The Supreme Court of India has directed to keep on hold the law providing for a 27 per cent quota in central higher education institutions, including the IITs and IIMs. Casting doubts on the rationale behind using outdated 1931 census data for deciding on the size of OBCs, the court has called for a policy perspective based on up-to-date demographic information. In this context, M. Veerappa Moily, chairman of the Oversight Committee set up by the Centre, has recommended the National Sample Survey (NSS) and the National Family Health Survey (NFHS) as possible sources for such information.

We report below the results of our study based on the most recent NSS data on the ‘Employment and Unemployment Situation in India’. The question regarding reservations is not simply one of using up-to-date information; but more than that. From a policy perspective, it is equally important to examine the rationale underlying the case for reservations, which would throw up the following questions: Is it simply a question of setting aside caste-based quotas in educational institutions of higher learning, if the objective is to promote empowerment and enhance opportunities for the targeted groups? Of course, in an overpopulated developing country like India, one would tend to believe that for a poor, vulnerable household, whose asset endowment consists only of labour, a strategy to promote empowerment and opportunities would have to rely largely on investment in education. If caste and class are co-terminus, there is a case for setting aside a quota for OBCs purely on caste consideration. If not, one has to bring in economic considerations also, as one of the eligibility requirements for the quota in educational institutions.

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