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It's been 70 years since India became an independent country and my God what we've had to get through
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There were so many challenges that we faced, so many barriers that we needed to overcome
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to stay one united country.
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We were divided by language, ethnicity, religion and most of all perhaps the deepest division
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And now 70 years after we became independent, caste remains our greatest shame.
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Welcome to The Scene and The Unseen, our weekly podcast on economics, politics and
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Please welcome your host, Amit Barma.
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Welcome to The Scene and The Unseen.
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Beyond, today's episode is about the increasing caste tensions in modern India.
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When the republic was founded, our founders knew how great this challenge was.
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Babasaheb Ambedkar drafted the constitution after all.
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They had enlightened thoughts on what to do about caste.
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But caste has not only not gone away in modern India, it continues to be a huge cause of
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My guest today, Shruti Rajgopalan is a constitutional economist who teaches economics at Purchase
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College in the State University of New York and describes herself as, quote, interested
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in the economic analysis of legal and political institutions, unquote.
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She has viewed caste conflicts in India through an economic lens and I find her analysis of
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caste absolutely fascinating.
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Here's a conversation we had a few days ago.
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Shruti, welcome to the Scene in the Unseen.
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Thanks for inviting me.
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Shruti, it's been 70 years since independence and I think one of the causes of our great
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shame is that we still haven't solved the biggest problem we started out with, which
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We were a country divided by many things, but most of all, I think you'd agree that
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it was caste that divided us and people came up with different solutions, you know, reservations
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were supposed to be part of the solution, there were others who believed that as we
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move towards prosperity, caste distinctions will automatically dissipate, urbanization
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But more and more we find India is a country divided on lines of identity with caste being
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the biggest one of them.
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And you know, I've heard you talk about the structural reasons behind this from an economist
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So that's what I want to talk about today.
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So I think you started off identifying the problem correctly.
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India started out as a highly fractionalized society at the birth of the republic, along
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the lines of religion, caste, language, more than anything else.
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And yet it is the caste fractionalization that has caused more tensions and has sort
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of been more exacerbated over the last 70 years.
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And I think a large part of it is because of certain government policies.
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So just to clarify, caste is not a government created problem.
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But the last 70 years of government policy, one with the economic structure of socialism,
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romanticizing villages and some more specific stuff that we'll get to in a minute, I think
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government policies have exacerbated the caste issue rather than solving it.
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So that's sort of the way I would think about it.
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You also mentioned that I'm an economist and there is an economic point of view when
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So let me just, you know, first of all, put it out there that of all the perverse practices
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we have in India, caste is probably the very worst of them.
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I think it's appalling the way we treat about 40% of our society.
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I think there is a high degree of upper caste elitism that is unforgivable and unjust and
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should just not be accepted in modern day.
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Now having said that, and this is not apologizing for caste structures, but just merely explaining
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it, the caste system has existed for a very long time.
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So I think first we need to acknowledge that it's not possible to just undo it in a day
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or even in a couple of decades.
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It will take a long time to go away.
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There are different kinds of caste practices that are problematic.
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The most important being that you must follow the occupation that belongs to your family
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and you cannot easily switch out of occupations.
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I think that's one of the worst.
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And then there are more or less benign versions of it, which is in terms of the kind of food
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you eat or, you know, marriage endogamy, which is quite an awful idea, but it's also difficult
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to regulate people and rather wrong to regulate who people marry.
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So there are certain caste practices that are going to be more entrenched, are going
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to take longer, are going to be more persistent.
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And there are certain caste practices such as those in the labor market, which really
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should have gone away, which haven't yet gone away.
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So thinking about this from that point of view, I would first say that if you think
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about this as any reasonable human being who believes in liberty and justice, a liberal
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society is where each individual gets to make a choice about the type of individual they
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So the caste system is illiberal at its very core, no matter which way you slice it.
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The fact that no group is given a choice and some groups are superior to others and that
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at birth, your entire life, your habits, your occupation, who you marry, everything is set
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out for you and you have no choice in those decisions is a fundamentally illiberal society.
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Now that's the liberty and justice problem.
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What is the economic problem?
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If you think about liberal markets or rather a market economy, the core idea is that resources
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go to the highest valued use in a functional economy.
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The caste system shackles human capital.
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So the caste system is an extremely market unfriendly structure, which actually interferes
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with the functioning of the market.
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Now what do I mean by shackles human capital?
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He was born in the mahar community within the caste system.
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He was predestined to follow some menial occupation in the village.
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The highest he could have risen to, which his family did rise to at that point in time
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was to join the British military, which also had its caste segregation problems, but you
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know, they at least got out of the village parochial caste system.
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So that's about the best he could have done given those caste structures.
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And look at what Ambedkar did.
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His highest valued use was not to be a gopher in the village, in the back streets of a village
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His highest valued use is to write the Indian constitution and literally give birth to the
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Now the caste system interferes in this process.
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So this is a really big problem.
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If resources cannot go to their highest valued use, how many Ambedkars are existing in India
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who are completely invisible, who could make their life better, who could make Indian society
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so much better and cannot because they are trapped in a particular structure where elites
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control all their choices.
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So that is the problem of the caste system if you think of it from the point of view
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of human capital in a market economy and the movement of human capital in the market economy.
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Now that identifies a problem and this problem is something which was identified and prioritized
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by our founders in a sense, Ambedkar himself was one of the framers of the constitution.
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What are the mistakes we've made in framing the solutions to this problem?
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So I would say again, like I mentioned before, government didn't create the caste system,
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but there are certain economic policies that followed that certainly exacerbated the caste
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And I think I can definitely identify four specific sort of problematic areas with the
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The first two are quite simple and along the lines of what we've been discussing, that
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is the restrictions that the state places on the movement of physical capital, especially
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agricultural physical capital in India.
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And the second is the restrictions on movement of human capital.
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So let me elaborate on both of them.
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Now when it comes to physical capital, the idea is that physical capital also goes to
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its highest valued use and is not trapped in the hands of the human capital, which is
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So for instance, if you think of the existing caste divisions, you know, blacksmith uses
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blacksmith tools, upper castes have our landowning and engage in farming and so on and so forth.
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Now in a market society, the best person to be a blacksmith should be the person using
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the blacksmith tools and the best farmer should have that agricultural land.
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We don't have that system simply because of the number of restrictions that are imposed
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on how property will switch hands.
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So you've already done a couple of podcasts with some of our wonderful friends on the
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restrictions in agriculture.
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Most importantly on land use in agriculture.
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Most states don't allow farmers to sell to non-farmers.
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There is a lot of bureaucracy that is involved in converting land from agricultural use into
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This essentially means that the landowning class cannot exit that system very easily,
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even if they wish to be engaged in some other activity.
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Now, this is obviously mostly upper caste, but caste system does shackle everybody to
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a certain extent, right?
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And this is an example of how it might shackle relatively well of upper caste.
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If you look at the kind of protests that are taking place in India today with the party
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dars in Gujarat or kapus in Andhra Pradesh, one of the really big problems is these are
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landowning groups and their land is not as productive anymore and it's not very easy
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to exit agriculture the way it was in other countries when they were going through the
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transition of low agricultural productivity or improvements in agricultural productivity.
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So then it took fewer people to engage in agriculture.
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So now we have a situation where even upper castes agitate.
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Now imagine this also in terms of lower caste groups.
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If you think of villages and the way villages are built, they are highly segregated, right?
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No caste group can just earn more money and make a bigger home or a bigger mansion or
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try and get access to better public goods and services.
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This is directly related to how do we zone these areas?
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How do we manage land use and how do we easily convert land use from one type of use to another
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type of use for free movement of physical capital?
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So sometimes physical capital doesn't have to literally move like tools.
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It can move in terms of the resource that it provides to society.
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So the land can stay in the same place and move from agricultural use to something completely
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different and far more productive and we don't allow that, making the caste problem worse
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in the sense that it shackles people to what they were supposed to be at birth, which is
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determined by caste in India and pretty much nothing else.
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Now the problem gets worse when you talk about shackling of people's human capital.
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If you're the son of a farmer and destined to be a farmer, or if you're the son of a
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potter and destined to be a potter, then the village structure is extremely problematic
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when it comes to you moving to your highest valued use, right?
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There was no constitution to be drafted in Ambedkar's village, Ambedkar had to leave.
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So now how do we figure out a process by which groups that are not happy, and this is mostly
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lower caste groups because of decades and centuries of oppression, but also in some
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cases upper caste groups who are shackled in their particular occupation, how do they
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You mostly leave in the stages of development that India is in presently.
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You usually leave when there is industrialization and cities become bigger, towns become bigger
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and manufacturing units start demanding more workers.
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Now what has happened in India with its horrific labor law set up is that India has made it
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extremely difficult for its entrepreneurs to hire labor and to hire labor formally.
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So what happens is labor is hired informally, we don't have very good estimates, but we
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know that the informal share of the labor market is way bigger than the formal share.
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Some people say twice as big, some people say three times as big.
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So we know it's a very, very large group.
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So how do you think about that?
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People are not easily able to leave their existing job if they can't have an assurance
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that they will easily get a new job.
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So if you're a blacksmith in a village or a potter in a village and it's not very productive
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and your village is a hell hole when it comes to caste structures, it's not easy for you
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to leave because no one will hire you and no one will hire you because the state has
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made it extremely difficult to hire people and skill them.
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This is a really big problem.
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So labor law reform, when we think about it outside of the caste system, what we mean
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is that labor should be easily able to move from one kind of unit to another kind of unit.
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In other words, when an industry is booming and demanding more labor and human capital,
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it should be able to freely flow to that industry and dying businesses that are not profitable,
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that are not using resources to their highest valued use should be allowed to close.
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That's not the case in India.
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So labor is not able to move freely.
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So even without the parochial caste system, we've created a new caste system in India
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with our existing labor framework because people are stuck in the jobs that they get.
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It's very difficult to switch jobs and it's very difficult to close industries and start
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Now, add caste to this problem.
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You get a particular situation where for each formal job, there are 10 people applying for
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So of course, the person who is choosing among those applications can discriminate more easily
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based on his existing caste prejudice.
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So prejudice is much more easy to exercise when there is artificial shortages that are
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We've created an artificial shortage and now anyone in the formal economy who is doing
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the choosing can impose all their prejudices in that process.
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So I just wanted to clarify.
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So essentially what you're saying is that because there is a scarcity of formal jobs,
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there is far greater demand for them than the supply and the people who are in power
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can then will just choose the guy from his village or his caste or whatever.
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And the second part of what I'm saying is that it's very difficult for someone who
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wants to leave their predestined caste allotted occupation in the first place because it's
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very difficult to transition from one sector of the economy to other sectors of the economy
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in India because it is so difficult to hire and fire labor.
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Yeah, I was getting to that.
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So one, you have the existing caste imbalances perpetuating themselves and others, you have
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fewer people like someone trapped as a potter in a village or a blacksmith or whatever.
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You have fewer of them willing to actually make the move towards cities because most
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of the jobs available will be informal jobs with no guarantees of security and less chances
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of upskilling and so on.
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And there is a third aspect to that problem.
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The more informal the labor market, the more you need to rely on pre-existing networks,
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which in India is mostly based on religion, language and caste.
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So let's say that a potter is extremely entrepreneurial and actually manages to break out of the parochial
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When he reaches the city, the only network he can reach out to is the existing caste
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network because no one else will accept him.
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Now, that is an old problem, but why does he need that network?
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He needs it to survive because he's part of an extremely uncertain and vulnerable in the
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informal sector of the economy.
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He can't get a formal job in the process.
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The people who look after him are his caste community.
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So we are sort of perpetuating, because of the informal market structure, we're perpetuating
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village parochialism and it's sort of entering urban areas.
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And this is very interesting to me because normally when we talk about these subjects
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like labor laws, like not being able to sell agricultural land for non-agricultural purposes,
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we talk of them in the context of how, you know, the lack of economic freedom can get
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in the way of prosperity, you know, economic freedom leading to prosperity.
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But what you're pointing out here is that it's not just about economics.
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They actually exacerbate social divisions by reducing mobility.
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And to me, honestly, I know that the traditional way to think about caste is hegemonic power
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structures and there's a lot of merit in that.
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And I'm very interested in that literature.
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But to me, the caste system is entirely about economic freedom, right?
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So if we have robbed the entire country, especially the most oppressed groups of their economic
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So that's how I think about caste.
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I don't think of it as, oh, there's economic freedom plus plus something else.
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This is a problem that is caused by robbing people of their economic choices.
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And it has obviously gotten worse because they have entrenched the practice over centuries
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and you know, those things are very hard to get out of because they persist so much.
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And in fact, people often sort of give economic freedom a bad name by making fun of trickle
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But as I keep pointing out, economic freedom actually leads to trickle up economics.
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So benefits go first to the bottom.
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And that's clearly not just in an economic sense in terms of money, but also in a social
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sense in terms of empowering people by giving them the mobility to move to a better life.
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Whether you call this an economic choice, a social choice, a caste choice, the fundamental
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point is when you restrict either through the caste system or by the government, when
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you restrict people's choices, you get illiberal societies and oppression.
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When you remove those restrictions, you get liberal societies and prosperity.
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We have seen this happen time and again.
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If you read economic history, there is an additional caste element, which makes India
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a more complex and interesting place.
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But at the core of it, it is an economic freedom argument.
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It is a, I as an individual should be allowed to make my choices and the caste system doesn't
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allow that because it has pre-allotted pretty much my entire life from my occupation to
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my diet to the girl or the boy I'm going to marry, how many kids I'm going to have, what
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language they will speak, everything has been set out for me at birth and it's impossible
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So these are your first three.
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I was sort of going to follow you.
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These were the first two aspects which have made the problem worse.
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I want to address two more, which are a little more complicated.
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So the third is India has not done a very good job of embracing policies that slowly
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and organically allow villages to transform themselves.
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I know in India, there is a lot of romance about villages and village structures.
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A lot of this nonsense comes from the Gandhian idea of villages as self-sufficient republics.
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But the reality of it is villages are cesspools of caste prejudice and horror in India, right?
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Every village you go to is basically a segregated town based on caste.
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It looks like it is based on economic prosperity and wealth, but at the core of it, it's caste
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because if low caste members actually made the money, no upper caste member would allow
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them to build a mansion on their street.
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So villages segregate themselves.
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Now think of the problems attached to this.
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All the public goods in a village and quasi-public goods are also segregated in their use.
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So living in cities, we read stories like a Dalit person beaten for using Brahmin well
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or something horrible like that.
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That's a public good allocation problem, right?
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And the public good allocation problem comes out of the fact that villages are segregated
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Now what do we need to solve this problem?
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We need to make villages transform out of their current structure into a new structure.
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The way India is growing both in terms of population and in terms of economic growth,
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villages should naturally transform into small towns and then slightly bigger towns and then
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a small city and then big metropolitan areas.
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If you think about it, we have the same metropolitan areas in India that we had during colonial
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We don't have too many villages transforming into urban centers.
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We have pre-existing urban centers transforming into bigger urban centers.
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Because we have put in village governments and levels of village governments which are
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not easy to transform from one form to another form.
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So what I was talking about previously when it came to land use restrictions and human
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capital restrictions, now apply that to public goods restrictions, right?
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Public governance is a public good that's provided by the state and the state has made
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it impossible to transform one kind of governance system into another kind of governance system.
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Instead, what it's done is it has reinforced an old parochial kind of government, which
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is a Panchayat-e-Raj institution with a twist of reservations, right?
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But that doesn't solve the problem of how public goods are determined and allocated
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and how we get out of the village segregation system.
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So there is a heartbreaking piece, I mean, not just heartbreaking, it makes you furious.
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Have you read a short essay by Ambedkar called No Pure, No Water?
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Okay, it will make you upset and very mad.
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And this is not just because of my love for Ambedkar, but Ambedkar was, as you know, he
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belonged to the Maha community, which is one of the untouchable groups at the time.
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He was an exceptional student who went and excelled in his school activities, but there
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were times when he wasn't allowed to sit inside a classroom.
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He had to sit outside a classroom and because they would pollute the environment, he had
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to carry like a gunny bag, you know, those round jute sacks.
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He would have to carry his own sack and come and sit outside the classroom to learn and
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One of the bigger problems was access to water.
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Upper caste won't touch water that is used by lower caste.
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So there would be a peon who would show up and pour water from about four feet above
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him so that he does not touch Ambedkar or anyone of that caste.
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And that's how Ambedkar would get access to water.
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If the peon didn't show up that day to school, Ambedkar had to go without water that day
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if he chose to learn, right?
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The fact that Ambedkar did what he did is exceptional.
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We're all grateful he got to write about it and we get to read about it.
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What is horrific is this carries on till present day times.
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And according to me, the only way to break out of the system is to leave the village
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In a village, everyone knows everyone.
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Everyone knows everyone's grandparents.
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Their caste, their family secrets, occupations.
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There is a very clear power structure between families, which was predetermined by caste.
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Sometimes the only way to fix that problem is to exit it, right?
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And villages don't allow easy exit for two, three reasons.
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One, the governance structure is not allowed to change.
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So villages can't transform themselves.
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And we have too few urban areas which are extremely unkind to strangers when they first
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So it's very daunting for someone who is being treated like Ambedkar when it comes to water
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access to leave the village and actually go to the city where you don't know anyone.
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And cities are not very good areas where strangers can just show up and get a job.
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Can I interrupt you for a second and ask you to elaborate on what you mean by governance
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structures not being allowed to change?
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So mainly Panchayat-e-Raj institutions, right?
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What we have done is we have two levels of local government.
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And if you remember, we did a podcast on one of them, which was the urban local bodies
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when we talked about fiscal federalism and their revenue raising authority.
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Their village counterpart is the Panchayat-e-Raj institution.
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Now if you think about this like an economist, the way economic growth takes place, villages
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should automatically convert themselves into smaller towns, bigger towns, bigger cities.
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Which means Panchayat-e-Raj institutions should slowly be able to transform into urban local
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The 73rd and 74th amendment have no provision to convert a Panchayat-e-Raj government into
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So does that mean that when a village gets bigger and it reaches town size, it is still
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by law forced to remain with a structure of governance that is more suitable for a village?
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And more suitable for a village that Gandhi imagined, not Ambedkar imagined, may I add,
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Low-caste have no great romance to do with village structures in a way that high-caste
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Because low-caste can't get water unless the high-caste fume shows up.
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So there's a reason for this romance with village structures.
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We must point out that it's not the low-caste who have this romance.
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It's the upper-caste who, by the way, don't even live in villages.
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And now these groups, mostly upper-caste, have written into law structures, written
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into the constitution, structures that cannot easily transform from one kind of governance
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need to another kind of governance need.
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In fact, there is no way, there is no provision to change from a Panchayat-e-Raj institution
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into an urban local body.
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They fundamentally do the same thing, which is local governance, but their scope of operation
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is actually quite different.
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The way they are elected is quite different, right?
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So this is a very big problem.
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This is not just a problem from a caste point of view.
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It's a problem from a growth point of view.
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But it certainly exacerbates the caste problem because it keeps the village structure alive.
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And I think the Indian village structure just needs to go.
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Like there is just nothing valuable in it to protect it because of the kind of injustice
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that it has perpetuated.
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And this village structure, you're saying, is reflected in the Panchayat-e-Raj system.
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That's why it's a problem, right?
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The only thing that is interesting about the new Panchayat-e-Raj system versus the old
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is that the old one was all upper-caste men.
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The new twist to the Panchayat-e-Raj system is that there are some reservations for lower-caste
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That's literally the only twist, right?
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But even think about it, even with those reservations and things like that, they keep that segregation
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The village is too small a structure to forget, right?
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And what does it need to forget?
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It needs to forget people's past or what they think is people's predestined future.
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The village structure in itself is not able to do that.
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There's too few people, very persistent and entrenched institutions culturally, linguistically
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You can't get rid of those problems without getting rid of the village structure.
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So how do we get rid of the village structure?
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Make it easier for villages to transform or make it easier for people to leave the village.
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We haven't done either very well.
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So that's reason number three that our bad policies keep people trapped in villages and
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rightly by fixing the structure of government to what is an archaic structure of the panchayati
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Raj which encodes the existing social inequalities within itself.
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So the fourth point that I want to get to is a little bit controversial.
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This is the whole reservation system in India, right?
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We have what I like to dub constitutionalized caste.
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And what I mean by that is we have read into constitutional protections and exceptions
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to constitutional protections, certain reservations or secured positions for certain caste groups.
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And that according to me has made the caste problem worse.
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Now at the time of independence, there was a need for upliftment of certain castes.
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We can debate what was the better system of upliftment, but we came down to caste reservations.
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That is what was chosen.
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Now, having said that, everyone, including Ambedkar, who was a champion of this, felt
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that we won't need it for too long, right?
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There are certain provisions in the constitution that were supposed to lapse.
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There were sunset clauses that are supposed to lapse every 10 years unless it's extended.
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And every 10 years there's a constitutional amendment to extend those protections.
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So what has happened is that unlike what Ambedkar imagined, the caste problem has persisted
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for 70 years and it has actually gotten worse.
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So now let me try and unpack this.
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Now I fully understand that I speak from a position of privilege when it comes to any
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kind of educational protection, caste protection, so on and so forth.
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But I still want to unpack this a little bit so that we see what the caste reservation
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system is doing, both to low caste groups and upper caste groups.
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Now if you think about reservations, think about it in terms of a size of an existing
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pie out of which a few slices are pre-allotted to certain groups.
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Now most of these are admissions in educational institutions and reservations in government
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That is really the core of what's going on.
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So what does this mean in terms of making caste problems better or worse?
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Now if you think of a certain society where the size of the pie is not growing, such as
#
a socialist society, India with its Hindu rate of growth and so on and so forth, if
#
the pie is not growing, more and more people become extremely agitated and start hating
#
the idea of certain groups getting a few slices of the particular pie.
#
Other groups also want that protection.
#
They also want certain slices of the pie completely reserved for them.
#
Unfortunately, unless the size of the pie grows, each additional group that gets that
#
protection or a pre-allotted slice of the pie is going to reduce the allotment of every
#
So if there are 20% of the seeds pre-allotted to particular groups and more groups want
#
that protection, either we increase the 20% limit or you're encroaching from other groups.
#
Now what is the problem with this?
#
The problem is originally it started out as a protection for the most historically oppressed
#
As the republic aged, we have included more and more groups and now there are a lot of
#
relatively upper-caste groups that have nothing to do with historical oppression that want
#
the same reservation or protection allotted to them.
#
An example of this is the patidas or the kapus.
#
They are not historically oppressed, but they feel they have a grouse given the current
#
system where they're educated, land-owning class, but they can't find jobs.
#
So they need some protection, which is government protection.
#
They want the existing number of government jobs to be reallotted.
#
They want the lines redrawn so that they are included in it.
#
Now this causes a problem with historically oppressed groups because they feel that there
#
are new upper-caste groups who are encroaching on what was originally promised to them.
#
This is a very big source of tension in India.
#
So the original classification of scheduled castes, scheduled tribes and other backward
#
classes has more and more groups being included in it and more and more groups agitating to
#
be included in it almost on a daily basis.
#
So you see Gujar agitations, you see Kapu agitations.
#
The most recent is the patidar agitation, which has taken a new political place, the
#
Marathas in Maharashtra and all the land-owning castes like you pointed out because the size
#
of their land with each generation shrinks.
#
So now think about this.
#
You have a fixed size of the pie.
#
More and more people want the protection because it gives you a job without doing anything
#
It gives you, promises you certain benefits, promotions, so on and so forth.
#
However, each additional group that gets included in the protection means two things.
#
Christian groups' protection is less valuable and sometimes just less because the pie is
#
And second is the general category, which is the erstwhile upper caste, the non-oppressed
#
groups, rather the oppressors are not included in this protection and many of them are poor.
#
They're economically poor, even if they aren't socially poor.
#
So now there is new agitations where there is even more hatred or some sense of disagreement
#
between those caste groups and the new caste groups.
#
If you notice, what is happening in India is before 1950, that is before reservations,
#
I've heard these stories from great-grandparents who just tend to be politically incorrect
#
and extremely prejudiced, but they would talk about certain caste groups as trying to mimic
#
That is, previously oppressed groups were desperate to exit their situation.
#
The Mahars are a great example of exiting the parochial village structure and joining
#
There were other groups all over India which tried to exit that parochial structure and
#
I'm using these words in a highly contextual way.
#
They thought they were moving up in the social and the caste ladder.
#
Now what you see in present-day India is the exact reverse of that.
#
Someone who is born in the lower caste or, you know, previously lower caste, scheduled
#
caste, scheduled tribes, they want to hold on to that.
#
That identity means everything to them.
#
That identity at the time of birth, if they don't put it on their birth certificate, if
#
they don't have the right last name or they don't have their community vouching for their
#
caste, they're not going to get the reservation protection, which means we want to hold on
#
to that caste identity.
#
How do you break down caste?
#
You need individuals to be incentivized to leave their caste identity.
#
What we have done is constitutionalize the problem.
#
We have incentivized groups to hold on stronger than ever before to that caste identity because
#
that is what gets them the benefit.
#
So now this is in no way taking away from the fact that Dalit groups have been oppressed
#
and they may feel that there is a particular rightly justified reason why they need greater
#
social protection, so on and so forth.
#
I'm not arguing against how they feel about it.
#
What I'm arguing against is the Ambedkar idea.
#
Ambedkar thought caste would disappear.
#
How does caste disappear?
#
Individuals from different castes decided to shed their caste identity and move on to
#
And the constitution disincentivizes you to do that.
#
It incentivizes people to hold on to that identity and hold on to that community.
#
That I find extremely problematic.
#
A liberal market economy will make you want to shed your caste, change your name, move
#
to a new place where the parochial structure doesn't shackle you.
#
What we're doing is the exact reverse of that.
#
Now this is not to say that certain castes don't have an emotional attachment to their
#
networks or their community, that they don't have any respect for shared history.
#
You may want to hold on to it just because we've just seen a protest which started with
#
a 200 year old battle, right?
#
So there may be reasons, emotional reasons to hold on to a historical issue or your identity.
#
I'm not talking about those reasons.
#
I'm talking about the practical economic reasons we have managed to disincentivize people to
#
exit their caste at birth, which I think is very, very problematic.
#
And what I've always found perverse just at a philosophical level is that if we all agree
#
as we surely do that discriminating on the basis of caste is wrong, what are reservations?
#
They are discrimination on the basis of caste.
#
They perpetuate the ill feeling between castes.
#
How can that be a solution?
#
Well, the way we have reservations presently is no solution at all.
#
There are two big problems with it and a lot of Dalit groups and Dalit scholars also agree.
#
The problem being that it's only the upper cream of Dalit groups who get the benefits.
#
To actually get access or protections from these reservations, you need to have completed
#
You need to go from K through 12, actually have your higher school certificate to be
#
able to sit for exams or to gain admissions in these elite institutions.
#
Most of the parochial village structure does not allow Dalit children to be educated properly.
#
So what are we talking about?
#
We're now talking about Dalits who manage to exit the parochial system and who can actually
#
get the benefit as opposed to the people it was originally intended for.
#
Let's also acknowledge that there is now a division even within the historically oppressed
#
groups and Dalit communities where a certain portion of that group which is already well
#
off is gaining a lot of those benefits while the historically oppressed just remain oppressed
#
for the various reasons that I mentioned, which is the shackling of the physical capital,
#
human capital, village system, so on and so forth.
#
In fact, so the benefits of reservations even for Dalits really go to the privileged outliers
#
among the Dalits to begin with?
#
There's a lot of constitutional jurisprudence on this with respect to how do you treat the
#
creamy layer, which is mainly the well-off layer of the group that's already received
#
the privileges or the benefits amongst the other backward castes.
#
So there is a lot of politics and jurisprudence from the highest courts and the Supreme Court
#
So this is not a new problem.
#
We know that this problem exists.
#
So the first part of the reservation problem is it actually doesn't go to the people that
#
it was really intended to go to in terms of how Ambedkar thought about the problem.
#
The other framers supported this idea.
#
The second part of it, as you mentioned, is it makes caste tensions worse because it makes
#
everyone hold on to an identity.
#
And then there is only a certain fixed size of the pie.
#
Each group getting a little bigger or smaller size is going to take away from another group
#
or get to another group.
#
That causes a lot of tensions.
#
And on this matter, the Dalit groups are absolutely right in the sense that these reservations,
#
whether you believe in them or not, were introduced to uplift the historically oppressed.
#
A lot of the groups asking for these protections today are not historically oppressed.
#
They are just oppressed in the modern socialist system because they can't get jobs.
#
That's their modern day oppression.
#
So there is a genuine reason for the kind of tensions that have bubbled up because the
#
original promises made to certain groups, whether you agree with them or not, have not
#
So before we move on from here, let me just try and sum up the four points you made so
#
far and tell me if that's accurate.
#
The first thing the government did wrong was in setting policies which reduced economic
#
freedom and therefore, number one, it reduced mobility of resources.
#
For example, you can't sell agricultural land for non-agricultural purposes and therefore
#
you're trapped in that sense.
#
Number two, it reduced mobility of labor because the labor laws meant that there was a very
#
large informal sector and what there was of the formal sector, people would tend to choose
#
from among their relatives or their castes, therefore perpetuating the power imbalances
#
The third problem was that village governance structures were kept as they are constitutionally
#
so they weren't allowed to change even if the village grew bigger and could have become
#
a town and those imbalances again in those segregated villages were reflected and ossified
#
within those Panchayati Raj structures.
#
And the fourth point being that the system of reservations which was laid out with good
#
intentions and championed early on by Ambedkar went wrong in a number of different ways.
#
Number one, the benefits would tend to go to the already privileged people among the
#
caste that they were supposed to go to to begin with the most oppressed of the lot.
#
Number two, they expanded to include various other castes and sub-castes.
#
Number three, the pie remained fixed but the demand increased whereas the supply didn't
#
and that led to greater conflict and all of this conflict was framed in terms of caste
#
identity. As castes which would earlier back in the day they would mimic up now began to
#
mimic down because of the juicy lollipop of government jobs and government seats in educational
#
institutions and caste tensions actually became worse because of all this.
#
Is that kind of accurate or have I left something out?
#
I would just add an element to this which is at the core of it, all four issues you
#
identify are incentive problems.
#
We are disincentivizing groups to leave the village, we are disincentivizing groups to
#
convert certain types of physical capital to other uses or human capital to other uses
#
and the biggest disincentive that we have in the current system is the incentive for
#
individuals and groups to shed their caste identity to just completely destroy the caste
#
We are actually doing the opposite, the incentive is very much to protect their caste identity
#
and to actually make the caste system stronger just in a new political format.
#
So I think at the core of all four issues I want to highlight it is an incentive problem
#
and that I think there is very little recognition of thinking about the caste problem in that
#
So my follow up question then there is that again putting your economics hat on what would
#
What is the way out of this terrible mess that we are in?
#
The first thing we need to do is acknowledge that outside any state intervention or state
#
exacerbation people need to change and the upper castes and elites in India have just
#
been appalling in the kind of prejudice and bigotry that they have displayed.
#
So it's simple things which are actually very big things like making sure that your household
#
help can use your restroom or gets access to water, the same water sources you do even
#
though you live in a fancy lovely urban flat in Delhi or Bombay.
#
These problems persist and there is no way out of it except for people to change their
#
minds and correct their behavior.
#
So the question that you are really asking is what can the state do?
#
We know what people can do, they can become better behaved.
#
So what can the state do?
#
So again I would identify four areas where state positive and negative action can I think
#
improve the situation and what I mean by improve the situation is there is nothing the state
#
can really do to make the caste system go away.
#
What it can do is create better incentives so that individuals organically leave a particularly
#
So let me start with the first point.
#
The first is that the state just needs to get out of the way when it comes to restrictions
#
on physical and human capital.
#
It needs to liberalize the economy and that liberalization must start at the lowest most
#
basic level at the village and then move up to labor law reforms which are really more
#
of an urban problem which also affect the village.
#
So getting out of the way that is removing or lifting restrictions on agriculture, removing
#
and lifting restrictions on hiring and firing of people in manufacturing units, all those
#
things the state can do, it should do.
#
We know that the socialist licensing restrictive economy is making the caste problem worse.
#
So even though removing those restrictions won't lead to the caste system going away
#
overnight, it will not make it worse, it will make it easier for people to exit a particular
#
So that is the very first thing.
#
Now in this Amit, you can add a laundry list of all the restrictions that need to be removed.
#
You've actually done a great job without talking about caste on the kind of restrictions that
#
need to be lifted in all your previous episodes.
#
So you know, pick a bouquet of those restrictions and that's the first thing to do.
#
Basically anything that increases economic freedom and thereby increases social mobility.
#
I couldn't have worded it better.
#
The second point is positive action on the part of the state and by positive action,
#
I mean the basic task of the state, which is to provide public goods and services.
#
It's things like sewage, roads, you know, any public amenities.
#
So think about something like sewage.
#
Now sewage is a classic public good in the sense that there's a collective action problem
#
that needs to be overcome.
#
Now think about sewage and the sewage system and the caste politics in India.
#
As you know, there are Dalit groups that were untouchable because they were segregated into
#
an occupation that we now politely call manual scavenging.
#
Manual scavenging is essentially there were certain groups and this was their job by birth.
#
They were supposed to come and clean out the latrines of the upper caste homes.
#
They were never allowed into the house.
#
I mean, nowhere close to the vicinity of the house, they had to come in through the back
#
door, clean out those latrines, pick up human excreta in their hands, put it on their head
#
and walk to the next home, do the same and then bury it somewhere in a land cell.
#
There was a caste that was told to do this job.
#
Now because they dealt with human waste, the upper caste insisted that they can't touch
#
the water source and so on and so forth and they would contaminate it.
#
This obviously persisted, got worse, got more entrenched and they became untouchables, not
#
allowed to live in the village, had to live outside, but provided the most crucial service
#
that you need in a village environment.
#
Now think about how public goods provisioning can make this problem better.
#
So I recently read a book, this is a bit of a tangent, but it's crucial to this point
#
called Where India Goes.
#
Based by Dianne Coffey and Dean Spears, it's an excellent book.
#
It basically talks about the open defecation problem in India and it talks about how there
#
are many countries that are poorer than India, but that don't defecate in the open because
#
actually latrines are not that difficult to build or access and even low levels of income,
#
one of the first few things people do in countries like Nigeria is that they get access to a
#
In India, the government has been building latrines for people and they won't use them.
#
They use them as storage units, children's playgrounds, washing areas, they don't use
#
them for their given use, they actually go out in the open.
#
It's because of caste and ritual purity.
#
Upper castes will not clean out a latrine with their own hands because these are not
#
connected to a sewage system, so it's not like your bathroom and mine where we just
#
flush and all the unpleasant stuff just goes away.
#
You need to manually pump out the latrine or clean it by hand and upper castes just
#
refuse to deal with human excretion, even their own and their own families, which means
#
that they will still continue to go out in the open, which means that now we are persisting
#
a particular occupation of manual scavenging.
#
We made it bigger than ever before because of population growth.
#
In UP, this problem is worse than it was even 20, 30 years ago because of the numbers that
#
are at play and this group has to continue doing this job and it has no choice.
#
Because it deals with human filth, there is even greater oppression even in modern day
#
when you have every kind of hygiene access that you can possibly think of, except you
#
don't have it in the villages.
#
The book I was talking about was talking about open defecation and how it's increasing infant
#
mortality and killing our children, but the part that I found interesting, even though
#
the book is not suggesting as this kind of magic bullet solution, the part that I find
#
interesting is upper castes will embrace toilets as long as it's connected to a sewage system.
#
They won't transition slowly from open defecation into latrines that need to be pumped or cleaned
#
manually into a sewage system.
#
So what does the government need to do?
#
Instead of giving subsidies through Swachh Bharat Abhiyan to have toilets everywhere
#
and photo ops, it needs to dig up towns and villages and provide the sewage system.
#
That is very difficult to do.
#
It's not very profitable for anyone to do that.
#
The benefits are very far in the future and all the costs are today because you're going
#
to dig up entire towns today.
#
So nobody wants to build or increase the capacity of the sewage systems.
#
So in India, we have no functional sewage system and despite economic growth, we continue
#
to go out in the open and oppress castes into doing terrible jobs and then treating them
#
badly for doing those jobs well.
#
So this I would highlight as an example of better public goods provisioning like sewage
#
system, like water sources will actually make the caste problem better.
#
It will reduce segregation.
#
It will actually improve the lot of certain groups which are not just historically oppressed,
#
but also oppressed in present day.
#
And the very fact that sewage systems haven't been made so far in such large parts of the
#
country also have something to do with structures of local governance and the kind of incentives
#
So it's like a vicious circle that affects everything.
#
Well, I don't think it's a vicious circle in the sense that one perpetuates the other.
#
I think it's a it's a fundamental problem.
#
If you solve the fundamental problem, all the other problems will automatically start
#
It's a constitutional problem of giving groups benefits, but through reservations, even at
#
the local governance level and not giving them responsibilities and revenue raising
#
I mean, there is a constitutional solution to all these problems.
#
I don't think of it as a vicious circle in that one problem perpetuates the next and
#
then it comes back to the beginning.
#
I meant it as a vicious circle in the sense that our structures of local governance are
#
And yet the only people who can actually do something about it are those who benefit from
#
So how do you get past that?
#
There I do agree with you.
#
So it's very difficult to get past that.
#
The sewage system is a particularly sticky public choice problem because, you know, all
#
the benefits are dispersed, which is everyone will benefit from a better sewage system.
#
All the costs are concentrated, which means your existing corporator or the panchayati
#
Raj powers that be will bear the cost because everyone abuses government when they dig everything
#
It takes years to build a functional sewage system.
#
So everyone's abusing people when they're digging up and imposing costs in the present.
#
The benefits are far in the future and extremely dispersed.
#
So there is a fundamental public choice problem that needs to be overcome.
#
I would actually applaud the prime minister if his Swachh Bharat Abhiyan meant actually
#
building a sewage network underground as opposed to just building a shed with a manual battery.
#
That's what's happening right now.
#
But that doesn't give opportunity for so many photo ops.
#
So you know, what do you do?
#
Well, I don't want to talk about his incentive so much.
#
It could just be that there are certain people who haven't thought about the problem from
#
So giving everyone the benefit of the doubt and let's assume that they have the best of
#
We know that latrines don't solve the problem in India without a sewage system connected
#
to it because we have a horrific caste system that is attached to this problem in the villages
#
that just refuses to go away.
#
We talked about why it's persisting.
#
It's not going to disappear when it comes to personal hygiene and Swachh Bharat.
#
So if it persists in all other aspects of life, it's persisting here.
#
So if we want to solve the problem, we need to deal with the caste aspect of the problem.
#
And even though I don't condone all this ritual purity nonsense of the upper caste, we've
#
got to acknowledge that it exists and find a policy solution around it so that we can
#
improve on two factors.
#
One is infant mortality and the second is remove oppression of untouchable groups that
#
are till present day treated as untouchables because they do very important functions that
#
are considered menial and filthy and impure.
#
If you can't change their mindset, build them a sewage system.
#
What's your next point on what the government can do?
#
So the first part was get out of the way.
#
The second is actually do your job, right?
#
Build public goods and services that you were supposed to build.
#
The third one, I want to go a little bit out on a limb here.
#
Now, if you remember when we were talking about the problems of the village system,
#
we talked about how the village system is highly segregated and this segregation extends
#
depending on how bad or awful the village is or how bad the past problem is, it extends
#
from land use to water use to schooling.
#
So let's say it's a relatively small village and there are only one or two schools in that
#
Government schools at the moment.
#
And they cater to about 50 students each.
#
If there's only one school in the village because of caste problems, lower caste children
#
are forced to sit outside or forced to sit on the floor, not given access to water.
#
The young girls are not allowed to use the same restrooms as the other girls of upper
#
So there is a personal hygiene issue.
#
These are really big problems.
#
We want to make it easier for children to attend school, not make it harder.
#
One part of the easier is, you know, right to education and all the good intentions and
#
providing free education compulsory, blah, blah, blah.
#
The other part of it is removing all the everyday roadblocks.
#
I mean, Abedkar is an exceptional human being who was able to get through that kind of caste
#
prejudice and still managed to get an education.
#
Most students might give up.
#
Most parents of young girls may not send their daughters to school if they can't get access
#
to a restroom post puberty.
#
These are really basic, important problems that we have not found a solution for.
#
So the third suggestion I'm going to give is the school voucher system.
#
Now this benefits everybody, but I think it will really empower historically oppressed
#
groups, especially in the villages.
#
What a voucher system does is it empowers the parent and the student as opposed to the
#
Now think about a village structure.
#
The school is going to reflect the power structure of the village and we know that the historically
#
educated castes are all upper caste, not to say you can't have a Dalit school teacher.
#
We have many, many, many excellent Dalit school teachers, but there is the same hegemonic
#
structure in the rest of the village will partially limit itself at the school.
#
It means if a school is run by awful upper caste elites who oppress lower caste, lower
#
caste are less likely to go down.
#
What is the exit option?
#
So the school voucher system can actually give these students an exit option.
#
If you don't like the fact that a particular school will not allow you to use the restroom
#
or the peon will pour water from four feet above, or you can't share the same water jug
#
as your classmates, upper caste classmates, you can exit the system.
#
The voucher system will empower the poorest, most oppressed groups by giving them the ability
#
to vote with their feet.
#
We don't have that ability right now.
#
So even though I think we should introduce this whole voucher system everywhere, right?
#
Not just to solve caste problems in India, this is a problem in urban areas, it's a problem
#
So even though I think the voucher system actually has a lot of benefits in terms of
#
educational outcomes, it empowers students and parents instead of teachers unions, I
#
think it will have a particularly big impact on solving the caste problem or at least mitigating
#
it because most lower caste students are not able to get an education that will even help
#
them get the reserved jobs.
#
The only way to provide that education is through better schooling, which at present
#
is private schooling or competitive public schooling.
#
That situation is solved only by a voucher system, no other.
#
And you know, I've been writing about school vouchers for almost 15 years, as you know,
#
and this is the first time I've actually thought about it in the context of caste.
#
You always think about it in the context of economics or education or whatever.
#
But you know, here it is, could play a part in making society function better.
#
I don't think I've read all your pieces on school voucher system and I don't think what
#
you're saying is tangential or contradictory to the caste problem.
#
It's just that the caste problem is the core of the problem as it drops people of choices
#
and makes exit very difficult, right?
#
School voucher solves both of those problems.
#
So it's going to solve those problems, whether there's a caste problem or not.
#
If there is a caste problem, it is even more empowering.
#
I think it fits very well with what you've been working on.
#
I mean, school vouchers empower parents with choice and any kind of empowerment obviously
#
What's your fourth point on what the government could do?
#
The fourth point is the hardest to solve and it can't be solved.
#
The fourth point is that this kind of constitutionalization of caste needs to go.
#
So part of it was done by the Mandal judgment, which just in brief, what that particular
#
Supreme Court judgment did was it said, look, there are various castes which are all lobbying
#
for different kinds of benefits, you know, with good and bad reasons.
#
Some were genuinely historically stressed, some are new groups that are trying to get
#
However, all reservation must be capped at 49.5%.
#
So there was a particular number which came to 22.5% for scheduled castes and scheduled
#
tribes and then 27% for other backward classes.
#
It needs to stop at 49.5%, there will be no more.
#
Now this is really interesting.
#
This was already, the Mandal judgment read in more than what the original constitution
#
The constitution never gave a certain number and it never imposed a particular limit.
#
It just told you what groups and what percentages.
#
So what the Mandal judgment did is both expanded the reservation policy and at the same time
#
constrained the government by capping it at 49.5%.
#
Now what has happened since the Mandal judgment?
#
More and more groups want to be included.
#
They understand that if they are included within the 49.5%, they're going to rob other
#
groups of their privileges.
#
So what are they trying to do?
#
In every state there is a group lobbying to get an exemption to the Mandal situation by
#
adding their particular reservation policy in a particular constitutional framework called
#
The ninth schedule, just again very briefly, provides a constitutional vehicle to protect
#
the laws from judicial review, even if it violates the fundamental rights chapter of
#
So what that means is if you want an exception from any of the fundamental rights currently
#
at work, and you usually want an exception because the court has shut it down, you use
#
I wrote about this extensively for your magazine and Pravati on land reform issues.
#
One interesting thing about the ninth schedule vehicle is that reservation policy had made
#
So Tamil Nadu law, the reservation policy, completely goes well above 49.5%.
#
I think it went to 69% in the first shot and then somewhere in the 80s after that.
#
So they got an exemption to Tamil Nadu law by adding it in the ninth schedule.
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If you read the newspaper and do a quick search for the ninth schedule, what you will observe
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is groups like Parivaraj, Saptham, Gujarat, Jats, not Gujarat, I think just Jats and Haryana,
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each one of them is lobbying for legislation to be passed that they know is unconstitutional
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in the current framework and then lobbying that their state government lobbies the central
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government to add these to the ninth schedule using a constitution amendment to increase
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the reservation of their state above 29.5%.
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So what we have done in this complicated story is we have constitutionalized caste.
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Even when the court says it's unconstitutional, there is a way around the problem, it is to
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keep fixing and tweaking the rules and the limits.
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The way the current problem is being solved is if there is a group which becomes a vote
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bank by unifying like the party guards or the kapus, they unify, they agitate together,
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they form a vote bank, they try to lobby and get what they want through the caste reservation
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So this is a really big problem.
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Now when I say this needs to go, I unfortunately don't have a good solution for it.
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You know a lot of public choice, so you know that there is this problem of the transitional
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gains trap, which is we all know that exiting the existing system and going to the new system
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will be more efficient, but making that transition is going to create some winners and losers.
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All the losers in that transitional system are going to do their best to hold on to their
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I mean given the nature of our democracy and the fact that all our politics is essentially
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identity politics, this is again a vicious circle, it's pretty much impossible to solve.
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This is very difficult to solve and I think the only way around it, I don't want to keep
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sounding like this free market messiah, but liberalizing the economy is the only way.
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We need to create job opportunities for these groups which are actually better than what
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the government is promising.
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That is the only way to get out of this trap.
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Now there's very little incentive for politicians to do that because how else will they get
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You want to keep the people educated and oppressed so that you can promise them benefits.
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So there is a disincentive for politicians to fix this problem, but liberalizing the
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economy and creating more jobs is pretty much the only way to go.
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We've seen that not liberalizing the economy is actually making the problem worse.
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Upper-caste groups now want protections.
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So where do you go from there?
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So the only way around this problem is to create jobs that are better than the reserved
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ones, like the one you have or the one I have.
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We have exited the system to a better opportunity, we're not actually the existing opportunity.
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I completely acknowledge that we're a privileged lot, but we need to find a market system that
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offers everyone those privileges and protections.
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The only way to do that is to create a larger pie that everyone can share in and the only
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way to do that is economic growth through liberalization.
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I couldn't agree with you more.
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I think if we empower enough individuals and change their incentives to think beyond the
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caste system, then the incentives for politicians in the political marketplace also change.
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That's really, that's our only hope in the long term.
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Shruti, thanks so much for your time.
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I've learned a lot today.
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It was great having you on the show.
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It was great fun speaking with you.
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If you enjoyed this show, head on over to sceneunseen.in for all previous episodes of
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The Scene and The Unseen, which include a few with Shruti as my guest.
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You can follow Shruti on Twitter at srajgopalan and you can follow me at Amit Verma, A-M-I-T-B-A-R-M-A.
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This podcast is produced in partnership with IVM Podcasts and I'd encourage you to check
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out more podcasts by them by downloading the IVM Podcasts app or by following them on Twitter
#
If you enjoyed listening to The Scene and The Unseen, check out another show by IVM
#
Podcasts, Simplified, which is hosted by my good friends, Naren, Chuck and Sriketh.
#
You can download it on any podcasting network.
#
There she stands, a podcast addict, outside the bank, having travelled several miles to
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get in with other poor souls like her.
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The journey, though daunting for this youngling, will have some comfort because she has downloaded
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You can see more of her species on IVM Podcasts dot com.
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