SC Rules Out Economic Criteria as the Only Basis of Determining the ‘Creamy Layer’


The Supreme Court (SC) recently held that the government cannot deny reservation benefits to someone belonging to a backward community solely on the ground that the person is rich.

While referring to the Indra Sawhney judgement of 1992, the SC bench comprising of Justice L. Nageshwar Rao and Justice Aniruddha Bose observed that the basis of exclusion from quota cannot be merely economic.

Higher employment in government services, social advancement, etc played an equally important role in deciding whether a person belonged to the creamy layer and could be denied reservation benefits, the bench said.

Case against Haryana government

The court made these observations hearing a petition challenging two notifications issued by the government of Haryana on 17 August, 2016 and 28 August, 2018 which sub-classified the backward classes only on economic basis while fixing the criteria for creamy layer.

These notifications were issued under the Haryana Backward Classes (Reservation in Services and Admission in Educational Institutions) Act, 2016.

As per the provisions of the act, families earning over Rs6 lakh annually were to be considered as ‘creamy layer’.

Moreover, the act stated that OBC families having annual income up to Rs3 lakhs would be preferred for reservation benefits first and the remaining quota would go to OBC families having annual income between Rs3 to 6 lakh.

The top court held that the Haryana government’s notifications violated the law declared in Indra Sawhney judgment by identifying creamy layer only on the basis of economic criteria.

The court directed the Haryana government to issue fresh notifications within three months. However, it did not disturb admissions to education institutions and appointments to government services decided on the basis of the two notifications.

What is Creamy Layer ?

The ‘creamy layer’ concept was introduced in SC’s Indra Sawhney verdict delivered by a 9-judge bench in 1992.

Though the SC upheld the government’s decision to provide 27% reservation to OBCs, the court found it imperative to identify sections among the backward classes who were already “highly advanced socially as well as educationally and economically.”

However, some States like Kerala did not implement the judgment. This led to the Indra Sawhney-II case in 2000 where the SC went to the extent of determining the ‘creamy layer’ among backward classes.

The court had explained that ‘creamy layer’ would include persons from backward classes who were appointed to posts in higher services like the All-India Services had attained a higher level of social advancement as well as economic status and thus, were not entitled to be treated as backward.

In the recent case well, Justice Rao explained that people with sufficient income and in a position to provide employment opportunities to others should also be considered to have reached a higher social status and thus, should be treated as ‘creamy layer’ outside the backward class.

He further explained that people from backward classes who had higher agricultural land holdings or were generating income from properties beyond a prescribed limit, do not deserve the benefit of reservation. The above-mentioned categories were necessarily to be excluded from backward classes.

Revising the criteria for Creamy Layer

The Department of Personnel and Training has stipulated that the criteria for defining creamy layer has to be revised every 3 years.

The first revision since September 1993 happened only in March 2004 followed by revisions In October 2008, May 2013.

The last revision in the criteria happened in September 2017 wherein the annual income limit for exclusion from reservation benefits was raised to Rs8 lakh.

It is more than three years now since the last revision and therefore, the issue was also raised during the recently concluded monsoon session of the Parliament.

Ayush Gala
Ayush Gala
Apart from being a percussionist and a cricket enthusiast, it's the unfolding tumultuous events of Geopolitics and International Relations that give me the adrenaline rush I crave for. And what better than sharing this adrenaline rush about these and various other topics with the people as well! And thus started my content writing journey, somewhat casually, but over time it's really become something I love doing! "Easy reading is damn hard writing" Well, thats always been my endeavour while writing, so that the readers not just consume, but absorb the content and derive utility from it!



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