1. A portion of seats in all govt. and private institutes are reserved (roughly about 50%, about 70% in some states)
2. Students who belong to reserved castes have lower cutoffs, to be eligible for a chance at the seat (which already have a portion earmarked for them)
3. Any student belonging to the reserved category can also compete in the non-reserved category (There is no law that prohibits reserved students from applying for seats allotted to non-reserved students)
4. For all govt. jobs, which are a lot in India and include all civil service jobs, a portion of the jobs are reserved.
5. All promotions in a particular role, must have a minimum percentage of promotees from reserved castes (about 40 - 50%) and this is not conditional on performance. As in, you can be terrible at your job, but still get promoted almost as a law.
There is a lot of resentment, particularly among more recent generations, because, most of the horrendous caste oppressions have reduced quite a bit (due to the reservation system), and in many urban centers, caste based oppression, atleast in student life is minimal. So there is resentment in students where those who are reserved look like they are cutting in line.
A bit of historical background. The originator of this affirmative action, intended for it to be a limited period thing (about 5 or 10 years). However, due to the nature of politics in India, reservation and doling out sops based solely on caste of the person has morphed into vote bank politics.
The absurdity of the situation is that the very state which is supposed to reduce caste based separation in the society ends up exacerbating it due to the affirmative action policy.
I do agree that caste based discrimination occurs quite a bit in rural areas, but it is generally in decline.
Additionally, there is a special law (called the Scheduled Castes/Scheduled Tribes atrocities act), which is so powerful, that if a SC/ST caste born individual as much as makes a verbal complaint (without the need for any proof) in a police station that the offender simply used "bad language" against him, the accused is, by law, mandated to be put in prison pending a hearing.
Knowing about the state of courts in India, once a person is stuck in a case, especially one as above, it is virtually guaranteed that his life is over. The case can drag on for decades.
In such an environment, there are many instances of SC/ST caste born people are excluded from many social rings, just because they have this unfair power to destroy the life of an individual.