Caste-based quotas, whether in education, jobs, or electoral positions, are routinely vilified for lowering the quality of the space they are applied to, because of the belief that those chosen through quotas are inherently inferior to those selected on open, or non-quota, positions. This widespread belief transcends the boundaries between academic arguments and popular perceptions.
The only way to assess the validity of the ‘lowering-merit’ argument would be to analyse it empirically, in a rigorous manner. Collect data on the outcomes of interest (e.g., productivity of enterprises where a part of the workforce is selected through quotas, or various educational indicators for colleges etc.), and assess if quotas have resulted in lowering the average (or shifted the distribution) for the particular outcome being assessed.