Traditionally it was
“United we stand, divided we fall”
However, in Indian context it has become,
“United we reserved, divided we general”

Reservations in Indian economy leads to ‘Tunnel Effect’. In a remarkable article, The Changing Tolerance for Income Inequality in the Course of Economic Development, Albert O. Hirschman coined a now famed expression: The Tunnel Effect, the idea that large sections of society will happily tolerate inequality in the hope of eventually becoming part of the economic surge. Suppose you are driving through a tunnel, waiting for traffic to move. The lane next to you, headed the same way, starts moving—you celebrate, for it invigorates in you a hope, an expectation of mobility. Now suppose that the adjacent lane keeps moving for a significant period of time while you stay put. The hope will soon dissipate into acrimony and perhaps a feeling of injustice.

The system of reservations goes against the level-playing field concept and the development of competition and competitive spirit among the citizens of the country. This negatively affects productivity of the citizens and growth of the economy. Our Constitution has laid down a fundamental duty for it’s citizens to strive for excellence in every field. But how can that happen without a level-playing field? If we make a competition law for our industry and firms so as to encourage them to increase creativity, innovation and growth, why do we not replicate the same principle when it comes to our manpower, our own people?

The recent reservation protests and demonstrations by Patidars and Jats, caused violence leading to huge loss of life and property. The cumulative effects of these losses and the resultant eruption of unrest is enough to derail the economic momentum of a region as witnessed recently in Darjeeling and Jammu & Kashmir.

The system of reservations is therefore not only bad for the Indian economy, but is also disastrous for the beneficiaries of the system. It’s better to realise this as soon as possible and incorporate the system of meritocracy and competition among our citizens. People who want reservation must understand that there is nothing like a free lunch. If you get something for ‘free’ then there are several other ways that you lose because of the same policy which may not be so apparent at that time. If India really wants to overtake China as an Economic Superpower, removal of the system of reservation has to be the first step towards that goal.