The Economist recently wrote about (article: With reservations) the current debate within India about whether the existing affirmative action (called “reservations” in India) quota legislation for the poor should be extended from higher-education education and government jobs to private companies.

First, there are a variety of viewpoints of who should get affirmative action benefits. Historically, these benefits have mostly been allocated to dalits (aka untouchables) and tribal peoples. Some now advocate that these reservations should also apply to the [much larger group of] lower caste peoples (some estimate at 500M+ in India) and non-Hindu poor including Muslims. There are many complicating factors and opinions on this due to the significant political partisanship of many of these groups. See my post on the India caste system for more details on this.

Second, there is a significant difference in attitude to caste within urban environment (where caste is discriminated against less) and rural (where it is still very strong). This makes it difficult to create laws which have the intended benefits of removing discrimination while not unhelpfully propping up those who don’t need the help and abuse these guarantees.

Third, the article notes that another confusing factor is that low-caste Indians are getting less poor at almost the same rate as the general population. The statistic they note is that between 1983 and 2004, the low-caste Indians spending power increased by 26.7% compared with 27.7% for the average Indian (source: National Sample Survey Organisation).

Fourth, there are also regional differences. In northern India, they note that for historical reasons that commerce is dominated by members of a few business castes, while in south India the business community has been more open to members of non-business castes.

So, does it really make sense to extend affirmative action quotas en masse to the private sector? Is this the right approach and priority to helping the poor? What do others think?