towards motivating talented human capital to leave India. On balance, to encourage India’s exceptional human resources to remain in the country, we need to phase out all caste, community, and income-based reservations over the next 10 years.

j.bhagwati@gmail.com. The writer is a former Indian Ambassador, World Bank Treasury expert, and currently a distinguished fellow at the Centre for Social and Economic Progress