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 Facts & Figures
Dishonesty in Caste Census
Business Standard, India Saturday, May 22, 2010

Surjit S Bhalla
The quota system caters to 60 percentage of the population. Unfortunately planners don't realize that people responds to incentives. In the 1999 survey by NSS. It was found that 36% of the people are OBCs. In a repetition of the same survey in 2004-05, the percentage of OBCs shot up to 41%. Planners have no valid answer to this problem, writes Surjit Bhalla in Business Standard.

On the grounds that more information is always good, or at least cannot hurt, the Indian government is about to embark on a new social experiment — caste will be included as a question in the forthcoming 2011 Census. This will be a first in independent India; the last time caste was included as a question, and the only time, was in 1931. At that time, several castes petitioned the government to classify them as a caste higher to one they actually were. Census 2011, if it does include caste, is likely to show a race to the bottom, with at least 20 percent of the Hindu population declaring themselves as Other Backward Castes (OBCs) when they actually belong to an upper caste. The question the social engineers in the political parties have to answer is whether gathering of this false information serves any purpose.

Most of the arguments over the inclusion of caste in the census, whether made by politicians or the so-called liberals and/or so-called intellectuals supporting this crass exercise, centre on the following two propositions. First, the government targets a large segment of the population for redistribution of income. The government has, over the last 60 years and starting with our fundamentally flawed Constitution, allowed for reservations in access to education, jobs, etc. for the Scheduled Castes (SCs) and Scheduled Tribes (STs). Note that our flawed Constitution did not talk about the need for affirmative action to tackle the justifiable cause of redressing inequality; no, the social engineering objective then, as it is today, was to mandate equality via quotas. In the 1990s, an additional quota was added — a quota for the OBCs. Together with the SCs/STs, the quotas corner at least 60 per cent of the population (approximately 27 per cent SCs/STs and 36 per cent OBCs).

The second proposition follows from the first — if you are targeting more than 60 per cent of the population on the basis of caste, then does it not make sense to count the caste accurately? Of course, it does. So the liberal intellectual, and the opportunistic politician, rests her case — we must include caste in the census.

The Indian politician has always refused to acknowledge the red blood of its citizenry. She believes she can mandate and legislate and the desired results will follow. No amount of evidence will convince her that people act according to incentives. When this fact is pointed out, she knowingly retorts: yes, people acted according to incentives and look where it got the world in 2008?! That the retort is a non sequitur totally escapes such learned intellectuals.

That people do act according to incentives is revealed by the following “natural experiment”. In 1999-2000, the large-scale NSS survey asked the caste question for the first time and found out that approximately 36 percent of the population was OBC (this includes about 4 per cent Muslim OBCs). When the same survey was repeated five years later in 2004-05, the share of the OBC population had shot up to 41 per cent. The question one needs to answer is whether such an increase could come about due to “natural” forces. The table illustrates the simple incentive math behind the increase. About 50 million people raced to the bottom in classifying themselves as OBCs when they most likely were not. Given that the Hindu population is about 55 per cent of the total, about two in every 10 non-OBC Hindu lied to the NSS. Perhaps lying is a bit extreme accusation — it could be that the OBCs, knowing that they were now eligible to have more benefits for their kids, went out and celebrated by producing more kids.

That might be a bigger lie. As the table shows, for the celebration to be realistic, the OBC women would have had to have catapulted themselves from a national average fertility rate of 2.5 to an 18th century level of 6.9! Or, phrased differently, in 1999-2000, the approximately 110 million OBC women in the age group of 20-40 started producing one kid every three years versus the one kid every eight years they produced prior to the incentive effects of the OBC quotas.

There is one additional aspect of the incentive effect that I don’t understand. And that is the attitude of the Dalits towards the introduction of the quotas for the OBCs. The natural Dalit argument should be — look, quotas were introduced for SCs/STs as at best a partial compensation for the centuries of discrimination practised by Hindus, both OBCs and non-OBCs. How dare the OBCs now demand compensation at our expense. There is no question that the real losers from the OBC quotas, and inflated OBCs in census, will be the Dalits and the STs. Their status as recipients of government compensation gets diluted when others are also given a special status. Today the OBCs, and tomorrow justifiably the Muslims, and the day after, justifiably, the poor Indian citizen, and the day after, women. Pretty soon, from being a special status of a quarter of the population, the Dalit will become a non-special 90 per cent of the population.

A final point — history, philosophy, religion, all teach us the value and importance of drawing a line, a Laxman Rekha, which should not be crossed no matter what the (evil) temptation. If the Congress accepts caste as part of the census, it will prove to all the doubters that it is a valueless party, a party now reaching its nadir. It is a party for sale to the highest bidder. How can they then claim that red blood does not flow in our veins?

This article was published in the Business Standard on Saturday, May 22, 2010. Please read the original article here.
Author : The author is Chairman and Managing Partner, Oxus Investments, a New Delhi based Asset Management Co
Tags- Find more articles on - OBC | quota | SC | ST

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