Most of India now poor going by reservation bill PDF Print E-mail
Tuesday, 15 January 2019 05:30
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If the UPA declared two thirds of the country poor with its food bill, the BJP has now raised this to over four fifths


If it wasn’t bad enough that, with a view to cementing its support amongst upper-caste voters—theoretically, even Muslims and Christians are entitled to the quota—the Narendra Modi government decided to implement a 10% jobs and education reservations scheme, what is worse is the income cut-off used. The government has used a family income of Rs8 lakh per year as the cut-off for what it calls ‘economically weaker sections’. In other words, a family earning as much as Rs65,000 per month is to be considered ‘economically weak’. Anyone even remotely familiar with India’s income structure knows that such families aren’t economically weak, rather they are part of the burgeoning middle class. Indeed, data sourced from the Price ICE 360 survey estimates that over 85% of Indian families have an annual income of less than Rs8 lakh—official data from the National Sample Survey only estimates consumption, not income. In other words, the bulk of India’s population—after removing SCs, STs and OBCs—is entitled to this reservation; while the ordinance allows for reservations in even private educational institutions, some news reports suggest the government is going to implement only reservations in government-funded universities for now.

Interestingly, while the government is looking at an income cut-off of Rs8 lakh per family, it levies income tax on people who earn as little as Rs2.5 lakh per year. Even if you assume there are two earning members per family, this means families earning more than Rs5 lakh per year are supposed to pay tax, but are still considered ‘economically weak’ from the point of view of reservations.

Some, like former PMEAC member Surjit Bhalla, argue (bit.ly/2RFTEJd) that, while this issue is being raised now, this should have been done in 2004, 2008 and 2013 when the UPA raised the ‘creamy layer’ level for OBCs; the BJP repeated this in 2017. That is a partly legitimate point to make since the ‘creamy layer’ cutoff is too high—no one that has an income above it is entitled to the quota—and allows even well-off OBCs to get access to quotas. The OBC quota, however, was conceived as something for all OBCs—in the same way that the SC/ST quota is for all families irrespective of their incomes—and it was only later that, to put some kind of check on the well-off cornering the quotas, that the ‘creamy layer’ definition was brought in. While ‘creamy layer’, by definition, applies to the top 5% or so of any group, even less if you look at the thickness of the layer of cream in a bowl of milk, this is very different from saying that anyone who is not ‘creamy layer’ is ‘economically backward’.

Ironically, when, under the influence of Sonia Gandhi’s National Advisory Council, the UPA gave very heavily subsidised food to two-thirds of the country, this was described as rampant populism since it was inconceivable that two-thirds of the country was so poor that it needed subsidies; more so when this was contrasted with their spending on, say, mobile phones. Sadly, with elections around the corner, the government now feels it is okay to give benefits to over four-fifths of families even when its very successful #GiveItUp campaign tried to stop supply of subsidised LPG for families earning more than Rs10 lakh, presumably because they were seen as upper-income families.



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