John Stuart Mill’s dictum “No great improvements in the lot of mankind are possible until a great change takes place in the fundamental constitution of their modes of thought” is overlooked in the affirmative action debate. Despite growing evidence to the contrary, Economic Survey 2007-08 glibly asserts growing empowerment of the Scheduled Castes and Tribes and other disadvantaged groups through quotas and extension of financial support through various schemes for their betterment (a case in point being enhanced allocation under Special Central Assistance in the budget for 2008-09). If our analysis has any validity (R. Gaiha, G. Thapa, K. Imai and V. Kulkarni (2008) ‘Deprivation, Disparity and Discrimination in Rural India’, Brown Journal of World Affairs (forthcoming)), there is a real risk of overlooking why poverty persists among disadvantaged groups and their failure to benefit from quotas and enhanced financial allocations.

Our estimate of the incidence of poverty in rural India, based on the 61st round of the NSS, is high — about a quarter of the households were poor in 2004-05. There was, however, substantial variation across the social groups. Among the STs, about 44 per cent of the households were poor, compared to 32 per cent of the SC households and about 19 per cent of the non-ST/SC households.

The factors underlying the poverty gaps are classified into two components: one is the characteristic component and the other is the structural component. The first attributes higher poverty to lower endowments (for instance, amount of land owned) while the second focuses on lower returns to these endowments (that is, income from cultivation). Pair-wise comparisons of ST and SC households are carried out with non-scheduled households as the reference group. The focus is on whether the poverty gaps are due largely to whether the former are not so well endowed as the latter (whether they own smaller amounts of land, are less well-educated but earn the same incremental amounts from such endowments as the reference group) or due to lower rewards or incomes, assuming that they own the same amount of land, possess the same level of education and engage in the same occupation as the reference group.

... contd.