War of the creamy layers, April 20, 2008

One of our great triumphs as a nation is that we widely condemn social discrimination. This was demonstrated again on April 11 when the Supreme Court allowed a 27 per cent quota for Other Backward Castes (OBCs) in higher education. I am against all quotas but I support vigorous affirmative action. Our leaders in the future will be next generation OBCs, and if they are not better educated, governance will not improve. Why then do I feel a deep pain in my gut over the court judgement? This case, alas, was not about social justice; nor about legitimate OBC aspirations. It is was about a war between two “creamy layers”--middle class factions of the backwards and forwards-- in which the nation may have lost. I fear this “landmark” judgment will do irreparable damage to our few good institutions.

The ordinary family in the village merely wants a good school to lift its children out of poverty. IITs are as alien to it as the Queen of England. The hidden purpose of the OBC quota was to push the wards of OBC netas, babus and elite into our top institutions via an unfair handicap. But the strategy backfired because the Court has excluded the “creamy layer”. Since the aspirations of OBC voters and politicians are different, the quota controversy was unreal. It was not about compensating for disadvantage. As Mayawati has discovered there are poor Brahmins and rich OBCs.

The India of our dreams is one where everyone will belong to the middle class. High economic growth, of the sort we have today, can deliver this dream. But individuals of talent will play a disproportionate role. Since talent is such a scarce resource, successful nations nurture it through elite institutions like the IITs. They don’t place a person with 20th rank in the IIT-JEE exam in the same classroom as one with 20,000th rank. At the same time they meet the demands of the others through an adequate supply of reasonably good institutions. This is how they achieve excellence and equity.

The clamour for quotas in higher education arises from scarcity. We have very few good colleges because education, unlike industry, has not been liberalized. It is firmly under the control of netas and babus, whose energy is spent in doling out favours. Because the government refuses to give autonomy to universities, less than 50 out of 300 can produce an employable graduate. If they had the freedom to set their own fees, curriculum, salaries, and standards, many of our colleges would take a leap upwards.

By contrast Indian industry is more autonomous. In competing for customers it has been expanding supply at breakneck speed. In March, India achieved a miraculous 300 million mobile phone customers in a country of 200 million households. Before liberalization, we had five million phones in 1990. No one talks about quotas for telephones any more because the market has raised both supply and quality. The same thing could happen to education. Prosperity doesn’t trickle down; it goes down like a flood.

The political class is dead set against liberalizing education because scarcity would disappear. So would the need for quotas and so would vote banks. The roots of individual failure are laid in school. World Bank data shows that Arjun Singh presides over one of the worst primary school systems in the world, worse than many African countries. His job was to reform it. Instead he let loose a caste war. But voters are no fools and they can see through his game. If he thinks the Congress Party win will votes from his game, he is mistaken.