The economic reservation does not violate the basic structure of the constitution. A five-judge Constitutional Chamber, headed by Chief Justice of India UU Lalit, observed this on Monday when it rejected a series of petitions challenging the 103rd Amendment to the Constitution.

The change provided for a 10 percent reservation for people from economically disadvantaged backgrounds in central government offices and educational institutions. However, the EWS category excluded those from the SC, ST, and OBC categories.

While the petitioners had challenged the change, they claimed that giving a 10% reservation to EWS violated the 50% cap on the quota. They also wanted a ruling on whether economic backwardness alone could be the sole criterion for granting quotas in government agencies and educational institutions to those falling under the general quota.

But the verdict was not unanimous. CJI Lalit and Judge Ravindra Bhat disagreed with the majority opinion. The other three judges were judges Dinesh Maheshwari, Bela M Trivedi and JB Pardiwala.

Judge Maheshwari said reservations are a positive measure, not only for the socially and economically backward classes, but also for all disadvantaged groups. Therefore, an exclusively economic reservation does not violate the Constitution. Second, the exclusion of Scheduled Castes, Scheduled Tribes, and other backward classes from EWS reservations was constitutionally valid.

Meanwhile, Judge Bhat voiced the disagreement, saying the amendment struck the heart of the Equality Act and was discriminatory and went against the basic structure of the constitution.

Ashwini Deshpande, an economics professor at Ashoka University, said the ruling “supports the point that this was an upper-caste quota, although it was presented as a departure from caste-based quotas.”

Noting that the income cap has not been touched, Deshpande said any change to it would have sparked a whole new controversy as India does not have very reliable income figures. The professor believes that the current ceiling is not a good measure of the truly poor population, as most Indians fall below this limit. In her opinion, poverty is a temporary condition and should be addressed through vigorous anti-poverty programs.

Shankar Raghuraman, a senior editor of a national daily, had previously written that with an EMS rate of 10 percent, the line separating the poor from the rest should be set to cover only the poorest 10 percent of the population. Instead, a family falling within the income threshold of the EWS quota of 8 lakh rupees gross income per year would actually be in the top 10 percent.

In January, the government told the Supreme Court that the annual family income of Rs 8,000 was a reasonable threshold for determining EWS. The income criterion for EWS is stricter than that for the OBC creamy layer, as their composition is different despite having the same cut-off number.

On Monday, Judge Bhat said allowing a breach of the 50 per cent reservation cap could result in further breaches that could lead to foreclosure. For their part, the three judges who rendered the majority ruling found that the EWS rate did not exceed the 50 percent ceiling set in the Indira-Sawhney reservation ruling.

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In analyzing the ruling, senior Supreme Court counsel Sanjay Hegde said the case addressed a complex problem of definition. In his opinion, after the verdict, there will be a lot of competition between the front castes to be declared economically backward.

After this judgment, Hegde foresees a much more fragmented society. He argues that the heartburn that existed in the forward casts versus the reserved categories is now also evident in the former category itself as they compete with each other.

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Now that the verdict is in, the government must carefully monitor the following second-order implications, as the issue of reservations in India is sensitive and the far-reaching social and economic consequences it can have, especially for the most marginalized, are upon us.