Economic Reservation In India: A Panacea or Mirage


Reservation in the Indian society has been a subject matter of discussion for time memorial. Various legislations have come up for stringing the reservation policies. For the longest time, it was based on caste based discrimination. This time the legislation took a bold step with enacting The Constitution (103 Amendment) Act, 2019. This act amended Articles 15 and 16 of the Indian Constitution and enabled the State to make reservations in higher education and matters of public employment on the basis of economic criteria alone. In this article several aspects of this act has been discussed with the help of various judgements. 

KEYWORDS: backward classes, economic inequality, reservation, unaided


On January 14th 2019, the Constitution (103 Amendment) Act, 2019 came into force. It provides for 10 per cent reservation within the jobs and educational institutions to economically backward section in the general category. The fundamental rights under Part III of the Constitution were amended to insert Articles 15(6) and 16(6) in the Constitution. While the amendment to Article 15 is in consonance with reservation to economically backward class for admission to educational institutions which includes private institutions, aided or unaided by the State, amendment to Article 16 talks about reservation of economically weaker sections in case of public employments. At the same time, who all will come under the scope of ‘economically backward classes’ will be notified by the State from time to time on the basis of family income and other indicators of economic disadvantage.


Reservations were established for the SCs and STs in India to recognise this historic injustice done due to caste based discrimination. It was done with an intention to uplift the downtrodden and to provide them with better opportunities that were heretofore denied to them. The reservation system was roughly distributed as 15% of the seats for Scheduled Castes (SCs), 8% for Scheduled Tribes (STs) and 27% for Other Backward Classes (OBCs). This left just about 50% of seats for the ‘general’ category which can also be occupied by the minorities. With the passing of this bill, additional 10% are added in the reservation categorization as 10% of seats can be reserved for citizens falling in the EWS category which is independent of ceilings on existing reservations. This 10% reservation under EWS category is applicable to those persons who are not covered under the existing scheme of reservations for the Scheduled Castes, the Scheduled Tribes and the Socially and Educationally Backward Classes. The Preamble of our Constitution mentions that our Constitution aims at achieving social, political and economic equality in terms of status and opportunities. The directive principles of State policy also mentions in article 46 of the Constitution that the State shall promote with special care the educational and economic interests of the weaker sections of the people. The Statement of Object of the Bill unequivocally states that the economically weaker sections of citizens have largely remained excluded from attending the higher educational institutions and public employment due to their financial incapacity to compete with the persons who are economically more privileged. Further, it states how benefits of existing reservations under clauses (4) and (5) of article 15 and clause (4) of article 16 are generally unavailable to economically backward class people unless they meet the specific criteria of social and educational backwardness.

Judicial Pronouncements

The act has been opposed on various grounds, one of it being that it is exceeding the maximum limit of reservation i.e. 50%. In M. R. Balaji v. State of Mysore the government’s 68% reservation on college admissions was deemed excessive and unreasonable, and was capped at 50%. This contention was affirmed in Indra Sawhney case where the Court capped the caste-based reservation to 50% as it was of the firm belief that no provision of reservation or preference can be so vigorously pursued as to destroy the very concept of equality. Even though the court has set the bar at 50%, it is cardinal to note that this rule can be extended in extraordinary circumstances. The same has been discussed in Indra Sawhney case by the Chief Justice that “While 50 per cent shall be the rule, it is necessary not to put out of consideration certain extraordinary situations inherent in the great diversity of this country and the people.” Another question being raised is whether it is veracious to form reservation solely on the basis of economic criteria. In Indra Sawhney case a nine judge bench, struck down the provision that embarked for 10% reservation for the economic reservation for the economically backward on the ground that economic criteria cannot be the sole basis to determine backwardness. However there have been instances where the Supreme Court held that the identification of backward class cannot be done solely on the basis of caste. In the case of Society for Unaided Private Schools of Rajasthan v. Union of India & Anr. a three-Judge Bench of this Court have approved the classification based on economic criteria as provided under provisions of Right of Children to Free and Compulsory Education Act, 2009. Because even in these caste based reservations, some members of the designated backward classes that were highly advanced socially as well as economically and educationally purloin all the benefits. This is what ‘Creamy Layer’ means. 

Other thing to consider is whether it is arbitrary to impose reservations on unaided institutions. The Constitutional Bench has made it clear in P.A. Inamdar v. State of Maharashtra that reservation policy cannot be imposed on unaided educational institutions, and as they are not receiving any aid from the State. The step taken by the Government to impose this reservations on unaided institutions violates the fundamental right of 19(1)(g) of the institutions. Even though the State is entitled to make any law imposing reasonable restrictions on the exercise of right in Article 19(1)(g), to what extent this imposition is correct can be decided by the Court at best. 


If we go by the objective with which this bill is passed strictly, then we find that it is a commendable decision. Even though social inequality is an affliction our society has been going through for many years now due to the long history of untouchability, its high time we acknowledge economic inequality as a cause for hurdles and precariousness to a lot of people.  It’s true that the economically backward sector will benefit from this legislation, however it can’t be ignored that the act violates various norms set by the apex court. There has been quite a lot of fiasco around the topic of reservations. There are people who support it, and then there are some who do not. PIL has been filed in the Supreme Court challenging the constitutionality of this act. Now it is to see how the Supreme Court finds a balance between the goals that this act aims to achieve and the plethora of violations it causes in the way. 


  1. Ananthakrishnan G., When Supreme Court Said Poverty Can’t Be Test of Backwardness, The Indian Express (8-1-2019, 6:58:07), <>.

  1. Thomas Piketty, Consider Income-Based Reservations in India, 6-12-2015, available at <>

  1. Roshan Kishore, Quota for Economically Weak in General Category could Benefit 190 MN, Hindustan Times, (7-1-2019, 23:39 IST), <>

  1. M.P. Jain, Indian Constitutional Law, LexisNexis, 12 (7th Edn., 2016)

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