OBC Creamy Layer Status: Centre Seeks Clarification From Supreme Court For CSE 2025

The Supreme Court recently agreed to constitute a Special Bench to hear the Centre’s plea seeking clarification on whether its March 2026 verdict on OBC creamy layer criteria applies to the Civil Services Examination (CSE) 2025.

In March the Supreme Court had said that the purpose of excluding the “creamy layer” from OBC reservation is to ensure that socially advanced sections within the Other Backward Classes do not take away benefits meant for genuinely backward groups, and not to create artificial distinctions between people who are otherwise similarly placed.

In its application before the Supreme Court, the government has argued that the March 11 judgment “altering settled position” on creamy layer criteria was delivered five days after the final result of CSE-2025 had already been declared. It has said that CSE-2025 “stood substantially concluded prior to the pronouncement of the judgment” and is presently at the “terminal stage of service allocation”.

The Centre has further argued that a “mechanical or unqualified application of the ratio of the said judgment, with retrospective effect, to the already-concluded selection process of CSE-2025” would create “a peculiar and acute anomaly amounting to discrimination inter se candidates of the very examination cycle sought to be benefited”.

In the impugned decision, a Bench of Justices PS Narasimha and R Mahadevan upheld judgments of the Delhi, Madras and Kerala high courts, which had held that treating employees of private entities and PSUs differently from Government employees and their children for deciding reservation benefits would amount to hostile discrimination.

Court was hearing a batch of appeals filed by the Union government against high court judgments that had directed successful OBC candidates in the Civil Services Examination to be treated as falling within the non-creamy layer category. The bench held that deciding creamy layer status solely on the basis of income, without considering the categories of posts and status parameters laid down in the 1993 Office Memorandum (OM), is legally unsustainable.

It further said that giving excessive importance to a 2004 clarification letter, to the extent that income alone becomes the deciding factor without considering the parents’ status or category of service, would defeat the framework of exclusion envisaged under the 1993 OM. To be noted, the 1993 OM is the central policy document issued by the Union government on September 8, 1993 for identifying the “creamy layer” among OBCs and excluding them from reservation benefits. It was issued following the Supreme Court’s ruling in the case of Indra Sawhney v. Union of India and others [1992 Supp (3) SCC 217].

The 2004 letter was a clarification issued on October 14, 2004 by the Department of Personnel and Training (DoPT), working under Ministry of Personnel, Public Grievances and Pensions, regarding application of the creamy layer test where equivalence of PSU/private sector posts with government posts had not been determined. “Mere determination of the status of a candidate as to whether he/she falls within the creamy layer or the non-creamy layer of the OBCs cannot be decided solely on the basis of the income,” the Bench observed in the present matter.

Court said a combined reading of the 1993 OM and the October 14, 2004 clarification letter makes it clear that salary income alone cannot determine whether a candidate falls within the creamy layer. According to the Bench, the status and category of the posts held by a candidate’s parents are also important factors. It explained that exclusion under Categories I to III of the Schedule is based on status rather than purely on income, since advancement in the government service hierarchy is considered a sign of social progression, irrespective of fluctuating salary levels.

“The evolution of the non-creamy layer principle demonstrates that the 1993 OM read with the 2004 Letter, preserves the primacy of status based exclusion and confines economic exclusion to the structured parameters of Category VI. Salary income cannot be mechanically aggregated in a manner that defeats the constitutional objective articulated in Indra Sawhney,” Court said. The Bench also reiterated that any classification under Article 14 of the Constitution must satisfy two conditions: there must be a clear distinction between groups, and that distinction must have a rational connection with the objective sought to be achieved. “If similarly situated persons are subjected to differential treatment without a constitutionally sustainable basis, such action would fall foul of Article 14,” Court had said.