SC verdict on OBC creamy layer criterion

Why in the News

• On March 11, the Supreme Court of India ruled that income alone cannot be the sole criterion to determine the “creamy layer” among Other Backward Classes (OBCs).
• The judgment also clarified the long-standing issue of equivalence between employees of Public Sector Undertakings (PSUs), private sector workers, and government employees in determining creamy layer status.

Background

• The concept of the creamy layer was introduced by the Indra Sawhney vs Union of India case (1992), which upheld 27% reservation for OBCs while excluding the socially advanced sections among them.
• In 1993, the Department of Personnel and Training (DoPT) issued an Official Memorandum specifying criteria for identifying the creamy layer.
• A 2004 DoPT clarification letter created confusion regarding how the criteria should apply to employees in PSUs and the private sector, leading to the present petitions.

Key Points of the Judgment

• Income not the sole criterion:
  The Court ruled that salary-based income cannot alone determine creamy layer status, especially for employees in PSUs or the private sector.
• Equivalence clarified:
  The judgment addresses how PSU and private sector employees should be treated in comparison with government employees for determining creamy layer status.
• Impact on reservation eligibility:
  The ruling may expand the pool of beneficiaries under OBC reservation, as children of senior PSU officials previously excluded due to income thresholds may now qualify.

Existing Creamy Layer Criteria

According to the 1993 DoPT guidelines, the following categories fall under the creamy layer:

• Holders of constitutional posts
• Group A/Class I and Group B/Class II officers of Central and State governments
• Senior officials in PSUs
• High-ranking Armed Forces officers
• Professionals, industrialists, and large property owners
• Individuals crossing the income/wealth threshold

Armed Forces criterion

• Officers up to the rank of Lieutenant Colonel are eligible for OBC reservation.
• Higher ranks fall under the creamy layer.

Income Limit

• Initially fixed at ₹1 lakh per annum in 1993.
• Gradually revised over time.
• Since 2017, the limit has been ₹8 lakh per annum for determining creamy layer status among non-government employees.

Significance

• Clarifies reservation policy: Resolves ambiguity regarding the treatment of PSU and private sector employees.
• Potentially increases OBC beneficiaries: More individuals may qualify for reservation benefits.
• Reaffirms social justice principle: Ensures that reservation benefits reach the socially and educationally backward sections, not just those below an income threshold.

Source: IE & TH