SC split verdict on EWS quota boosts Modi before Gujarat, HP polls

New Delhi: Can poverty be the basis for reservations in education and employment for those not covered under any other quota?

Yes, according to the Supreme Court.

A split bench of the Court has upheld the Modi government's decision to introduce a 10 per cent quota for the economically weaker sections (EWS).

Also read: Supreme Court upholds EWS quota: BJP, Congress seek credit

The EWS reservation verdict has come as a big boost for Prime Minister Narendra Modi and the BJP ahead of the assembly elections in Gujarat and Himachal Pradesh.

There was rejoicing among the voters in these states as elsewhere, who did not belong to the communities that are not covered under the quotas for the Scheduled Castes (SC), Scheduled Tribes (ST), and Other Backward Classes (OBCs), hailed the development.

The landmark verdict on November 7 upheld the validity of the 103rd Constitutional amendment providing a 10% quota for EWS before the Lok Sabha polls of 2019.  

In fact, the Modi government's decision had boosted the prospects of the BJP all over the country as those castes who were left out of the reservation system, like the Patels in Gujarat, Jats in Haryana, Marathas in Maharashtra and Lingayats in Karnataka, had expressed satisfaction and doused their aggressive demand for quota for their community members.

But the verdict is not likely to end the debate over reservations for economically weaker sections any time soon.

Those opposed to it have held that it excludes the SCs, STs and OBCs, which were identified by the principles of "historical injustice and lack of representation" in jobs and professions-- on the ground that they enjoy quotas based on their caste.

In fact, those opposed to the EWS category had contended before the apex Court that it is for the poor among the dominant castes only, based on finances and on their caste. The poor from among the already reserved categories were left out.

Legal issues remain open for more debate

The 3:2 verdict was delivered on a batch of 40 petitions that were filed in 2019, raising a legal question on the validity of the amendment and whether the reservation violated the basic structure of the Constitution.

The bench that delivered the verdict on EWS was one of the few Constitution benches.

They were set up by outgoing Chief Justice of India U U Lalit when he took charge and completed its hearing that lasted for six-and-half days.

Justices Dinesh Maheshwar, Bela M. Trivedi and J.B. Pardiwala upheld the verdict while CJI Lalit went with the minority view against the amendment, which was authored by  Justice Ravindra Bhatt.

Justices Maheshwari, Trivedi and Pardiwala held that the EWS quota does not violate the basic structure of the Constitution. CJI U U Lalit and Justice Ravindra Bhat did not concur with the majority view.

Justices Maheshwari and Trivedi in their opinions said the state can make special provisions and the exclusion of SEBCs, STs, SCs and OBCs does not violate the equality code. 

Justice Trivedi also added reservations should have a deadline to usher in an egalitarian society. Justice B. Pardiwala also concurred with Justice Maheswari’s view. He also said efforts should be made to eliminate the causes of backwardness.

On the other hand, Justice Bhat summed up that reservation based on an economic criterion is per se valid, but excluding others who are backward (SC/ST/OBC/SEBC) is a violation of basic structure. 

Excluding them strikes at the essentials of non-discriminatory rule.  He held that economic deprivation and penury may seem to be the whole premise of the EWS quota. But excluding equally other poor sections of the society (personified by SC, ST, SEBC, OBCs) amounts to a “constitutionally prohibited form of discrimination.”

The Modi government maintained that the 10% quota was not an addition to the 50% ceiling on the reservation. It said the EWS quota was an “independent compartment.” 

In fact, the apex Court had repeatedly quizzed the Centre during the hearing whether the EWS quota would take a piece of the pie from the 50% available non-reserved or open category who compete purely based on merit. 

The Centre maintained that it will increase seats by 25% in its institutions to accommodate the EWS quota.

Among the contentions was that the 103rd Constitution Amendment breaches the 50 per cent ceiling on reservation fixed in the 1992 Indra Sawhney, more commonly known as the Mandal Commission case. 

The nine-judge bench in the Indra Sawhney case had ruled that “reservation should not exceed 50 per cent, barring certain extraordinary situations.”

One of the petitioners, Dr Mohan Gopal, had said this was the first time that being a member of the forward classes had been made a prerequisite for getting government assistance. Poverty in the forward classes can also be due to “poor personal wealth management”. 

Reservation based on economic criteria creates a “moral hazard” - a gambler who lost all his money cannot be made eligible for reservation, he argued.

"Parliament knew well that it has no power to provide reservations for socially and educationally forward classes. That it has no power to provide reservation to any class except backward classes as held in the Indira Sawhney judgment. Yet, because of political considerations, it did so deliberately and falsely projecting the Amendment as an economic reservation for the benefit of economically weaker sections,"  Dr Gopal contended.

Advocate Kaleeswaram Raj submitted that fundamental rights are individualistic and the government’s justification for excluding SC, ST and OBCs on the ground that they already take benefit of the 50% quota does not hold water. 

Senior advocate P Wilson had asked whether it was possible to uplift through reservation. He said reservation was not a poverty alleviation scheme. Senior advocate Sanjay Parikh argued that a reservation based solely on economic criteria cannot be sustained in the Constitution. 

Countering them, advocate VK Biju supported the quota, contending that the amendment was democratically passed by Parliament and not a fraud on the Constitution. He said it was a step towards a casteless society.

Unresolved questions

Poverty is an impediment which knows no caste or social backwardness. It transcends across categories and across a geographical spread. It is an impediment which cannot be restricted to advanced castes alone, by any stretch of the imagination, argued the petitioners who opposed EWS.

According to them, reservation is a tool of representation for disadvantaged groups, but the EWS quota inverted it into a scheme for financial upliftment. 

Reservations were granted solely on an anti-discrimination basis and not on an “anti-depravation basis”, the petitioners had contended and argued that the amendment under challenge violated the principle of reservation underlined in the Constitution and propounded through various apex court judgments.

"To judge anyone as poor based on self-declaration and only based on one previous year's income makes the implementation of the whole scheme full of loopholes. No one can be termed as poor by having one year's income of less than ₹8 lakh. In a country where less than 5% file income tax returns and that too is open to manipulations, any such scheme is practically not implementable. To make such an unreal, arbitrary and impractical scheme a part of the Constitution is disrespectful to the Constitution makers and shows a lack of thinking on the part of the Union of India," one of the petitioners had argued.

Dr Gopal argued that those earning a gross annual family income of at or below ₹ 66,666 a month or ₹ 8 lakh annually were eligible for the EWS quota.

"These numbers should be compared against the 2021 estimate of Pew Research, the renowned global fact-tank, that 93.7% of the people of India have a family income of less than ₹25,000 per month per family of four. The EWS criteria will therefore give eligibility not only to Forward Classes amongst this 93.7% but also to those who earn between ₹25,000 and ₹66,000 per month per family of four, who fall amongst an elite 6% of the country that earns above ₹25,000 per family per month," he contended.

Significantly, the DMK-led Tamil Nadu government was one of the parties to object to the economic reservation. It submitted before the bench that in case the top court upholds such a classification, then it would have to revisit the Indra Sawhney or the Mandal judgment, which validated reservation for the socially and economically backward classes (SEBC).