103rd Consitutional Amendment Act " Economic Reservation" ( Highlights and Analysis)

A big 10 %  of all government jobs and college seats will now have a reservation for people outside high income brackets as President Ram Nath Kovind cleared 124th Constitutional Amendment bill passed by parliament this week. Some call it a landmark achievement of Prime Minister Narendra Modi, others call it a pre-election gimmick of the ruling party, which is trying to do anything and everything that is possible to retain its power in the 2019 Loksabha Elections. In this Article we are not judging the motives behind the Amendments and would be limiting our discussion to the legal points only i.e. Highlights of the Amendment, Analysis of the same and the constitutional validity of the Reservation Criterion

HIGHLIGHTS OF THE ACT

1.  The Constitutional (103rd Amendment) Act got the assent of President of India on 13th January, 2018. The bill was passed in Lok Sabha by 323 members voting in favor and 3 members against the bill. It was subsequently passed by Rajya Sabha with 165 members in the favor and only 7 members against the bill.
2. It provides reservation of jobs in central government jobs as well as government educational institutions. It is also applicable on admissions to private higher educational institutions.  
3. It applies to citizens belonging to the economically weaker sections from the upper castes.
4. This reservation is "in addition to the existing reservations and subject to a maximum of ten per cent of the total seats in each category". 
5. The Statement of Objects and Reasons of the Bill states that people from economically weaker sections of the society have largely remained excluded from attending the higher educational institutions and public employment on account of their financial incapacity to compete with the persons who are economically more privileged.
6. The bill states that it is drafted with a will to mandate Article 46 of the Constitution of India, a Directive Principle that urges the government to protect the educational and economic interests of the weaker sections of society. While socially disadvantaged sections have enjoyed participation in the employment in the services of the state, no such benefit was provided to the economically weaker sections.

AMENDED ARTICLES

•  Article 15 (6) is added to provide reservations to economically weaker sections for admission to educational institutions including private educational institutions, whether aided or unaided by the State, other than the minority educational institutions referred to in clause (1) of Article 30. The amendment aims to provide reservation to those who do not fall in 15 (5) and 15(4) (effectively, SCs, STs and OBCs).
•  Article 16 (6) is added to provide reservations to people from economically weaker sections in government posts.
• An explanation states that “economic weakness” shall be decided on the basis of “family income” and other “indicators of economic disadvantage.”

ANALYSIS

Constitutionality of Constitutional (103rd Amendment) Act, 2018

As the constitution stands amended, the only constitutional challenge left is conformity to the basic structure doctrine. So far, it has become an established principle that reservation shall have a cap of 50%. These stipulations first arose in M.R Balaji v. State of Mysore[1] when court stated that reservation above 50% would imply dominance over section 16(1). The government notification providing 10% reservation to weaker economic sections of society was struck down in Indra Sawhney v. UOI[2]. However, it is noteworthy that these rulings were given in relation to a law or subordinate legislation and have never been discarded in violation of Basic Structure Doctrine. Moreover, the amendment only provides reservation to the extent of 10%. , however, the existing articles 15(4), 15(5) and 16(4) do not mention that reservation shall be 50% explicitly, by way of legislation. Consequently, any challenge pertaining to violation of basic structure does not seem to have a stand.

A writ petition has been filed by Youth for Equality contending that 103rd amendment violates the basis structure doctrine. Economic reservation finds its ground in terms of equality. It is difficult to see how economic reservation damages or destroys the concept of equality, and consequently Basic Structure. Therefore, the fact how equality and social justice is presently understood in Constitution, shall be no ground for striking it down while I agree that the 103rd amendment has created a logical mess and had put group determine, social and educational backwardness at war by inclusion of article 15 (6) and 16 (6).

You can read the notification here https://egazette.nic.in/WriteReadData/2019/195175.pdf

[1] M.R Balaji v. State of Mysore, 1963 AIR 649.

[2] Indra Sawhney v. Union of India, AIR 1993 SC 477.