A proposal for revision of the income criteria for determining the Creamy Layer amongst the OBCs is under consideration of the Government.

What is the Creamy Layer?

• Creamy Layer is a concept that sets a threshold within which OBC reservation benefits are applicable.
• While there is a 27% quota for OBCs in government jobs and higher educational institutions, those falling within the “creamy layer” cannot get the benefits of this quota.

Basis of Creamy Layer

• It is based on the recommendation of the Second Backward Classes Commission (Mandal Commission).
• The government in 1990 had notified 27% reservation for Socially and Educationally Backward Classes (SEBCs) in vacancies in civil posts and services that are to be filled on direct recruitment.
• After this was challenged, the Supreme Court in the Indira Sawhney case (1992) upheld 27% reservation for OBCs, subject to exclusion of the creamy layer.

How is it determined?

• Following the order in Indra Sawhney, an expert committee headed by Justice (retired) R N Prasad was constituted for fixing the criteria for determining the creamy layer.
• In 1993, the Department of Personnel and Training (DoPT) listed out various categories of people of certain rank/status/income whose children cannot avail the benefit of OBC reservation.

1. For those not in government, the current threshold is an income of Rs 8 lakh per year.
2. For children of government employees, the threshold is based on their parents’ rank and not income.
3. For instance, an individual is considered to fall within the creamy layer if either of his or her parents is in a constitutional post; if either parent has been directly recruited in Group-A; or if both parents are in Group-B services.
4. If the parents enter Group-A through promotion before the age of 40, their children will be in the creamy layer.
5. Children of a Colonel or higher-ranked officer in the Army, and children of officers of similar ranks in the Navy and Air Force, too, come under the creamy layer.
6. Income from salaries or agricultural land is not clubbed while determining the creamy layer (2004).

What is happening now?

• MPs have raised questions about the pending proposal for revising the criteria.
• They have asked whether the provision of a creamy layer for government services only for OBC candidates is rational and justified.

Has it ever been revised?

• Other than the income limit, the current definition of the creamy layer remains the same as the DoPT had spelled out in 1993 and 2004.
• The income limit has been revised over the years.
• No other orders for the definition of the creamy layer have been issued.
• While the DoPT had stipulated that it would be revised every three years, the first revision since 1993 (Rs 1 lakh per year) happened only in 2004 (Rs 2.50 lakh), 2008 (Rs 4.50 lakh), 2013 (Rs 6 lakh), and 2017 (Rs 8 lakh).
• It is now more than three years since the last revision.

What does the government propose to do about the revision?

• A draft Cabinet note has stated that the creamy layer will be determined on all income, including salary calculated for income tax, but not agriculture income.
• The government is considering a consensus on Rs 12 lakh but salary and agriculture income are also being added to the gross annual income.

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