The quota bomb ticks away

R Jagannathan
Senior journalist

The Modi government’s unexpected announcement of a scheme to provide 10 per cent reservation in jobs and educational institutions for economically backward groups, subject to certain limitations, has set the cat among the pigeons. On the one hand, this gambit can be seen as an effort to woo the upper castes, who are supposedly estranged from the government for various reasons; on the other, it can be explained as an effort to extend the benefit of quota to groups currently not eligible for it, including various landed castes and minority groups like Muslims and Christians.

The Modi initiative will involve a constitutional amendment to expand the scope for reservation under Articles 15 and 16 by adding a new clause (6) to make the ‘economically weaker sections’ eligible for affirmative action. Article 15 (4) allows affirmative action in favour of the ‘socially and educationally backward classes’ and SC/STs, while Article 16 (4) allows extension of the same benefits for ‘any backward class of citizens which, in the opinion of the state, is not adequately represented in the services under the state.’

Before we categorise this as a masterstroke or a minefield, here is a simple point: unlike existing quotas, this is not about castes, and makes purely economic criteria the core of eligibility (income of less than Rs 8 lakh a year, ownership of land or properties with different limits, among others). Trying to implement such exclusions will be a bureaucratic nightmare, but for the time being there is little doubt that it has shaken the political class. Despite some carping by political opponents, with some saying it is another election ‘jumla’, and others that it may not pass constitutional muster, the fact is no party is keen to oppose the initiative. Most parties would gladly have supported the idea, if only they had been able to garner credit for it. So, at best, they will try to discredit the idea, or bury it in committees of Parliament. Modi has achieved the primary objective of putting his opponents on the backfoot. He has given the country a new talking point before the 2019 elections.

It is not certain that the BJP will benefit electorally from it, even assuming the constitutional amendments are passed. But the downsides should be obvious. New quotas will open up a Pandora’s box of contentious claims in the future, since this 10 per cent quota will be over and above the 49 per cent limit set by the SC in the 1992 Indra Sawhney judgment.

The government can offer good arguments to surmount the Sawhney judgment, for one exception to it already exists: Tamil Nadu has defied the limit by offering 69 per cent quota. Moreover, the NDA government can claim that the principle of equity demands that those not covered by purely caste quota cannot be arbitrarily left out. It can also claim that since religion-based quota is impermissible, the amendment will benefit the poor among the religious minorities. It would thus be true to secular principles without specifically benefiting anyone on the basis of religion.

The real problem lies elsewhere. Assuming the courts, willy-nilly, agree to set aside the Indra Sawhney limits, we can now expect a whole raft of political demands for extending quota even further. If 49 per cent is no longer the limit, why should 59 per cent be? The Sawhney judgment put limits to quota populism; now the restraints will be off.

The future challenges will include demands for new caste-based censuses to expand quota limits based on SC/ST or OBC proportions in the population, or to extend the idea to private sector jobs. Quota in promotions may also gain widespread acceptability, both among the public and the judiciary. States will soon face demands for additional quota for all and sundry.

On the plus side, it is also possible to argue that once caste-less reservation passes legal muster, the logic can be extended to exclude the creamy layers among SC/ST and OBC groups, but the opposition to this will be huge.

Put simply, a short-term electoral advantage for the BJP could well become a long-term nightmare for the country. The prospect of bringing sanity to the quota debate recedes further. The argument in favour of merit, already seen in some quarters as thinly-disguised attempts by the better-off castes to preserve historical advantages, will slowly fade from public memory. Barring extremely high-skilled jobs, quota may come to dominate all low- and medium-skill jobs.

The attractiveness of job and educational quota in government and public sector organisations is indicative of another reality: it is less about jobs and more about the quality of private sector jobs and wages available to aspirational India. With mass poverty now receding, the poor are not just looking for any job, but a job with reasonable wages. India has a wages problem, not a jobs problem. The demand for jobs in government firms ties in neatly with the reality that private jobs at the bottom end of the scale pay poorly or demand longer hours.

The only way out of the quota quagmire is to create an enabling environment for the formalisation and creation of more and better jobs in the private sector. This means amending labour laws to encourage hiring, and reducing deductions from formal sector payslips. Currently, 40 per cent of salaries up to Rs 15,000 can be deducted in the form of social security contributions to EPFO, ESIS, etc. This is too big a deduction. 

Given the logic of first-past-the-post electoral politics, promising quota and offering freebies enable parties to win elections based on a minority of votes, even 30-35 per cent. This makes them open to extending quota populism to small caste groups. The antidote is big-ticket labour market and other reforms that will spark a private sector jobs boom. Even if the courts reject the government’s gambit, it won’t stop others from trying to promise the same. We now have a permanently ticking time-bomb.

Editorial Director, Swarajya magazine