PremiumCriteria drawn from financial status are so arbitrary and unstable in a dynamic economy with high inflation that policy benefits can’t be aimed properly. This yields its own confusion
The Supreme Court has judged it valid under our Constitution to reserve a tenth of all government jobs and educational seats for applicants from households at an economic disadvantage but ineligible for any caste quota. Such a policy was unveiled by India’s political leadership back in 2019. It extended affirmative action beyond redressal of social discrimination, its classic role in a caste-riven country, and sparked a post-Mandal quota debate. Given an upsurge of identity claims, we may eventually need our slice-up of jobs and seats to fully reflect Indian diversity. A financial status check for eligibility, however, pushes our reservation policy into a new realm, one that classifies citizens into ‘economically weaker sections’ (EWS) and must reckon with what constitutes such weakness. This is an exercise that can’t avoid arbitrary cut-offs. What riddles it with further complexity is the fact that economic status is a dynamic variable in an economy with fast growth and high inflation. This makes it hard to target its benefits accurately.
So, what qualifies a candidate for EWS selection? Identity-wise, one should not be eligible for a job or seat kept aside for any caste group or class with a separate quota. After that, to qualify as economically weak, the gross income of one’s family over the past fiscal year should be below ₹8 lakh. While the asset ceilings include family ownership of farm land (must be less than 5 acres), an apartment (under 1,000 square feet) and a residential plot (either under 100 or 200 square yards depending on its location), the earnings part continues to baffle. The EWS inclusion limit happens to be the exclusion level for India’s Other Backward Class (OBC) quota, the rationale offered for which (three decades ago) was a need to exclude a ‘creamy layer’ of better-off OBC families. Today, yearly income of ₹8 lakh per home serves as an official marker of general deprivation, going by the new policy. The OBC cut-off, meanwhile, is up for another upward revision to account for inflation.
With the rupee losing its real value over time, cream can go sour quickly. Who’s well-off or badly-off shows very little stability. While monthly earnings of ₹66,000 may have spelt comfort two decades ago, it has now been deemed so low as to qualify for special help. A decade hence, it could possibly be taken as a pittance. Yet, our income tax policy, which aims to spare all but the better-off, has not kept pace. For non-elderly earners, tax liability kicks in as soon as one earns an annual sum of over ₹2.5 lakh. Even for a double-income household, that’s below the EWS cap. Such a home is weak, it seems, but not too weak to be taxed. The cap doesn’t square with other data sets either. A recent survey by People Research on India’s Consumer Economy, for example, clubbed homes into brackets by distinct patterns of consumption and identified India’s ‘middle class’ as homes with annual incomes in a range of ₹5 lakh to ₹30 lakh (at 2020-21 prices). Estimated at 30% of all homes last year, many of these count as weak in terms of income. So would ‘aspirers’, a bracket of households that earn ₹1.25 lakh to ₹5 lakh and make up 52% of our total, and also ‘destitutes’ that earn less and have a 15% share (as found by that study). While a big chunk of our weak-earning families are likely to be covered by pre-2019 caste-based quotas, it’s evident that the EWS quota’s filters have been set to let a large proportion of the rest through. The irony, then, is how little such a wide gate does to improve their odds of success.