Quota within Quota, Pumped Storage Project, World Development Report 2024- The Middle-Income Trap

((General Studies I – Society Section – Salient features of Indian Society, Diversity of India.

General Studies II – Polity Section – Indian Constitution—Historical Underpinnings, Evolution, Features, Amendments, Significant Provisions and Basic Structure.)

• The Supreme Court’s recent judgment allowing the sub-classification within Scheduled Castes (SCs) represents a significant evolution in India’s affirmative action jurisprudence.
• This landmark decision, delivered by a seven-judge Constitution bench with a 6:1 majority, permits States to classify SCs into sub-groups and extend preferential treatment to the more disadvantaged among them.
• The ruling overrules a 2005 decision that deemed such classifications unconstitutional, thus advancing the depth and reach of social justice.

Key Aspects of the Judgment –

1. Background and Evolution:
2. Formal to Substantive Equality: The concept of reservations has evolved from a focus on formal equality, emphasizing non-discrimination, to substantive equality, aiming to accommodate historical and social disabilities.
3. Historical Context: The judgment traces its origins to a 1975 Punjab government decision to divide its 25% SC reservation into two categories: half for Balmiki and Mazhabi Sikhs, and half for other SCs.
4. Majority Verdict:
5. Heterogeneity within SCs: The Court acknowledged that SCs are not a homogeneous class and that there are varying degrees of backwardness among them.
6. Empirical Evidence: Chief Justice DY Chandrachud and Justice BR Gavai provided historical and empirical evidence demonstrating differences in advancement levels within SC communities.
7. Substantive Equality: The judgment emphasizes substantive equality, addressing internal differences within SCs to achieve actual fairness.
8. Principles for Sub-classification:
9. Rational Differentiation: States must use empirical data to justify sub-classification based on backwardness or representation in public services.
10. Constraints on Sub-classification: Sub-classification must not reserve all seats for one sub-group or exclude other groups entirely.
11. Creamy Layer Concept:
12. Exclusion from Benefits: The judgment suggests applying the creamy layer principle, which excludes wealthier members from reservations, to SCs and STs.
13. Legal Enforceability: Since this was not a litigated issue, these suggestions lack legal enforceability but highlight the need to ensure that the truly disadvantaged benefit from affirmative action.
14. Dissenting Opinion:
15. Homogeneity of SCs: Justice Bela Trivedi dissented, arguing that SCs should be treated as a homogeneous group and only Parliament can alter the Presidential List of SCs.
16. Legislative Competence: She contended that states lack the competence to sub-classify SCs, which would disrupt the uniformity and special status accorded to them.

Historical and Legal Journey –

• Indra Sawhney Judgment (1992): The nine-judge bench allowed sub-classification within backward classes, influencing the recent judgment.
• E.V. Chinnaiah vs A.P. (2005): The Supreme Court ruled against sub-classification within SCs, stating that states could not modify the Presidential List under Article 341.
• Punjab and Haryana High Court (2006): Quashed a sub-quota for Balmikis and Mazhabi Sikhs, citing the 2005 judgment.
• Referral to Larger Bench (2014): The Supreme Court referred the matter to a five-judge bench, which later referred it to a seven-judge bench due to the constitutional implications.

Criticisms by Activists –

1. Fragmentation of SC Identity: Critics argue that sub-classification fragments the SC identity and undermines the solidarity and unity of these communities.
2. Implementation Challenges: Determining and implementing sub-classification criteria may lead to administrative complexities and potential biases.
3. Political Manipulation: There are concerns that political motives might drive sub-classification, leading to realignment of SCs according to vested interests rather than genuine need.
4. Creamy Layer Exclusion: The introduction of the creamy layer concept within SCs and STs is contentious as it deviates from the traditional understanding of these groups’ historical marginalization.

Benefits as per Experts –

1. Targeted Affirmative Action: Sub-classification ensures that the most disadvantaged sections within SCs receive the intended benefits, promoting substantive equality.
2. Addressing Inequality: The judgment acknowledges and addresses the varying levels of advancement within SCs, preventing the monopolization of benefits by more advanced groups.
3. Historical Justice: By recognizing the heterogeneity within SCs, the decision aligns with the principles of historical and social justice, ensuring that affirmative action policies are more effective.
4. Empirical Basis: The requirement for empirical data to justify sub-classification promotes a more evidence-based and rational approach to reservations.

The Supreme Court’s decision to allow sub-classification within SCs represents a progressive step towards achieving substantive equality by recognizing and addressing the varying levels of backwardness within these communities. While the application of the creamy layer principle remains non-binding, the judgment underscores the need to ensure that the benefits of affirmative action reach the most disadvantaged. Justice Bela Trivedi’s dissent highlights the ongoing debate over the homogeneity of SCs and the legislative competence of states, ensuring that the discourse on social justice continues to evolve.

• India’s ongoing debate over genetically modified (GM) food crops reached another milestone with a split verdict from the Supreme Court on allowing GM mustard in fields.
• Currently, the only GM seed approved in India is cotton.
• The success in cotton yield spurred the development of GM seeds for food crops like rice, wheat, tomato, brinjal, and mustard, though none have been released yet.
• DMH-11, or Dhara Mustard Hybrid-11, was developed under a publicly funded project at Delhi University’s biotechnology department.
• It has undergone trials by the Indian Council of Agricultural Research over three seasons in different agro-climatic zones and passed the required metrics.
• Consequently, the Genetic Engineering Appraisal Committee (GEAC), led by the Ministry of Environment and Forests, approved DMH-11 in October 2022, subject to further tests.
• Environmental groups claim DMH-11 is a ‘herbicide-tolerant’ crop that compels farmers to use specific pesticides, potentially causing environmental harm.
• These concerns, along with the GEAC approval, were contested in court.
• The Supreme Court directed the Centre to develop a policy on GM crops.

Dig Deeper: Read about BT-cotton and soil bacterium Bacillus thuringiensis.

• The Union Budget for 2024-25 promised a policy for promoting pumped storage projects to facilitate electricity storage.
• It will contribute to the growth of the share of renewable energy.
• India aims to create 500GW of non-fossil fuel energy by 2030. From 2021 to 2023, India added 23GW of non-fossil generation capacity, with 7.5GW from wind and solar energy in 2023-24.
• Pumped storage functions like a large natural battery, using water to store and generate power.

Dig Deeper: Read about the mechanism of energy generation in the Pumped Storage Project.

• Rajasthan is considering introducing a Bill for the enactment of the Uniform Civil Code (UCC). The State government is studying a similar Bill passed in Uttarakhand.
• The Uniform Civil Code (UCC) aims to replace personal laws based on the scriptures and customs of various religious communities in India with a common set of laws governing every citizen.
• The UCC covers laws related to marriage, divorce, inheritance, adoption, and maintenance.
• The objective is to ensure equal treatment of all citizens irrespective of their religion, gender, or caste, thereby promoting national integration and gender justice.
• Uttarakhand is the first State to enact the UCC.

Dig Deeper: Read about other important Directive Principles of state policies that are in discussion.

• NASSCOM questioned the logic of the GST notice to Infosys. According to Nasscom, the issue at hand involves the applicability of GST through the reverse charge mechanism (RCM).
• The GST enforcement authorities had been issuing notices for remittance by the Indian head office to its foreign branches for cases where there is no service between the head office and the foreign branch for this RCM.
• Allegedly the tax department ignored the fact, that it is not a case of import of service by the head office from the branch.
• Generally, the supplier of goods or services is liable to pay GST. However, in specified cases like imports and other notified supplies, the liability may be cast on the recipient under the reverse charge mechanism.
• Reverse charge means the liability to pay tax is on the recipient of the supply of goods or services instead of the supplier of such goods or services in respect of notified categories of supply.
• There are two types of reverse charge scenarios provided in law.
• First is dependent on the nature of the supply and/or nature of the supplier.
• Second scenario is where taxable supplies by any unregistered person to a registered person are covered.

Dig Deeper: Read about the concept of Anti-Profiteering under GST.

• The World Bank warned that despite being the fastest-growing major economy, it will take India 75 years for its per capita income to reach a quarter of U.S. income levels if current trends continue.
• World Development Report places India among over 100 countries, including China, at risk of falling into the “middle-income trap.”
• Countries such as China, India, Brazil, and South Africa face significant obstacles in becoming high-income nations.
• The World Bank observed that countries typically hit a “trap” at around 10% of annual U.S. GDP per person, equivalent to $8,000 today, which falls within the “middle-income” range.
• As of now, 108 countries are classified as middle-income, with annual GDP per capita between $1,136 and $13,845.
• These nations are home to six billion people, 75% of the global population, with two-thirds living in extreme poverty, yet they generate over 40% of global GDP.
• The World Bank emphasized that the future poses even greater challenges, such as ageing populations and environmental sustainability, necessitating a fresh approach to escape the ‘middle-income trap.’

Dig Deeper: List various important reports and indexes released by the World Bank