What Government should have done is, established a very rigorous policy, that would have ensured that only merit was selected and not the caste (higher caste), but that would have made government on wrong side of the path with so called higher caste, plus it would have needed an overall mind-set change, and a ruthless regime to implement such a policy.
Apart from that, what was needed, was also a drastic improvement and roll-out of quality education for everyone. This is something not available even today, forget 20 or 40 years back. (Did you go to a Government School? Would you send your kids to government school in India?).
These two tasks would have needed lot of money and political wish (as they say,
tan, man aur dhan). Something the great leaders lacked or were not interested in concentrating on during formative years of India.
Apart from that, it is so easy to measure everything as numbers, percentages. So they said, what do we want? We want those who were left out to have jobs. Okay, how many of them? say x% of them. So let's reserve that many jobs for them. No matter what qualification they have, if they have right skills or not, they will get the job. After all, why does someone study? To get a job. So if they are going to get a job, they don't have a reason to study. So we will give them job, and they don't need to study really hard for those jobs. if they don't need to study, they will not need good schools, if they don't need good schools, we need not create them. (My Dalit friends, I know some of you have studied real hard. I know some very professional and highly successful people, and they have proven that things can be changed, but this is just for you all, to let you know why the great leaders created reservation. Because they were unable and unwilling to do right thing, that is bring quality education to masses).
A disclaimer: I am not a pro-reservation's, just trying to reason why reservation was created in first place, so don't slam me.
