Cut Offs, Reservation and Efficient Allocation of College Seats

By: Somya Barpanda

Every admission season, the Delhi University campus is gripped by a sense of frenzy. DU aspirants are seen running all over the place, filling and submitting admission forms with the hope of bagging that dream college-course combo. All cut off seasons are marked with such excitement and anxiety; and once the cut off lists are out, some rejoice while others have to deal with heartbreak.

Though a cruel admission criteria for students, the cut off system is the main medium for allocation of seats in Indian universities. For technical courses like medical, engineering etc, again one has to clear the entrance-test score cut off to secure a seat. Against this background, besides the pressure to score high, general category students also have to bear the added burden of Reservation. How does reservation formally affect non-reserved students?  What is its effect on the efficiency-quotient of seat-allocation?

Let’s attempt a simple demand-supply analysis of the ‘market for college seats in a particular course’. This is analogous to the normal concept of demand and supply of marketable goods in Economics. However, here in place of ‘price’, we have the ‘cutoff marks’ on the y-axis and instead of ‘quantity of goods’, x-axis measures the ‘no. of college seats in a particular course’.

• Supply of seats is inelastic i.e. it is fixed at some specific number say ‘S’. So, the supply curve (the solid blue line in the graph) is a vertical line.

•  Demand for seats comprises of the willingness and ability of the students to secure a seat. The term ‘willingness’ refers to the students’ eagerness to grab a seat and ‘ability’ stands for the marks they possess which enables them to lay their claim for a seat by meeting the cutoff.

The demand curve(green line) is downward sloping as  higher the cutoff marks, lesser the number of claimants for seats and vice versa. It has been shown as a continuous downward slope for simplicity.

Both general and reserved category students form the market-demand.

• The equilibrium cut off is market-determined by the intersection of the supply and demand curves. At the equilibrium cut off, supply of seats equals the demand for seats and the market clears.

Now, let’s bring in Reservation into the picture:

• Without Reservation, ALL students (general and reserved alike) face the solid-blue line as their supply curve and the actual number of seats available (S) is what is on offer for them. The equilibrium point is E which yields the equilibrium cutoff ‘C’. With ‘C’ as cutoff, all of the available seats ‘S’ get filled up and the market clears.

• With Reservation, the number of seats on offer for general students declines from S to S’. This is when number of seats reserved is: (S minus S’). Now, (S-S’) seats are exclusively meant for reserved category students while S’ seats will be allocated as per market forces of supply and demand; S’ seats are available for both general and reserved groups. The new supply curve relevant to the market which we’ll call the ‘effective supply curve’ is obtained by the leftward shift of the original supply curve(a leftward parallel shift as at each cut off, the number of seats supplied in the competitive market is lesser). This is shown by the blue dotted line.

With the new supply, at the initial cutoff C, there’s excess demand for seats. This puts upward pressure on cut off marks and the new equilibrium cut off is the higher C’. New market equilibrium is E’.

So post reservation/quota imposition, the general category students face a higher cutoff and lesser number of seats.

Non-reserved students with marks strictly between C and C’, could have gotten seats with the initial lower cutoff (C) which would have prevailed in case of no reservation but now they can’t get those seats. These seats will be given to the quota-eligible individuals at lower than the new market-cutoff (C’).

Like any other market intervention, reservation results in a fair amount of inefficiency. The scarce resource (seat) doesn’t go to the individual who ‘values it the most’ i.e. who is eager to obtain it and hence secures a high score to deserve it by meeting the cut off. Even if we ignore this issue of ‘fairness’ (for the definitions of the term may differ and reservation may be intended to promote equal opportunity for the less privileged), as long as all reserved seats get filled up, that is still fine . But as it happens most of the time, colleges are unable to fill up all of the reserved seats and they lie vacant while the left-out general-category students can’t get them. For example, even after the announcement of 4^th or 5^th cut off lists in DU, quota seats still stay unoccupied. That leads to sad wastage of a precious resource like a seat.

While the aarakshan debate remains a raging one in the country, the sole intent of this article is to present reservation as a market intervention which complicates the workings of a free market.