What is the Indian Reservation System?

Let's look into India's reservation system.

-Understanding the Reality of Hiring in India Through Caste, OBC, and EWS- In South Korea, civil service exams were once one of the most preferred career paths for young people. Competition ratios of tens to one were common in national and local government exams, and the term "Gongshi Phenomenon" (civil service exam fever) was a major social topic. Recently, however, due to demographic changes and a growing preference for private companies, South Korea rarely sees such extreme competition anymore. In India, on the other hand, the reality is entirely different. In 2025, over 12.16 million applicants competed for approximately 11,558 openings in the Indian Railways (RRB NTPC) recruitment process. The average competition ratio easily exceeded 1,000 to 1, with competition for certain preferred job roles being even fiercer. Behind this overwhelming competition lies a key concept essential for understanding Indian society and its labor market: "Reservation" (an affirmative action system). In India, approximately 59.5% of posts in central government public recruitment and admissions to public educational institutions are reserved for specific socio-economic categories. ♣ [Note] Why "Reservation" instead of "Quota"? Rather than using the term "Quota," which simply refers to setting aside numerical slots, India uses the term "Reservation" in its constitutional text. This reflects a constitutional and historical justification: for historically marginalized communities, the state pre-allocates ("reserves") places in advance to guarantee their rights. 1. Why India Chose Reservation: Independence, the Constitution, and a 10-Year Promise India’s reservation system was created to legally address the extreme inequalities stemming from a hereditary caste system that persisted for thousands of years. The nation recognized that simply declaring equality before the law was insufficient to uplift communities long excluded from social and economic opportunities. Independence and the Constitution (1950): Spearheaded by Dr. B.R. Ambedkar —a Dalit legal scholar and the father of the Indian Constitution— public sector reservations were explicitly written into the 1950 Constitution. Prohibition of Discrimination and the Paradoxical Reservation System: Articles 15 and 17 of the Indian Constitution strictly prohibit discrimination based on caste and explicitly declare "Untouchability" unconstitutional. Paradoxically, because the historical consequences of discrimination remained embedded in the socio-economic structure, the state maintains a reservation system to protect designated categories through official administration lists. Was it originally a temporary 10-year measure?: Initially, political seat reservations for Scheduled Castes (SC) and Scheduled Tribes (ST) were designed as a temporary 10-year provision. However, because social inequality was not fully eradicated—and due to aligned political interests—the provision has been extended multiple times. Political reservations for SC and ST are currently extended until 2030. 2. The Four Categories to Understand: SC, ST, OBC, and Unreserved The Indian administrative system categorizes society into four primary groups. An individual can only be registered under one official category, and overlapping benefits are strictly prohibited. Category Official Name Characteristics Central Reservation Quota SC Scheduled Castes Communities that historically faced the most severe social discrimination and marginalization. Commonly referred to in relation to the Dalit community. 15% ST Scheduled Tribes Indigenous tribal populations residing primarily in hilly and remote areas. Referred to in Sanskrit as Adivasi ("original inhabitants"). 7.5% OBC Other Backward Classes Communities that were not classified as untouchables, but remain socially and educationally backward middle castes and laboring classes. 27% General Unreserved / Open Category All general applicants who do not fall into the SC, ST, or OBC reservation categories. No Quota (Open Competition) ♣ [Note] The Northeast Region (ST) Special Provisions and Autonomy Northeast states (such as Nagaland, Mizoram, and Meghalaya) have populations predominantly composed of Scheduled Tribes (Adivasis). To protect the autonomy and land ownership rights of these indigenous communities, the Constitution of India incorporates the Fifth & Sixth Schedules and Special Article 371 . Consequently, land ownership by outsiders is restricted, establishing an administrative framework distinct from mainland India. 3. The Mandal Commission and the Rise of OBCs While initial reservations focused primarily on SCs and STs, a major turning point occurred through the 1970s and 1980s. 1979 Mandal Commission: The Government of India established the Mandal Commission to identify socially and educationally backward classes. The commission estimated that over half of India’s population (approx. 52%) belonged to backward classes and recommended reserving 27% of public posts for Other Backward Classes (OBCs). 1990 Implementation: When the V.P. Singh government implemented the Mandal Commission recommendations in 1990 , it sparked massive student protests and violent social conflict across the country. This event remains a defining moment in modern Indian politics. 4. The 50% Cap and Regional Exceptions 1992 Indra Sawhney Judgment: Following legal challenges to the Mandal Commission report, the Supreme Court of India established the rule that total reservation quotas should not exceed 50% under normal circumstances. Regional Exceptions to the Cap: Because India is a federal union, state-level historical and political conditions have created exceptions: Tamil Nadu: Maintains a total reservation quota of around 69% protected through state legislation and constitutional schedules. Maharashtra and Recent Trends: Prominent political and economic groups like the Marathas have staged large-scale demonstrations demanding inclusion under reservation categories, making state-level quota expansion an ongoing social conflict. 5. The Introduction of EWS (10%) and its 1-Year Validity In 2019, through a constitutional amendment, the Indian government introduced a 10% reservation for Economically Weaker Sections (EWS) among the General/Unreserved category who were not covered under SC, ST, or OBC quotas. Legal Significance: The Supreme Court upheld EWS reservation as a separate track outside the original 50% ceiling, bringing the central government's total combined reservation cap to 59.5%. 1-Year Renewal Rule: Unlike SC/ST status, which is permanent based on identity, EWS eligibility requires verification of household income (less than ₹800,000 per year) and assets. Applicants must obtain a new Income & Asset Certificate every year, as EWS status operates on a 1-year validity framework. 6. Where Does Reservation Apply? (Public vs. Private) Public Sector (Applicable): Reservation is strictly enforced in central and state government jobs, admissions to public higher education institutions (IITs, IIMs, AIIMS, etc.), and elected political seats (reserved constituencies for SC/ST). Private Sector (Not Applicable): Private companies, multinational corporations (MNCs), and IT firms are not legally bound by reservation mandates. Private firms recruit based on merit and performance. However, corporate commitments to ESG (Environmental, Social, and Governance) and DEI (Diversity, Equity, and Inclusion) principles, alongside state-level political pressure to prioritize local hiring, act as practical considerations. 7. Does Everyone Benefit Equally?: Inheritance, Creamy Layer, and Open Competition Reservation rules and eligibility criteria vary significantly across categories: SC / ST (Religious Affiliation and Inheritance): SC status is identity-based and legally recognized primarily within Hindu, Sikh, and Buddhist traditions; conversions to Christianity or Islam remain subject to legal debate. Benefits are generally inherited by children regardless of family economic status. OBC (The "Creamy Layer" Rule): To prevent wealthy families from monopolizing benefits, higher-income households above a certain threshold are excluded under the Creamy Layer rule. (※ Note: The Creamy Layer mechanism currently applies to OBCs, not to SC/ST categories.) Open Competition Option: Eligible SC, ST, or OBC candidates can choose to compete in the General/Unreserved category based purely on merit without utilizing their reserved status quota. ※ [Useful Business Etiquette in India] Asking Indian employees or business partners about their individual caste is considered extremely offensive. In job interviews or business meetings, inquiring about caste is even more sensitive than asking about gender, religion, or political views. In urban areas, professionals and younger generations generally avoid discussing their caste identity publicly. Foreigners should avoid bringing up or making assumptions based on traditional caste names like Brahmin or Kshatriya. However, verifying official caste or category certificates for administrative purposes during local hiring processes is treated as a separate, formal HR procedure and should be handled discreetly. Closing Thoughts India's reservation system is not merely an affirmative action policy. It was a national framework designed to address the historical realities and social inequalities present at independence. Over the past 70 years, it has undergone numerous amendments and legal challenges to become a foundational rule of Indian society. However, modern questions continue to emerge: "Has the reservation system truly achieved social equality?" "Why do political movements in India continuously demand new reservation categories?" "How should private enterprises and global companies navigate this system without legal mandates?" ☞ Continued in Part 2: 'The Light and Shadow of India's Reservation System: The Meritocracy Debate, the Tata Group Case, and HR Strategies for Korean Companies'