Education determines income levels, not caste: Will Netas accept the reality?

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Updated: February 12, 2019 7:10:05 AM

The truth that most politicians are choosing to ignore, however, is that caste is no longer the determining factor of family well-being that it once was; indeed, the impact of caste is probably weakening as economic growth—and the opportunity associated with it—is rising.

Education determines income levels, not caste: Will Netas accept the reality beyond vote-banks?

Thanks to prime minister Narendra Modi’s decision to implement a 10% quota for the upper-castes, subject to their incomes being Rs 8 lakh a year, as well as his plan to sub-categorise the OBC quota into that for various caste groups—this will prevent OBC quotas from being cornered by a few powerful castes—caste tensions have got a fresh fillip on the eve of the elections. The truth that most politicians are choosing to ignore, however, is that caste is no longer the determining factor of family well-being that it once was; indeed, the impact of caste is probably weakening as economic growth—and the opportunity associated with it—is rising.

Data from the People’s Research on India’s Consumer Economy (PRICE)’s latest all-India survey in 2015-16 confirms this trend that was first visible in the household income survey done by NCAER in 2004-05. NCAER’s survey that tracked households by their caste as well as other characteristics found that family incomes were determined more by their educational background, by whether they were located in big or small cities, in high- or low-growth states, etc, than by their caste background. The PRICE survey of 2015-16 shows this trend has only strengthened. To begin with, the PRICE survey shows every caste group is better off in 2015-16 except for upper castes. So, the income of SC households (bit.ly/2SA6Vn5) was 89% of the all-India average in 2015-16 as compared to 71% in 2004-05; the same numbers were 84% and 63% for ST and 98% and 92% for OBCs but for upper castes, the numbers were 120% and 133%. Some will argue that while there has been an increase in the relative incomes of SC/ST/OBC households, this was the result of the policy of reservations in educational institutions as well as in government jobs.

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This does not hold, however, for two reasons. Apart from the fact that government jobs are a small fraction of all jobs in the country, the fact is that income levels for SC/ST/OBC families are rising faster in high-growth states as compared to low-growth states; had caste groupings been the main determining factor, this would not have been the case. To take the case of SC households, for instance, their relative incomes grew much faster in Kerala (a high-growth state) as compared to, say, Uttar Pradesh (a low-growth state). The ratio of FY16 to FY05 incomes for SC families was 6.3 in Kerala versus just 3.7 in Uttar Pradesh; in the case of OBC households, FY16/FY05 incomes in Kerala were 4.8 versus just 3.1 in Uttar Pradesh. In absolute terms, in 2015-16, incomes for households headed by illiterates were Rs 90,285 for SCs and this wasn’t too different from the Rs 93,756 when the house was headed by an upper caste. But when an SC household was headed by a graduate or above, the income rose Rs 303,680, or 3.36 times. It is true that an upper caste household headed by a graduate earned more, at Rs 372,303, but this is less important given the sharp increase in the SC income levels.

Another study using NSS data finds that if a parent in rural India had studied till just Class V—this includes illiterates—there was a 58% chance his child also studied till this level in 1983; this fell to just 29% by 2009-10. And while there was a 1% chance the child of such a parent could have passed Class XII in 1983, this rose to 14% by 2009-10. In other words, with reservations now there for around 70 years, there is no reason to continue with them since, with time, the spread of education has risen manifold. It is unreasonable to expect politicians to rein in reservations at election time, but sooner rather than later, someone needs to examine what the data is telling us.

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