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Business News/ Opinion / Views/  Opinion | Reservations based on economic deprivation are an aberration

Opinion | Reservations based on economic deprivation are an aberration

The case being made out for expanding affirmative action lacks an unambiguous rationale

Photo: MintPremium
Photo: Mint

The National Democratic Alliance government legislated recently to reserve 10% of jobs in the government sector and seats in higher education institutions—both in the private and public sector—for the unreserved general category of upper castes and any religion. Two eligibility criteria includes annual household income below 8 lakh and land owned below 5 acres. In stark contrast to its smooth passage in Parliament but with inconsequential outbursts of dissent, the opposition to this expansion of affirmative action outside has been vociferous and has rested on the all-inclusiveness of the income cut-off and its potential as an electoral brahmastra. Although assertions of all-inclusiveness of the generous income cut-off abound, these are essentially broad-brush in nature and devoid of empirical content. Admittedly, lack of recent data is a constraint, but something can be said on the basis of the India Human Development Survey (IHDS) 2015, which covers 2012. Its richness in terms of coverage of caste, religion and income more than compensates for the fact that it is not so recent. Extrapolation to 2018 is somewhat risky except that if inequality in income distribution has risen—a plausible assumption—greater inequality within the unreserved category is likely as also greater leakage to the less economically weaker sections.

Subject to this caveat, two questions are addressed here. Specifically, (i) it is argued below that the economic differentiation within and between castes blunts the sharp distinction between social and economic backwardness; and (ii) in a random draw from the unreserved general category, the quota benefits are likely to accrue more than moderately to the less economically backward and thus undermine the case for uplifting the most deprived.

Let us first consider the cumulative income distributions for 2012. About 98.91% of the rural population and about 96.7% of the urban population lay below the annual household income cut-off of 8 lakh in 2012 (at 2018 prices). Thus there is little doubt about the all-inclusiveness of the income cut-off. Besides, of the total households below 8 lakh, about 68.6% lived in rural areas and the remaining 31.4 % in urban areas. Thus twice as many households in the rural areas were economically backward, relative to the urban.

We considered four income intervals: below 2 lakh, between 2 lakh and 5 lakh, between 5 lakh and 8 lakh and above 8 lakh. Among the rural households, about 86% had incomes below 2 lakh, about 11% 2-5 lakh, about 1.8% 5-8 lakh, and the remaining over 1% above 8 lakh. The urban contrast is striking. A considerably lower share of over 64 % were in the lowest income interval (below 2 lakh), a much higher share of below 28 % in the next higher income interval ( 2-5 lakh), a higher share of about 6 % in the third income interval ( 5-8 lakh) and the remaining in the highest income interval (above 8 lakh). Of the total households below 2 lakh, nearly three-quarters lived in rural areas and the rest in urban areas. So two inferences follow: (i) if economic deprivation or backwardness is the sole criterion of assigning quotas, the target group should be the most economically deprived (that is, households below 2 lakh); (ii) given the fact that the rural population is three times as deprived as the urban, the former deserve a much higher priority in the assignment of quotas.

Based on the IHDS caste classification (Brahmins, forward/general, OBCs, SCs, STs, and others), in each caste—including the upper castes—95% or more belonged to the income cut-off of 8 lakh in both rural and urban areas. Thus the all-inclusiveness of the income criterion is unmistakable. Besides, a little over 21% and 34% of the upper castes of the total households in rural and urban areas, respectively, were below this income criterion, implying that the vast majority of the economically backward belonged to the lower castes. This undermines the sharp distinction between the socially backward and economically backward.

Stark disparities are observed between and within castes. Confining to the urban population, among the Brahmins, about 46 % earned below 2 lakh, and about 36% 2-5 lakh while among the forward/general castes a slightly larger share of about 56% and about 32% belonged to these income intervals. In sharp contrast, among the OBCs, SCs and STs, the corresponding shares were about 69% and nearly 25%, over 68% and about 26%, and 61% and well over 26%, respectively. Thus, it is self-evident that the overlap between social backwardness and economic backwardness was markedly higher among those lower in the caste hierarchy. However, if the quotas are randomly assigned among the upper castes, the risk of leakage to the less economically backward between 2 lakh and 5 lakh is far from negligible.

In conclusion, the case for quotas on the economic backwardness criterion lacks an unambiguous rationale and is thus an aberration. In the absence of employment growth in the public sector, such aberrations may result in a violent backlash and widespread disruption. False or contrived distinctions are not just bad politics but also bad economics.

Vani S. Kulkarni & Raghav Gaiha are with, respectively, University of Pennsylvania and University of Manchester.

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Published: 07 Feb 2019, 11:10 PM IST
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