Shifts and stagnancy in the caste profile of our asset rich and poor

OBCs are most over-represented among the asset-rich in Tamil Nadu, a state known for its welfare policies and a higher reservation rate for backward and disadvantaged caste groups, while they are under-represented in Gujarat, Bihar and Uttar Pradesh.

During a parliamentary debate last month, demands for a caste census and the removal of a 50% cap on reserved seats for central government jobs and admissions to central educational institutions took centre stage. The cap was breached in 2019, when an additional 10% quota came into place for India’s economically weaker sections (EWSs) on top of the already-existing 49.5%: 27% Other Backward Classes (OBCs), 15% Schedule Castes (SCs) and 7.5% Schedule Tribes (STs). In addition, various state governments in India also implement their own affirmative-action policies.

This article compares changes in the share of each caste group in India’s population over time and their share among the asset-poor and asset-rich in India and its major states. While the intention of this analysis is not to justify raising, maintaining or removing the overall quota cap, it helps us understand how different caste groups in the country are placed in terms of prosperity and poverty.

We construct an asset index, using individual-level data from the National Family Health Survey (NFHS) for 2005-06 and 2015-16, taking into account a wide array of consumer durables and vehicles—data on which is available in both rounds of the survey—such as refrigerators, mobile phones, two-wheelers/cars, and colour television sets. We define the bottom 20% of the population as ‘asset poor’ and the top 20% of the population as ‘asset rich’ based on the asset index score. We then take the share of each caste group in the asset poor and asset rich categories at the all-India level and do a cross comparison with their shares in India’s population.

Asset asymmetry
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Asset asymmetry

At the all-India level, the representation of OBCs in both asset rich and poor categories is broadly in line with their population share, with their share among the asset-rich increasing between 2005-06 and 2015-16. SCs and STs continue to have over-representation in the asset- poor category and under-representation in the asset-rich category, with little noticeable difference over time. In contrast, Indians in the general category of caste classification (non-OBCs/SCs/STs) continue to form a higher share of the asset-rich than their share in India’s population. However, their over-representation in the asset-rich category has fallen over time, with a corresponding rise of OBCs in this bracket.

Given that the share in the population of each caste group varies substantially across states, it is important to understand state-wide differences in the over-representation or under-representation of different caste groups in these asset brackets. Among India’s major states, OBCs’ representation in the asset-rich category was broadly in line with or exceeding their population share in 2015-16.

OBCs are most over-represented among the asset-rich in Tamil Nadu, a state known for its welfare policies and a higher reservation rate for backward and disadvantaged caste groups, while they are under-represented in Gujarat, Bihar and Uttar Pradesh.

The OBC group comprises several sub-castes and further research is necessary to understand if better-off groups among OBC castes have a disproportionately larger share among India’s asset rich. In contrast to OBCs, SCs and STs are under-represented in the asset-rich category in all major Indian states, with the most under-representation relative to their population share in Odisha and the lowest in Punjab. By implication, general-category Indians are over-represented in all states among the asset rich.

Future research should aim to explore the causal relationship between affirmative action policies and changes in the caste group’s representation in asset prosperity and asset poverty across time and states. It would be desirable to isolate the impact of such policies and other factors such as economic growth in general and historical determinants of state formation.

Some states in India were linguistically formed, whereas others owe their formation to similar culture and ethnicity, suggesting these may be one of the drivers of the sub-national differences in welfare outcomes in India. Also, people in some states tend to be politically aware and act collectively on a range of issues, while people in other states with consistently low levels of political awareness and a deeply-divided society may be too constrained by political circumstances to demand the effective functioning of government policies.

Further work is also necessary to discover the underlying factors that contribute to differences in state-level policies, the timing of these policies, and why some of them take off while others fade without having much impact. It is also likely that the broader the political base, the higher the state’s capacity for effective policy implementation in terms of channelling resources to the poor. For example, this may be a reason that led India’s southern states to invest more heavily in education and health, as also in a variety of employment-generation programmes.

Overall, our analysis points to a fair representation of OBCs among different asset classes, in line with their population share, and a continued significant under-representation of SC/STs, despite the affirmative-action policies of several decades. This finding has implications for India’s ongoing debate on modifying affirmative-action policies.

(Vidya Mahambare & Sowmya Dhanaraj are, respectively, professor of economics, Great Lakes Institute of Management, Chennai and assistant professor, Madras School of Economics)


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