Why does IIM Ahmedabad have low percentile cut offs when they are only admitting students at 99.5+ percentile?

More than 90 percent of aspirants that apply for CAT are engineers. In order to maintain the diversity of people from each section, there are different cut-offs for people with different backgrounds. The 99.5 percentile cutoff mentioned in question was for the male applicants with engineering backgrounds. 

It has also been observed in previous years that general applicants with non-engineering backgrounds have got a call from IIM Ahmedabad even by scoring less than 90 percentile. The following table shows the minimum cut-off percentiles for 2021-23 MBA Batch.

 However, these are just the minimum cut-off percentiles after which you have been shortlisted, but the final selection varies upon various other factors such as Analytical Writing Test (AWT) and Personal Interview (PI), etc. You are not selected by the percentile alone. 

A percentile of 99.5 means almost 1000 candidates which are more than the quota of seats allotted to engineering backgrounds students. If the criteria were percentile alone then all of the approximately 400 seats would have been filled by engineering background students only. Other background students are selected at a lesser cut-off compared to engineering students because they are judged upon the cut-off of their respective category. The distinct advantage to non-engineering background students is given only by IIM A so far, thus having low percentile cut-offs.