Can reservations pull Bihar out of poverty?

On Tuesday the Bihar government presented detailed findings of the socio-economic aspects of its caste survey in the state assembly. Chief minister Nitish Kumar, concluding the debate in the assembly, announced that his government would recommend extending reservations for Other Backward Classes (OBCs), Scheduled Caste (SC) and Scheduled Tribe (ST) population to 65%. With the 10% reservation for economically weaker sections among the non SC-ST-OBC population, the quantum of reservations in educational institutions and government jobs will increase to 75% in Bihar. Whether or not this will be done and this will it pass judicial muster is a question best left to the future. However, it is to be expected that the announcement will have a big political impact.

Also Read: Decoding findings of Bihar's caste survey report

What is interesting is the fact that a lot of data presented show that Bihar will have to do a lot more than reserve more seats in colleges and more jobs to pull itself out of poverty. In fact, data shows that what Bihar needs desperately is private capital. The numbers speak for themselves.

The share of the workforce which is employed in the government sector in Bihar is just 4.8% . An increase or decrease in reservations can only alter the social distribution of these jobs in the state. What really stands out in Bihar’s case is the fact that a smaller part of its workforce is engaged in organised private employment rather than government employment. A large part of the workforce in the state is also engaged in either farming or blue-collared non-farm jobs such as masonry or daily wage work.

The above trends do not change much for different social groups. Some groups are only relatively better off than others. 90%-95% of workers among Backward Classes (BCs), Extremely Backward Classes (EBCs), Scheduled Castes (SC), and Scheduled Tribes (ST) are outside government employment or organised private sector employment. This number decreases to only 80% for those who do not belong to these groups.

Also Read: Bihar will bring bill to hike quota to 75%, says Nitish Kumar after caste survey

While one cannot compare the numbers given in the Bihar caste survey report with other states, data from the periodic labour force survey (PLFS) shows that Bihar is among the worst when it comes to share of better jobs among India’s larger states. The share of salaried or regular wage workers – the highest paid among different types of workers in the PLFS – was 8.6% in Bihar in the 2022-23 PLFS, the lowest among all large states. The median share of regular wage workers across 21 large states is 22.7%.