Why Centre is considering ‘equivalence' in application of ‘creamy layer' condition in OBC quota

Indian Express

9 hours ago

The government is considering ways to ensure 'equivalence' in the application of the 'creamy layer' condition in reservation for Other Backward Classes (OBCs) across a range of jobs at central and state government organisations, public sector enterprises, universities, etc.
A proposal has been prepared after consultations among several government ministries and departments, and bodies such as NITI Aayog and the National Commission for Backward Classes (NCBC), The Indian Express reported last week.
The concept of 'creamy layer'
In its landmark verdict in Indra Sawhney vs Union of India (1992), the Supreme Court upheld the government's decision to implement the recommendations of the Mandal Commission, but said that affluent sections among the socially and educationally backward classes, the so-called 'creamy layer', must be excluded from job quotas.
Thereafter, on September 8, 1993, DoPT issued a circular identifying the creamy layer that would be ineligible for OBC reservation. Sons and daughters of high constitutional functionaries, and government, PSU, and armed forces officers were included in the list, along with 'professional class and those engaged in trade and industry', and 'property owners'. An 'income/ wealth test' was also mentioned.
Specifically, an individual either of whose parents was a direct recruit to a Group A/ Class I government job, or if the parent was promoted to Group A before the age of 40, was not eligible for the OBC quota.
An individual both of whose parents were direct recruits to Group B jobs would be part of the creamy layer. Children of armed forces officials only up to the rank of Lieutenant Colonel could avail of the quota.
For those outside the government sector, the income ceiling was set at Rs 1 lakh per annum. It was subsequently revised upwards, and the limit has been Rs 8 lakh since 2017. However, income from salary and agricultural income is not included.
2004 'clarification' and after
The above criteria were not comprehensive, especially with regard to jobs outside the government sector.
So, on October 14, 2004, DoPT issued detailed 'Clarifications regarding creamy layer amongst OBCs' in order to determine 'the creamy layer status of sons and daughters of persons employed in organisations where equivalence or comparability of posts vis-à-vis posts in Government has not been evaluated'.
It was determined that: 'Income of the parents from the salaries and from the other sources (other than salaries and agricultural land) is determined separately. If either the income of the parents from the salaries or the income of the parents from other sources (other than salaries and agricultural land) exceeds… Rs 2.5 lakh per annum [which was the creamy layer income ceiling for private persons at the time] for a period of three consecutive years, the sons and daughters of such persons shall be treated to fall in creamy layer…'
However, these 'clarifications' were not widely implemented to deprive individuals of reservation benefits during the UPA years (2004-14), as the government sought to woo OBCs in pursuit of various social justice goals.
In late 2014, DoPT started examining caste certificates issued by various authorities to determine their compliance with the 2004 'clarification'.
Between the Civil Services Examinations (CSE) of 2015 and 2023 (batches of 2016-24), DoPT rejected caste certificates of more than 100 successful candidates who would have qualified as OBC under the September 1993 criteria, but who were put in the creamy layer in accordance with the new criteria. Interestingly, many of these individuals have appeared in other competitive examinations, and have been considered OBC on the basis of the same caste certificate.
Efforts to find 'equivalence'
The unresolved case of the more than 100 candidates determined by DoPT as being in the creamy layer led to consultations among various stakeholder ministries.
While 'equivalence' has been established with regard to the various central PSUs, the process remains pending for others — and the sons/ daughters of a wide range of employees are put in the creamy layer based on their incomes, thanks to 'clarification' issued in 2004.
In June this year, Home Minister Amit Shah and NCBC chairman Hansraj Ahir recommended to the Ministry of Social Justice and Empowerment that the policy under consideration should be implemented retrospectively so that these more than 100 candidates are also able to benefit.
Views of the Ministries of Social Justice, Education, Law, and Labour, the Department of Public Enterprises and DoPT, as well as NITI Aayog and NCBC were sought in the matter.
According to sources in the government, some of the issues in the proposal to establish 'equivalence' are:
* Since the salaries of university teachers from assistant professor upward typically start from 'Level 10', which is equivalent to entry-level Group A posts in the government, it has been proposed that children of university teachers be categorised as creamy layer.
*For central/ state autonomous and statutory bodies, it is proposed to establish 'equivalence' with central government officials, depending on their level/ group/ pay scale, which is aligned with the corresponding pay in central and state governments.
* Non-teaching staff of universities are proposed to be placed in the creamy layer depending on their level/ group/ pay scale.
* It is proposed that all executive-level positions in state PSUs be treated as creamy layer, akin to the 'equivalence' that has been in force for central PSUs since 2017. However, it has been proposed that executives whose income is within Rs 8 lakh — which is the ceiling for private persons — will not be categorised as creamy layer.
* It is proposed that employees of government-aided institutions, which usually follow the service conditions and pay scales of the central or respective state government, be placed under appropriate categories based on the 'equivalence' of their post and service conditions and pay scales.
The likely beneficiaries
If the proposals are implemented, sons/ daughters of lower-level government employees with annual salaries of more than Rs 8 lakh are likely to benefit the most. It will correct the anomaly by which children of government teachers get the benefit of OBC quota, but children of employees of similar rank at government-aided institutions are denied on the basis of income.
A similar situation exists in several state government organisations. In one of the cases before the government, the children of an individual who fills fuel in vehicles at a pump run by a state-owned oil marketing company have been declared creamy layer on the basis of income.
Not much is expected to change for children of employees in the private sector. Sources in the government said it is noted in the proposal that it is difficult to establish 'equivalence' given the vast range of positions, pay, and perquisites in private employment, and creamy layer can be determined based on the income/ wealth criteria.
The income ceiling was revised in 2004, 2008, 2013, and 2017.