OPINION I Economic Times

The Haryana government’s decision to implement the Supreme Court’s August 2024 order on sub-categorization within the Scheduled Castes (SC) reservation system marks a transformative shift in India’s approach to affirmative action. This move allows states to create sub-categories within the SC community, ensuring that reservation benefits are more effectively targeted toward the economically disadvantaged. Haryana’s swift action sets a powerful example for other states to follow, showcasing how policy can address the internal disparities within the SC community. This sub-categorization strategy seeks to refine affirmative action by ensuring that the most marginalized sections of society, who are still in need of support, receive the intended benefits.

According to the PRICE ICE 360 survey, India’s 112 million SC/ST households represent nearly a third of the total households, but they are economically divided. Around 7 million SC/ST households, or about 6%, earn more than ?15 lakh annually – the majority residing (87%) in high-income states such as Maharashtra, Tamil Nadu, Punjab, Gujarat, Karnataka and Delhi. These households often include professionals in high-paying jobs, such as doctors, engineers, lawyers, chartered accountants, and business owners. Others hold senior positions in government services, such as IAS or IPS officers, and even elected politicians who have climbed the ladder of power and prosperity. Similarly, households with members in high-ranking corporate or public sector roles—such as CEOs, CFOs, or directors—have achieved financial security through their professions. In such cases, the reservation system has already facilitated upward mobility and allowed these families to achieve economic stability and success. Continuing to extend reservation benefits to them goes against the very purpose of affirmative action, which is to uplift the most marginalized.

In contrast, the majority of SC/ST households—about 14 million, including those with graduates and earn about Rs. 1-5 lakh annually, majority (66%) residing in poorer states like Bihar, Uttar Pradesh, Maharashtra, Orissa, Karnataka, Jharkhand and Madhya Pradesh  —continue to face significant economic struggles. Many of these households depend on unstable jobs like manual labor, small-scale farming, or petty trading, and despite having educational qualifications, they have not been able to escape poverty. This is where the sub-categorization approach comes into play. The PRICE ICE 360 data highlight that wealthier SC/ST families are far more likely to own assets such as cars, whereas car ownership is negligible among poorer households, even those with graduates. This economic divide underscores the need for sub-categorization to prioritize those who are genuinely struggling. By recognizing that different segments of the SC/ST community have vastly different economic realities, sub-categorization aims to ensure that the benefits of affirmative action are directed toward the most vulnerable.

The Supreme Court’s ruling on sub-categorization is designed to correct the imbalance that has allowed wealthier segments of the SC community to dominate opportunities meant for the economically disadvantaged. By excluding the “creamy layer”—those who have already attained socioeconomic stability—the reservation system can now focus on uplifting those who remain trapped in poverty. Sub-categorization ensures that the benefits of affirmative action are not diluted by extending them to those who no longer need them. This change in policy design is expected to make the reservation system more efficient and just, helping those who still face barriers to social and economic mobility.

While the Supreme Court’s ruling is a positive development for ensuring more equitable affirmative action, its implementation poses challenges. Identifying the creamy layer within SC/ST communities will require states to develop clear, fair, and transparent criteria. These criteria must take into account income levels, professional achievements, education, and asset ownership. At the same time, it is essential that those SC/ST families still facing significant social and economic barriers, despite some advancement, are not unfairly excluded from the benefits. This balancing act between ensuring fairness and avoiding exclusion requires thoughtful policy design and data-driven decision-making to avoid unintended consequences.

States must also be prepared to handle potential political and social pushback. Excluding certain affluent SC/ST households, especially those with high-profile figures like politicians or senior government officials, may generate resistance. The process of identifying the creamy layer must be handled sensitively and communicated effectively to avoid alienating groups that may feel disenfranchised by the changes. Additionally, public outreach and transparency are crucial to building trust in the process, as miscommunication could foster resentment and lead to legal challenges that delay or derail the implementation of sub-categorization.

Ultimately, the success of this policy depends on the commitment of state governments across India. If implemented thoughtfully, sub-categorization has the potential to transform India’s reservation system into a more equitable and effective tool for social justice, fostering upward mobility for millions of SC/ST households. The Supreme Court has laid the foundation, and Haryana has shown the way. Now, it is up to the rest of the states to ensure that the benefits of affirmative action reach those who need them most, securing a brighter future for the most disadvantaged members of society. In this new era of targeted affirmative action, the focus shifts toward reducing economic disparities within marginalized groups, ensuring that reservation benefits truly reach the people they were designed to help.