All economics, it is said, is about politics. And all politics is grounded in economics, effectively about public policies to enable access to opportunities. This week, the Modi government announced the enumeration of caste in the forthcoming census. Typically, public discourse is riveted on the whataboutery of when who was for it and who was against. Beyond the claims and counterclaims, the inclusion of caste in the census underlines the omnipotence of caste in India’s political matrix.
It also underlines the chasm between the need for sustainable incomes and India’s status rising in a decade from the 11th to the fifth largest economy in the world. The measure of aggregate progress in the past decade hides the stratification across India. The political geography of India’s economy illustrates this divergence. India’s per capita income is Rs 2.15 lakh. Karnataka tops the list with Rs 3.80 lakh and Bihar trails with Rs 66,828; within Bihar, the district of Sheohar has a per capita income of Rs 19,561.
As Nobel laureate Angus Deaton observed, “averages are no consolation for those left behind”. It is not surprising that the move to enumerate caste originated from Bihar, or that the initiative is timed for the forthcoming polls. Bihar is home to around 12 crore of India’s 142- crore population, and at Rs 10.97 lakh crore, accounts for barely 3 percent of India’s GDP of Rs 331.03 lakh crore. The distance between Karnataka and Bihar, or between Bengaluru and Sheohar, is about empowerment and employment. The political class has presented the caste census as a panacea for an inclusive reservation system. Quota warriors cite the Rohini Commission’s findings to point out that “97 percent of the reserved jobs and seats have gone to 25 percent of OBC subcastes”.
Arguably, the formula of reservation must be backed by data. The caste census will at best a template for inclusion, not expansion in job creation. The momentum of public opinion backing the move clearly casts questions on job creation. Take the IT services sector, which is one of the largest white collar employers.
The Parliamentary Standing Committee on Education, in its March 2025 report, cited data to note that “there is an unusual decline in placements in IITs and IIITs between 2021-22 and 2023-24”. A Team Lease report in October estimated that only 10 percent of engineering graduates would secure jobs this year. Indeed, another survey, published in March 2025, revealed that 83 percent of engineering graduates have no jobs. Seven decades after independence, after numerous commissions and committees on shifting labour off fields into factories, barely 11 percent of workers are employed in manufacturing and 45.5 percent in agriculture. Manufacturing accounts for 14 percent, while agriculture accounts for 18 percent of GDP.
Effectively, nearly half the workforce is dependent on a sixth of the national income. A blend of imperfect policies has made farming unviable. Unsurprisingly, every major land-owning caste— for instance, the Marathas in Maharashtra—is agitating for a quota. The lack of opportunities haunting demographic dividend is reflected in the headlines. In Uttar Pradesh, over 48 lakh persons applied for 60,244 posts of constables. In Bihar, over 8 lakh applied for 15,000 home guard posts. In Rajasthan, over 24 lakh people applied for 53,749 peon positions— including some with PhD, MBA and law degrees. In Jammu and Kashmir, over 5.5 lakh aspirants applied for 4,002 posts in the police department.
Over 36 lakh candidates applied for 17,727 posts in the central government. A popular notion harboured by many is that the rush is driven by a craze for government jobs. The irony is that the freebies culture has left governments with fewer resources to fill vacant posts. It is estimated that there are nearly 2 million in the states—largely in the police, health and education departments. Madhya Pradesh has over 2.7 lakh vacant posts; Karnataka has over 55,000 teacher posts unfilled, while Delhi has over 8,000 police posts vacant. Even as courts labour with over 5 crore pending cases, 359 posts for judges in high courts and 5,238 posts for judicial officers in the lower judiciary are vacant. The rush for government jobs is aggravated by the dearth of jobs in the private sector—particularly, in the most populous and least industrialised states. The crux is the lack of reforms for job creation. It is known that the majority of reforms are vested with states— modernisation of GST, land, labour, permits and regulations.
Yet states, in their race to host investor summits, scarcely act on the reforms needed to translate memoranda into investments and jobs. Improved access to credit for smaller enterprises could boost both employment and exports. India can be a global breadbasket, but it requires liberalisation of farm laws and enabling of farmers’ collectives for export. Urbanisation is placed at the intersection of the rural and urban economies, and building new cities will create jobs and spur growth. The global economy is being recast by economics and geopolitics. The emerging triad of disruptions— geopolitics, climate change and adoption of technology—will make job creation harder as capital will deploy technology to retrench labour. The tariff threats of the Trump administration is a wake-up call. There is much gush gush about reforms to harvest the China+1 opportunity. Success calls for a shift from notions to action. It is time the political class recognised that unless it sheds the strong consensus for weak reforms, the prescription of caste census will only deliver a placebo.