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Legopedia

Difference Between Creamy and Non Creamy Layer of OBC

creamy layer

“There is equality only among equals. To equate the unequal is to perpetuate inequality.”

The term ‘Creamy Layer’ is used to refer those members of the Other Backward Classes (OBCs), who are not eligible for reservation policy of the government in jobs and educational institutions. Non-Creamy Layer covered those members of OBCs who get the benefit of reservation in government jobs and educational institutions. The Hon’ble Supreme Court in the case of Indra Sawhney v Union of India[1] introduced the “Creamy Layer” as criteria in determining the more privileged and better-off people among OBCs.

OBC Non-Creamy Layer

The term ‘Creamy Layer’ was introduced by the Sattananthan Commission in 1971. The commission made the recommendations that the creamy layer should be excluded from the reservations of civil posts and services granted to the OBCs.

The first Backward Classes Commission was set up by a Presidential Order under Article 340 of the Constitution of India on 29th January 1953 and it submitted its report on 30th March 1955. The commission was set up under the chairmanship of Kaka Kalelkar.

However, the Central Government did not implement the recommendations of the Commission and it was left on the discretion of the state governments to choose their own criteria for defining backwardness.

Mandal Commission

On the 20th December 1978 then Prime Minister of India Morarji Desai announced on the floor of the Parliament the decision to appoint Backward Classes Commission under the chairmanship of Bindheshwari Prasad Mandal with the four other members. The president made the decision official on 1st January 1979. This commission is famously known as Mandal Commission.

The term of reference[2] for the commission was:

  • To determine the criteria for defining the Socially and Educationally Backward Classes (SEBCs);
  • To recommend steps to be taken for the advancement of the Socially and Educationally Backward Classes (SEBCs).

The Commission concluded that the population of OBCs, both Hindu and non-Hindu, is around 52% of the total population of India. Hence, it was initially argued that the percentage of reservations in public services for OBCs should be 52%. However, this provision would have gone against the earlier judgments of the Supreme Court of India which had laid down in a number of cases that the total quantum of reservation under Articles 15(4) and 16(4) of the Constitution should be below 50%.[3] Therefore, the commission recommended a reservation of 27% for OBCs in all government jobs and educational institutions.

The Mandal Commission’s recommendations were made applicable by then Prime Minister V.P. Singh on 13th August 1990 by a Government Order.

Indra Sawhney v Union of India

This case is famously known as the Mandal Commission case. In this case, the constitutional validity of Government Order for the implementation of the Mandal Commission’s recommendations was challenged in the Supreme Court of India by Indra Sawhney in September 1990. The five-judge Constitutional Bench of the Supreme Court rendered a stay on the operation of the Government Order of implementing Mandal Report’s recommendations until the case is disposed of.

On 16th November 1992, the Hon’ble Supreme Court upheld the constitutional validity of Government Order and accepted that caste can be the basis of determining backwardness.  However, the Hon’ble Supreme rendered that overall reservation should not exceed 50% and also introduced the economic exclusion clause known as “Creamy Layer”.[4] The term “creamy layer” is used to refer to the slightly better off economically among the OBCs and to better off jatis among them.

The exclusion of the creamy layer from the beneficiaries of reservations is a constitutional requirement to be honored by the Central and State Governments.[5]

Standards of Exclusion

The National Commission for Backward Classes was created under an Act, as per the direction of the Supreme Court in Mandal Commission case. The Persons or sections to whom the rule of exclusion from reservation applies and they constitute Creamy Layer of the Society:

(A) Constitutional Posts

Son(s) and daughter(s) of
(a) President of India;
(b) Vice-President of India;
(c) Judges of the Supreme Court and of the High Courts;
(d) Chairman and Members of UPSC and of the State Public Service Commission; Chief Election Commissioner; CAG;
(e) Persons holding Constitutional positions of like nature.

(B) Service Category

I. Group A officers of the All India and State Services
II. Group B officers of the Central and State Service.

(C) Armed Forces (including Paramilitary Forces)

Son(s) and daughter(s) of parents either or both of whom is or are in the rank of Colonel and above in the Army and to equivalent posts in the Navy and the Air Force and the Para Military Forces.

(D) Professional Class & Industrialists

According to criteria specified in Category F, the following will come under the purview of Creamy Layer –
(I) Professionals such as the doctor, lawyer, chartered accountant, income tax consultant, financial or management consultant, dental surgeon, computer specialist, engineer, architect, film artists and other film professionals, author, playwright, sportsperson, sports professional, media professional or any other vocations of like status.
(II) Persons engaged in trade, business, and industry.

(E) Property Owners

I. Agricultural holdings: Son(s) and daughter(s) of persons belonging to a family which owns
(a) only irrigated land which is equal to or more than 85% of the statutory ceiling area, or
(b) both irrigated and unirrigated land (40%)
II. Plantations
(i) Coffee, tea, rubber, etc.
(ii) Mango, citrus, apple plantations, etc.

(F) Income/Wealth Test

Income or wealth is the most important criterion for exclusion. Persons who have the following criteria are to be excluded from the reservation. Son(S) And Daughter(S) of –
(a) Persons having a gross income of Rs.1 lakh or above or possessing wealth above the exemption limit as prescribed in the Wealth Tax Act for a period of three years.
(b) Persons in Categories A, B, C and E(I) who are not disentitled to the benefit of reservation but have income from other sources of wealth which will bring them within the income/wealth criteria mentioned in (a) above.
Interpretation
(i) Income from salaries or agricultural land shall not be clubbed;
(ii) The income criteria in terms of rupee will be modified taking into account the change in its value every three years. If the situation, however, so demands, the interregnum may be less.

The following table denotes the income limit for getting the benefits of reservation in government jobs and institutions –

Year

Family Income Per Annum

1993-2004

1 Lakh
2004-2008

2.5 Lakh

2008-2013

4.5 Lakh
2013-2017

6 Lakh

2017-till now

8 Lakh

[1] AIR 1993 SC 477.

[3] Id.

[4] Indra Sawhney v Union of India AIR 1993 SC 477.

[5] Id.

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