This Article is From Oct 12, 2015

What Hardik Patel Has Misunderstood

The Patels in Gujarat rallying for reservation under Hardik Patel's leadership raises many questions. The first and foremost is: why in Gujarat? Government jobs may well be a big deal in economically backward parts of the country - say, UP or Bihar. But in terms of the growth rate of per capita income, Gujarat has been among the very top of Indian states in the last decade and a half, earning Narendra Modi the title of Vikas Purush and generating nation-wide buzz about the Gujarat model.

Now it is true that some of the social and human development indices in Gujarat are not in line with its rank in terms of the level and growth rate of average incomes as noted in the 2013 report of the Raghuram Rajan committee. Still, Gujarat is indeed top ranked among Indian states in terms of ease of doing business or economic freedom, justifying its image of a business-friendly state.  

What the Patel agitation underscores is the fact that economic growth in Gujarat did not translate into sufficient employment growth. Between 2004-05 and 2009-10, for example, while the country overall experienced a small growth in total employment, Gujarat experienced a net decline, according to the NSSO. A major driver behind Gujarat's impressive industrial growth is the expansion of capital-intensive sectors (e.g., petroleum refining), which do not fuel job growth in the same way as more labour-intensive sectors. Resentment against reservation of seats for socially under-privileged groups in Gujarat is an outgrowth of this phenomenon of jobless growth.  

However, introducing reservation for the Patels or any other group for that matter will hardly solve their problem of unemployment. Given the size of the Indian economy, the reach of the reservation system is fairly limited. The number of government jobs that become available every year is around a meagre 1% of the total number of registered educated unemployed in the country. Just a few weeks ago, 368 job openings for peons in UP resulted in 23 lakh applications, of which 1.5 lakhs were from college graduates, some of them engineers and PhDs. Also, merely 20% of India's total population in the 18+age bracket is enrolled in some higher education institution, private or public. The overall impact of reservations on average educational and economic outcomes is thus bound to be limited to a relatively small segment of the population.

Those who drafted our reservation policies were aware of this. For them, reservation was a necessary step to strengthen the representation of disadvantaged groups in the arena of administrative power. This, they hoped, would make the state machinery more sensitive to the needs of these groups and they, in turn, would feel empowered through a sense of participation in the governance of the country. So, the main objectives of reservation policies in India are the social and political upliftment of the average member of backward castes (SCs, STs, and OBCs, who together constitute approximately two-thirds of the total population). Of course, it was expected that some of these benefits would trickle down in the form of economic progress of these groups as well.   

All studies show that the backward castes are significantly behind the higher castes in terms of education, employment, and economic status. However, one could argue that is because they have been historically poor, and social backwardness is really a reflection of economic backwardness. After all, there is poverty among forward castes too. Which is why many, including Hardik Patel, argue that reservation should be economic class-based, not caste-based.

The problem with this argument is that it denies social discrimination completely. Two individuals of similar economic status do not always have the same access to opportunities in a society where caste prejudice runs deep.

Everyday there are news stories about Dalits facing various forms of social discrimination. For example, a 12-year-old Dalit boy in Jodhpur was recently beaten up by a teacher for touching a plate meant for upper castes during the mid-day meal at his school, causing dozens of other Dalit students from his village to stay away from school in fear. Leaving aside grim news items, research on intergenerational mobility shows that if two generations are compared in terms of education, employment and prosperity (e.g., if the father is less educated what is the probability that the child will be highly educated), economic mobility within the higher castes has historically been much greater than within the lower castes. So saying "why not reservations on economic criteria only" denies the reality of caste-based discrimination and the fact that social identities - and not just economic factors - govern the prospect of upward mobility.

At the same time, some inherent limitations of the reservation policy cannot be overlooked. There is an innate tension between the long-term goal of removing caste-based discrimination, and perpetuating a policy based on caste itself. In implementing this policy, the eligibility criteria for disadvantaged castes are often set lower than those for the general category, which perpetuates the 'backward' tag of these groups. It also creates resentment among those who are economically backward among the forward castes, since it is hard to quantify and compare the disadvantages created by social and economic handicaps. Sensible adjustments can be made to balance between these two types of handicap, which often but not always go together. One would be to limit the benefits of reservation to one or two generations of the same family.  Another would be to give priority to the economically backward members of socially backward groups.

It has to be admitted that the overall effectiveness of the policy of reservations has been limited. The representation of the backward castes in top administrative posts remains as low as 23% in 2011 - after many decades of reservation - though they constitute two-thirds of the whole population. Some could argue this means the percentage of reservation should be increased even further. But in the case of education and jobs, it is often difficult to find enough eligible candidates from these groups,and more often than not the reserved seats lie vacant.

The studies on inter-generational mobility mentioned earlier reveal one silver lining though. It appears that in the last two decades, economic mobility within the lower castes has improved considerably, and is now comparable with mobility within the upper castes. The likely reason for this is the expansion of opportunities in the private sector, both educational and job-related, as a result of economic reforms. After all, since the early 80s, total employment has not changed much in the public sector, but has gone up by more than 60% in the organized private sector. Hence, politically empowering the backward castes through reservations, and increasing their economic mobility through economic reforms and job-creation can actually complement each other.

Without substantial economic reforms, and job growth some of the old fault lines in the country's social and economic terrain are bound to open up. The movement against reservations in Gujarat is a symptom of this.

(Maitreesh Ghatak is Professor of Economics at the London School of Economics, and his main area of research is development economics.)

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