Issues that the Supreme Court must consider when it hears EWS-NEET case on Wednesday

As the Supreme Court is set to conduct its latest hearing of the litigation over EWS reservation in NEET PG admission tomorrow, it should ask the government to clarify the several conspicuous gaps in its rationale, writes VINEET BHALLA.

————

EARLIER today, the Chief Justice of India N.V. Ramana, at the instance of Solicitor General of India Tushar Mehta, agreed to list the case related to reservation for Economically Weaker Sections (EWS) in admissions to post-graduate medical courses through the National Eligibility cum Entrance Test (Postgraduate) (NEET PG).

The story so far

This comes in the backdrop of the over two weeks-long ongoing demonstrations by resident doctors across the country protesting against the delay in counselling for NEET PG. The delay has been due to the pending litigation over the EWS reservation.

Last week, the union government had filed an affidavit before the Supreme Court stating that on the basis of the recommendations received by it from an expert committee formed by it in this regard, it will be retaining the existing EWS reservation criteria in the All India quota for the examination, and revising the criteria from the next academic year.

The current EWS reservation criteria are laid out in a 2019 memorandum issued by the union government, as per which only those "[p]ersons who are not covered under the scheme of reservation for SCs, STs and OBCs and whose family has gross annual income below Rs 8.00 lakh (Rupees eight lakh only) are to be identified as EWSs for benefit of reservation. Income shall also include income from all sources i.e. salary, agriculture, business, profession, etc. for the financial year prior to the year of application." Persons whose families own at least five acres of agricultural land, or a residential flat of at least 1,000 sq. feet, or a residential plot of at least 100 sq. yards in notified municipalities, or a residential plot of at least 200 sq. yards in non-notified municipalities, are excluded from the purview of this reservation.

The constitutionality of the 103^rd constitutional amendment that introduced EWS reservation was challenged before the Supreme Court soon after the amendment. In August 2020, a three-judge bench of the Supreme Court referred the matter to a larger five-judge Constitutional bench. The latter is yet to conclusively decide on the matter.

Also read: Why Parliament passing 10% quota Bill against 'economic backwardness' defeats the constitutional mandate of reservation

The expert committee, constituted by the union government on November 30 last year to revisit the criteria for EWS reservation after the Supreme Court had, in October last year, questioned the rationale behind fixing eight lakh rupees as the upper limit for EWS income criteria. It had asked the government what exercise it had undertaken and data it used to arrive at the figure, and if this income criterion could be applied uniformly across the country.

On November 25, the union government had indicated that it was willing to revisit the income criterion for EWS reservation, and had formed the committee, composed of former union finance secretary Ajay Bhusan Pandey, Indian Council of Social Science Research member secretary Prof V.K. Malhotra, and Principal Economic Advisor to the union government, Sanjeev Sanyal, to revisit the EWS criteria.

As per the affidavit, the committee had recommended that changing the EWS criteria midway would lead to further delays and complications. However, it had recommended that from the next academic term, the residential assets criteria should be done away with, and candidates from only those families whose annual income is below eight lakh rupees, and who don't own five acres or more of agricultural land would be eligible for EWS reservation.

However, the committee's recommendations, as reflected in the affidavit, fail to respond to some serious concerns relating to the EWS income criteria, as well as claims made to justify the same in a previous affidavit filed by the government before the court on October 26 last year, which I have written about here and here respectively.

Those concerns are briefly reiterated below.

Also read: Unfolding the Enigma of Reservation

Over-inclusive

It can be estimated from the findings of the 2011-12 National Sample Survey Organization's report on Key Indicators of Household Consumer Expenditure, that the monthly income of a household belonging to the top 5% in urban areas with as many as five earning members would be Rs 51,405, and its annual income, about six lakh rupees. Even without accounting for inflation since 2012, this is still a whopping 25% lower than the limit set under the new reservation norm.

As per the Socio-Economic Caste Census 2011, only 8.25% rural households have a monthly income of more than Rs 10,000 (which amounts to an annual income of over 1.2 lakh rupees). According to the Agriculture Census 2015-16, about 86% of land holdings in India are smaller than the prescribed limit of 5 acres. Additionally, as per data from the BCG (Center for Customer Insight) for 2016, about 76% Indian households had an annual income below USD 7,700, which, going by the exchange rate prevailing at that time, would equate to 5.15 lakh rupees.

So, by all accounts, even the revised EWS reservation criteria would cover nearly all Indian households. What is the purpose of a 10% reservation quota for "economically weaker sections" for which a large majority of the population is eligible?

Questionable basis 

In response to the Supreme Court quizzing it about the exercise the government undertook to arrive at the annual household income ceiling of eight lakh rupees, the union government had, in its October affidavit, placed reliance on the 2010 report of the three-member National Commission for Economically Backward Classes, which was constituted in 2006 under the chairmanship of Major General (Retd.) S.R. Sinho by the then United Progressive Alliance-led union government. The report is not available in the public domain.

However, from information available in the public domain, the report had never expressly suggested reservation for EWS. As per an Indian Express report, according to the report, Backward Classes cannot be identified for providing reservation in employment and admission in educational institutions on the basis of economic criteria. Hence, Economically Backward Classes (that is, EWS) can be identified by the State for extending welfare measures only.

Major Gen Sinho himself, in an interview to Economic Times in 2019, stressed that "reservation needs to be on socioeconomic criteria".

In the interest of transparency, the Supreme Court must demand that the union government publish the report that it is relying on to justify its EWS criteria.

Also read: Rethinking the Debate on Reservations

The union government had further claimed in its October affidavit that the Sinho Commission recommended the identification of those whose family income is below the taxable limit as EWS, and averred that the income tax limit is periodically raised from time to time on the basis of cost of living, and at present it stands at INR 8 lakh per annum.

However, at present, only annual income under INR 2.5 lakhs is taxable. Annual income in the slab of INR 2.5-5 lakhs attracts income tax of 5 percent, and that in the slab of INR 5-8 lakhs attracts income tax of 20%. Clearly, there is no nexus between taxable income, and the annual household income ceiling of eight lakh rupees.

Distinction blurred

In its October affidavit, the government admitted that it simply applied the criteria used to determine the creamy layer for exclusion from reservation for Other Backward Classes (OBC) to set EWS eligibility.

By doing this, the government is essentially obliterating the distinction, for the purpose of reservations and by extension, for measuring social backwardness, between OBCs and those that don't constitute the Scheduled Castes, Scheduled Tribes or OBCs (the proportion of the population that is popularly known as 'general category'). After all, if the 'creamy layer' of both groups is the same, and those outside this creamy layer are extended reservation to make up for their backwardness, that means that both groups are similarly placed in the eyes of the State; it is only their proportion which is different, as reflected in the differing quantum of reservation extended to both groups. In which case, why even make differing quotas for both groups, and why not place them both under a single quota?

This has grave political and Constitutional ramifications, and the Supreme Court must ask the union government to clarify its position with regard to the same.

After all, if the level of backwardness of OBCs and EWS from the 'general category' are the same, what is the rationale behind the differing quotas for them? Why not just bunch them into a single quota?

All these questions strike at the root of the EWS income criteria, and don't seem to have been addressed or even considered by the expert committee. It is hoped that the Supreme Court seeks answers from the government on them, otherwise the question marks over EWS reservation will persist.

(Vineet Bhalla is a Delhi-based lawyer, and Assistant Editor at The Leaflet. The views expressed are personal.)