This article proposes an anthropology of affirmative action that is embedded in analysis of the wider political economic transformations in which affirmative action policies emerge. It is argued that this historically situated approach enables analysis of the relative effects of affirmative action on processes of socio-economic marginalization. The focus of the article is on the combination of preferential treatment policies and the provision of education as a state-led response to historical marginalization. These policies are explored in the context of Adivasis (tribal or indigenous peoples) in Jharkhand State, India. The analysis shows how, despite improvement in absolute educational outcomes among Adivasis as a result of these policies, inequalities in relative outcomes are being reproduced and are widening. This is explained in part by market led-gains within the private education sector for more advantaged sections of society that outweigh the predominately state-led improvements for Adivasis. The analysis demonstrates the limitations of contemporary affirmative action in affecting the relative position of socio-economically marginalized groups in contexts where the state is losing some of its universal features and ambition.