Muslims in India are even more disadvantaged than low-caste Hindus, a report commissioned by the government in Delhi suggests.
The report says India's 138m Muslims are poorer and less educated and suffer from higher unemployment and greater mortality than other religious groups.
Details of the report - yet to be published - have been leaked to the local media.
Some ministers are already calling for affirmative action for Muslims.
The Hindu-nationalist BJP party has said it will oppose any system of quotas for Muslims.
Religious riots
BJP General Secretary Arun Jaitley said the Indian constitution does not allow for reservation on the basis of religion and the government should not use the report as a launch pad for religion-based reservation.
India currently implements reservations for disadvantaged castes, but not for religious groups.
Correspondents say India prides itself on being a pluralistic secular democracy. It is often pointed out that India is home to the world's biggest minority, and that there are more Muslims in India than in all of Pakistan, the BBC's Anu Anand in Delhi reports.
But our correspondent says it is unclear how far the government can go to improve Muslims' status in a country that has been torn apart by Hindu-Muslim riots, and has witnessed acts of terror widely blamed on Muslims.
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