Introduction :- 

The Act amends Article 15 to enable the government to take special measures (not limited to reservations) for the advancement of “economically weaker sections” (EWS). Up to 10% of seats may be reserved for such sections for admission in educational institutions. Such reservation will not apply to minority educational institutions. The amendment adds Article 16(6) which permits the government to reserve up to 10% of all posts for the “economically weaker sections” of citizens.The reservation of up to 10% for the EWS will be in addition to the existing reservation cap of 50% reservation for SC, ST and OBCs. The central government will notify the “economically weaker sections” of citizens on the basis of family income and other indicators of economic disadvantage.Constitutional recognition to Economically Weaker Section (EWS): For the very first time, economic class is constitutionally recognized as vulnerable section & would form the basis of affirmative action programme. It is a departure from traditional centrality of caste in deciding affirmative action.

Arguments in favour of reservation based on economic status :-

• Need for new deprivation assessment criteria: Caste, while prominent cause of injustice in India, should not be the sole determinant of the backwardness of a class. This is because of the weakening links between the caste and class in changing circumstances.
• In Ram Singh v. Union of India (2015), SC asserted that social deficiencies may exist beyond the concept of caste (e.g. economic status / gender identity as in transgenders). Hence, there is a need to evolve new yardsticks to move away from caste-centric definition of backwardness, so that the list remains dynamic and most distressed can get benefit of affirmative action.
• Increasing dissatisfaction among various sections: Politically, the class issues have been overpowered by caste issues. This has created a sense of dissatisfaction amongst communities with similar or poorer economic status but excluded from caste-based reservation.

Arguments against extending reservations on economic basis: -

• Against equality norm: To balance the equality of opportunity of backward classes ‘against’ the right to equality of everyone else, a cap of 50% was put on the reserved seats. When the quota exceeds 50% limit, it breaches the equality norm.
• In M. Nagaraj v. Union of India (2006), a Constitution Bench ruled that equality is part of the basic structure of the Constitution. The 50% ceiling is a constitutional requirement without which the structure of equality of opportunity would collapse.
• No under-representation: The upper caste is adequately represented in public employment. It is not clear if the government has quantifiable data to show that people from lower income groups are under-represented in its service.
• Problem with the ceiling: By fixing income ceiling for eligibility at ?8 lakh a year — same as the ‘creamy layer’ limit above which OBC candidates become ineligible for reservations — a parity has been created between socially & economically backward classes with limited means.
• Definition of EWS and allotment of quota: The issue with current definition of EWS is that it is too broad and would include large sections of population. Further, it also puts families below poverty line and the ones with income of 8 lakh/annum in the same category.
• Reservation for SCs/STs and non-creamy layer amongst OBCs has correlation with their respective populations. While there is no such clarity on arriving at the 10% EWS quota.
• Challenges in the identification of beneficiaries: In a country where taxable population is still very low due to misrepresentation of income, implementing economic eligibility criteria would be a bureaucratic nightmare.
• ‘Pandora’s box’ of demands: There may be demand from sections of the SCs/STs and OBCs to introduce similar sub-categorization, based on economic criteria, within their respective quotas. It might also fuel demands for new caste-based censuses to expand quota limits based on SC/ST or OBC proportions in the population, or to extend the reservations to private sector jobs. Quota in promotions may also gain widespread acceptability, both among the public and the judiciary.
• Shrinking public sector: With steadily shrinking jobs pool in the Central Government, Central Public Sector Enterprises (CPSEs) and even banks, 10% reservation will not fulfill expectations.
• Anti-Merit: In common perception, reservation has also become synonymous with anti-merit. With extension of reservation, this opinion might get further ingrained in public psyche.
• Tool of populism: Offering reservations has increasingly become tool for political gains in politics. This affects their credibility as a tool for social justice.
• Passage of the Bill: The Bill was not circulated ahead of being introduced, it was not examined by a parliamentary committee & there was hardly any time between its introduction and final discussion.
• Also, the Sinho Commission report of 2010, which the Centre has been citing as the basis for its legislation to grant 10 % reservation to the EWS, never explicitly recommended a reservation for EWS but was only emphatic about ensuring that the EWS get access to all welfare schemes.

Way Forward :-

A 9-judge bench of Supreme Court in Indira Sawhney case (1992) had struck down a provision that earmarked 10% for the economically backward on the grounds that Constitution only provides for addressing social backwardness. However, any such step should carefully be preceded by following considerations :-

• 50% ceiling was put in place to check populism in granting quotas by the political class. There must be an institutional mechanism that recommends classes for reservation.
• Based on the affidavits furnished by the candidates, independent, transparent and non-intrusive verification methods have to be devised so that reservation provisions cannot be misused easily.
• The logic of providing reservation to economically backward people can further be carefully extended to exclude the creamy layers among SC/ST groups.
• The demand for reservation must be seen in light of the quality of private sector jobs and wages available to aspirational India. The only way out of the quota quagmire is to create an enabling environment for the formalization and creation of more and better jobs in the private sector.
• For a long-term solution, it is important to address the major issues like caste divisions majorly in rural areas, job creation in private sector, skill creation and education.