On the face of it, a new kind of reservation in education and jobs solely based on income or economic criteria was destined to face several constitutional hurdles. However, given that the special provision in favour of ‘Economically Weaker Sections’ (EWS) among those who are not eligible for community-based quotas meant for Scheduled Castes, Scheduled Tribes and Other Backward Classes, was introduced through an amendment to the Constitution, only a demonstration that the new quota violated the basic structure of the Constitution would have succeeded in dislodging it. By a majority of three to two, the Supreme Court of India has ruled that the amendment does not violate the basic structure. In the process, the Court has recorded a major paradigm shift in its conception of what constitutes valid affirmative action. For the first time, it has upheld a kind of reservation that specifically excludes those from the three existing categories of beneficiaries and is extended solely on the basis of economic criteria. When in Indra Sawhney (1992), a nine-judge Bench upheld OBC reservation, but favoured exclusion of advanced sections of the beneficiary communities from its purview, it introduced a form of economic criteria for the first time. However, the criteria were used to exclude individuals, while the groups continued to be eligible for reservation. At the same time, the Court struck down a provision for 10% reservation for economically backward sections introduced by the Congress regime, on the ground that the Constitution does not provide for reservation solely based on economic criteria.
The logic behind this scheme of affirmative action was that reservation is a tool of reparation for groups excluded from mainstream avenues of advancement due to caste discrimination, while it should not become a benefit or reward for individual members of the same groups who may have made reasonable progress. This logic was wholly inverted in 2019 when the BJP-led regime amended the Constitution to provide reservation solely on economic criteria to sections other than those enjoying reservation under the categories of SCs, STs and OBCs. The resort to economic or income criterion as the sole marker for identifying a beneficiary is obviously unsustainable from the point of view of equality of opportunity. All five judges agree that the introduction of an economic criterion does not violate the Constitution. However, Justice S. Ravindra Bhat, with Chief Justice of India U.U. Lalit, concurring, has correctly found that the exclusion of groups that already enjoy reservation from accessing this new form of affirmative action violates the equality norm, which is a basic feature of the Constitution.
The Constitution Amendment came with considerable political legitimacy as very few members voted against it. The Court could not have lightly struck it down. The majority acknowledges Parliament’s power to create a new set of criteria and a new target for affirmative action. Their opinions whole-heartedly endorse the exclusion of communities that benefit from existing reservation norms, contending that such exclusion is necessary to achieve the intended object of emancipating economically weaker sections and, if they are included, it may undermine the entire idea of providing such reservation. This approach is clearly flawed because this creates a vertical reservation scheme based on economic weakness, a factor that could be applicable to all communities, but consciously excludes a large segment. There was some merit in the argument that reservation cannot be used as a poverty alleviation measure, and that a collective remedy meant to be compensatory discrimination in favour of historically deprived classes cannot be converted into a scheme to identify individuals based on their low-income levels and confer the same benefit. The existing income criterion of ₹8 lakh a year has already been questioned by the Court in a separate case, as it is liable to result in excessive coverage of socially advanced classes. When those exempted from filing I-T returns are only those with taxable income below ₹2.5 lakh, it makes no sense to extend the reservation benefits to sections earning upto ₹8 lakh. Also, the majority view that the 50% ceiling is applicable only to caste-based quotas and not for EWS reservation is constitutionally unsustainable, as it is a vertical compartment that is carved out of the open competition segment.
Once the idea of using economic criterion alone is accepted in principle, as has been done even by the dissenting opinion, it can only be argued that the benefit should have been modulated to maximise the beneficiaries. The objective of economic emancipation could have been better achieved if the income-based reservation had been thrown open to all sections of society. The fear that some sections may corner a large share of the reservation cake had earlier been partially addressed by the ‘creamy layer’ norm for backward classes, but it also meant that the well-off among them will have to compete in open competition. By introducing an income criterion and barring OBCs, besides SC/ST communities, from the EWS silo, there is a clear violation of equality in their eligibility to avail of a part of the open competition opportunities. The Government should consider both opening up the EWS quota to all communities and keeping the income criterion much lower than the ceiling, perhaps at the same level as the income tax slab, to identify the ‘creamy layer’ so that some poorer sections of communities, if they are crowded out on the OBC or SC/ST merit list, could still avail of some residual benefits under the EWS scheme.