INDIA BUSINESS WORLD - APRIL 2007
The Month that was ...

COURT STAYS QUOTA IN CENTRALLY-FUNDED EDUCATIONAL INSTITUTIONS

IN A decisive intervention, the Supreme Court on Thursday stayed the 27% reservation for other backward castes (OBCs) in centrally-funded educational institutions. Further hearing on the matter has been scheduled for the third week of August. Quotas for Scheduled Castes and Tribes are unaffected.

The order has raised doubts whether the Indian Institutes of Management (IIMs) would be able to complete their admissions by April 12 as scheduled. The IIMs have prepared short-lists of OBC candidates, which would now prove futile. The institutes are waiting for the government's response to the court order. The ongoing admissions to under-graduate and post-graduate medical courses are likely to be affected as well.

Indian Institutes of technology (IITs) and central universities, which have not initiated their admission procedures, are less affected. The order also has raised questions about utilization of the additional 1% higher education cess the government has levied in this Budget.

The judgment of a Bench comprising justices Arijit Pasayat and LS Panta represents a major setback for the UPA government, which had rushed through the Central Educational Institutions (Reservation in Admission) Act, 2006, providing 27% reservation for OBCs in premier central educational institutions, including IITs and IIMs, commencing from the academic session 2007.

Industry has welcomed the interim order. Industry chamber Ficci came out in support of the order. "Ficci finds the SC judgment thoughtful and constructive in indicating the need for further debate in the country on the issue. The SC is concerned that the correlation between the economic status of OBCs and their caste status may have weakened," said Ficci secretary-general Amit Mitra.

The interim order clearly signals that the court will not follow the politicians' expectations that laws passed by Parliament would be above judicial scrutiny.