India's Outdated Caste and Religion Based Reservations System

 Today when a child is born in India, you need to wonder which community it belongs to - 'reserved or unreserved'. If it belongs to the unreserved community, then the future is not very bright unless the child exhibits extraordinary ability, which is definitely not always possible. So even before the child is born his or her destiny is already decided based on the community. 

India's technological ability is among the best in the world and it is possible to identify people based on their income and wealth levels. Yet India's governments do not want to take any steps to move from a caste based reservation system to an income based system. No politician ever talks about this issue as it is considered 'contentious' and no one wants to damage their political careers. Around fifty percent of the population belongs to reserved communities and one needs only thirty to thirty five percent of the voting share, most of the time to form a government both at the center and the state. So every politician plays it safe. Every politician invokes Ambedkar's philosophy, during every election just to garner minority votes, but by not integrating modern technology with administration they are violating the spirit of Ambedkar, which is to protect the interests of the weak and the poor.

From an economic perspective, a caste based reservation system creates all kinds of perverse incentives. First, there is a creamy layer, a section of the reserved communities which has prospered in the last seven decades owing to this system. By not excluding these sections from the entitlement system, governments are quite clearly fostering inequality and freeloading. It is not clear why no steps are ever taken to identify  economically prosperous groups among the reserved communities and separate them. Second this caste based system creates a sense of entitlement among the reserved communities specially among the youth. A student belonging to reserved communities needs to score significantly lower marks in his examination to secure his degree. Where is the incentive for initiative, hard work and productivity? Thirdly, a section of all public sector jobs are reserved for these castes and on top of that, it is baffling to note that even promotions and reward systems in public sector enterprises are based on caste. What are the incentives that you are trying to create here? Why is not possible to install training systems to bring everyone to a level playing field and then reward based on a merit or performance based system?

From business credit to day-to-day administration, from job creation to education, there are several instances where this caste based entitlement system creates perverse incentives. For generations economically weaker sections of the unreserved communities are losing out due to these lopsided and faulty policies. And yet no one is supposed to speak about it.

It is high time for India's governments to replace this caste based entitlement system by a more prudent economic status based reservations system. It is possible to have a system in place in which government benefits, can kick in during times of need and roll back when income levels are adequate. 

Nobody is entitled to anything in a market driven economy. You need to earn your bread and work for it.