Economic weakness is a pan-India phenomenon

News: In 2019, the India’s Govt instituted a 10% education-and-employment quota for Economically Weaker Sections (EWS) ineligible for the 49.5% of most public jobs and seats reserved for SC, ST and OBC applicants.

To qualify as an EWS candidate, the property owned by one’s family had to be below certain size levels, with annual income from all sources under ₹8 lakh (₹66,667/month)

A study by researchers now offers an estimate of the proportion of non-SC/ST/OBC households earning less than that figure.

What are the findings of the study?

The study was put out by Shamika Ravi of Observer Research Foundation and Mudit Kapoor of Indian Statistical Institute. Its major findings:

– With data drawn from the Periodic Labour Force Survey (PLFS) done in 2018 and 2019, it was found that about 99% of rural and 95% of urban homes earned under ₹66,667 per month.

– About half of rural non-SC/ST/OBC households earned under ₹9,000 per month in rural areas and less than ₹15,000 in urban India.

What is the situation wrt taxpayers and top-earners in India?

According to government records reported last year, India had only 15 million income taxpayers, though many more filed returns.

– About 57% of these individuals had stated incomes of under ₹2.5 lakh per year, some 7% had ₹10-50 lakh and 1% declared earnings above ₹50 lakh.

The latest Hurun India Wealth Report, shows a count of homes with net worth above ₹7 crore (‘dollar millionaires’) up 11% in 2021 at 458,000.

What do the findings reflect?

There is a vast disparity in earnings among Indian homes that cannot claim benefits designed to uplift the socially-disadvantaged.

Prosperity across the country remains sharply skewed, and so concerns of a ‘K-shaped’ recovery from covid are likely to persist.

What are the pending issues with the EWS quota?

Confusion may prevail in some cases of recruitment/admission over whether an EWS applicant might face worse odds of success than a ‘general’ job/seat-seeker.

– There have been so few EWS applicants for the civil services that in 2020, they made the cut with lower test grades than OBC job-seekers. This also stirred up a controversy.

As the 10% quota faces legal challenges, our judiciary is looking at issues like:

– Whether it’s okay to reserve over half of all jobs/seats;

– Whether economic criteria is a valid basis for reservation; and, if so, whether the exclusion of SCs, STs and OBCs as beneficiaries defined this way violates their assurance of equality under the Constitution.

Recently, the Supreme Court asked the Centre to explain how the ₹8 lakh EWS limit was arrived at.

Source: This post is based on the article “Economic weakness is a pan-India phenomenon” published in Livemint on 7th Mar 2022.