Issue

Context

A Group of Ministers (GoM) headed by defence minister Rajnath Singh has been tasked to upwardly revise the gross annual income limit of Rs 8 lakh fixed for defining the creamy layer among Other Backward Classes. 

Background:

• Originally, reservation for Dalits, Adivasis and the Other Backwards Classes did not specify any income criteria. Neither were any such riders introduced by central or state legislation. The sole basis of reservation was caste.
• In 1993, it was the Supreme Court of India which brought the concept of the “creamy layer” through its judgement in the Indira Sawhneycase.
• The court said putting inthe framework of the “creamy layer” was in keeping with the basic structure of the Constitution as it mapped to the principle of equality.
• Exclusion of such socially advanced members will make the ‘class’ a truly backward class.
• The principle, however, only applied to the Other Backward Classes, not Dalits and Adivasis, who are acknowledged as the country’s most backward communities.

The Indra Sawhney Case: The Indra Sawhney case was decided by a nine-judge bench of the Supreme Court in 1992. The case is famous for decisively laying down several landmark propositions such as: 50% threshold in reservations the bar against reservations in certain types of posts the exclusion of ‘creamy layer’ This piece is, however, limited to the debate on using caste as a factor in determining the backwardness of a group and how Indra Sawhney settled this debate to change the course of India’s reservation jurisprudence and policy forever.

Analysis

What is the creamy layer?

• The concept of ‘creamy layer’ was introduced in 1971 by the Sattanthan Commission, which directed that the creamy layer should be excluded from the reservation of civil posts.  
• It is used to refer to the relatively forward and better-educated members of the Other Backward Classes (OBCs) who are not eligible for government-sponsored educational and other benefit programmes.
• It would include the children of Supreme Court judges, senior bureaucrats and military officers above the rank of colonel belonging to that community.
• The creamy layer test specifies that a candidate must be below a certain income ceiling in order to avail of reservation in government jobs and educational institutions.
• The Commission had confined the exclusion of creamy layer only to the OBCs and not the SC/STs. The difference between ‘creamy layer’ and ‘non-creamy layer’ is as given below:
  • Creamy layer- whose yearly income is more than Rs 8 lakh or government employees of greater than class 3
  • Non-Creamy layer- Whose yearly income is below Rs 8 lakh or government employees of class 3 or below 3

Mapping the OBCs in India: In India, Other Backward Classes (OBCs) constitute a little less than half of the country’s electorate and is a vastly heterogeneous group. OBC is an umbrella term used for a range of castes and communities that are socially and economically disadvantaged. Currently, there is no updated census on the population of OBCs. There is only a caste data census (1931) before independence as the basis of population share of the sub-castes within OBCs. The next census, in 2021, is slated to count OBCs for the first time in 90 years.

Reservation for OBCs:

• Reservation for OBCs, unlike that for Scheduled Castes and Scheduled Tribes, was not initially guaranteed in the Constitution and extends only to jobs and education, not to elected representatives.
• It draws its roots from the Mandal Commission, which was set up in 1979, and its recommendation for 27% OBC quota accepted by the central government in 1990.
• In 2006, the reservation was extended to institutions of higher education.

Reservation (%) for different categories: SCs & STs: 5 percent and 7.5 percent of positions in central government services and central educational institutions are reserved for SCs and STs respectively. : 27 percent positions in central government services and central educational institutions are reserved for OBCs. EWS: With the addition of 10 percent for economically weaker section (EWS), as per the latest Constitution (103rd Amendment) Act, 2019, the percentage of reservations in central government services and educational institutions will now be around 59.5 percentage. In reservation to services and educational institutions at the state level, the percentage for SCs, STs and OBCs vary from state to state based on the demographics.

 What does the Law say about OBCs?

• Article 15 and 16 of the Constitution of India which are applicable to the Scheduled Castes (SCs) and Scheduled Tribes (STs) are also applicable to members belonging to the Other Backward Class (OBC).
  • Article 15(4): Nothing in [Article 15] shall prevent the State from making any special provision for the advancement of any socially, and educationally backward classes of citizens of or for the Scheduled Castes and the Scheduled Tribes.
  • Article 16(4): It enables the provision of reservation to Backward Class of citizens, who are not adequately represented in the State. 
• Mandal Commission: The Mandal Commission, which submitted its report in 1980. The Commission recommended seat reservation for OBCs, in addition to the seats reserved for SCs and STs in educational institutions and avenues of public employment.

The ground reality:

• Not all castes among the Other Backward Classes (OBCs), entitled to reservations are reaping the same benefits.
• As per a recent report, 97 percent of all jobs and admissions, reserved under the OBC category have been claimed by just under 25 percent of sub-castes. 983 communities, 37 percent of the total -- did not get a single job or admission.
• Interestingly, just 10 communities in the OBC category have availed of as much as 24.95 percent of jobs and 
• As many as 994 OBC sub-castes have a total representation of only 2.68 percent in recruitment and 

Should the reservation be determined by ‘economic criteria’?

• Reservation is, by definition, a means of ending discrimination based on caste which has been a feature of the Indian society for thousands of years.
• It is not a remedy for economic backwardness.
• This is why there is no reservation for low-income members of the upper castes.
• Reservation is meant to ensurethat backward castes are fairly represented in public services, educational institutions and legislatures, and get a share in state power – something denied to them throughout Indian history.
• In 1937, when the British Raj reserved legislative seats for Dalits according to a pact between Mohandas Gandhi and BR Ambedkar, it did not specify income criteria.
• Neither did independent India’s first government place such restrictions on Dalit and Adivasi reservation.
• Many commentators have argued that mandating an economic ceiling for reservation misunderstands how caste works: Dalits and Adivasis face discrimination even if they are well-off or educated.

The current situation:

• At present, OBCs are entitled to 27% reservation in higher educational institutions and public sector employment if the gross annual income of one’s household does not exceed Rs 8 lakh.
• A person with an annual income of Rs 8 lakh or more is classified as belonging to the 'creamy layer' among OBCs and cannot avail of reservations.
• The income criteria are usually reviewed every three years.
  • In 2013, the gross annual income criteria were raised from Rs 4.5 lakh to Rs 6 lakh.
  • In 2017, the government raised it to Rs 8 lakh.

What the government is planning?

• The government is planning to upwardly revise the gross annual income limit of Rs 8 lakh fixed for defining the creamy layer among Other Backward Classes. 
• The GoM is also considering whether the income criteria for classifying creamy layer for OBCs should be different for rural and urban areas. This is not the first time that the proposal has been mooted.
• In 2011, the National Commission for Backward Classes had proposed that income criteria for creamy layer should be different as gross income levels were lower in rural areas.
  • It proposed Rs 9 lakh for rural and Rs 12 lakh for urban areas as income limit for creamy layer classification.
  • However, the proposal was not accepted.

Raising the ceiling of the annual income of OBC families to get benefits of quota would result in a larger pool of candidates being eligible for government jobs and seats in educational institutions. This step would also ensure greater social justice and inclusion for members of the Other Backward Classes.