Reservation in India: Jurisprudence of Creamy Layer and Arbitrary Yardsticks of Economical Wellbeing

  • Ayush Anand
  • 07:28 PM, 28 Nov 2021

On 16th November 1992, the Hon’ble Supreme Court in Indira Sahni & Others vs. Union of India 1992 Supp (3) SCC 217; while allowing the caste-based reservation, pronounced that caste is an important indicator of the backwardness.

However, it also directed the Central Government as well as the State Governments to specify the basis for applying the relevant and requisite socio-economic criteria to exclude advanced persons/sections, popularly known as Creamy Layer, from the OBCs. In the first Mandal case, a nine Judge bench of the Hon’ble SC has held by majority that the ‘Creamy Layer’ among the backward classes of citizen must be excluded by fixation of proper income, property or status criteria. Subsequently, an Expert Committee headed by the Justice Ram Nandan Prasad was constituted by the Government.

To make the issue clear, it is important to revisit the exact ratio passed by the Hon’ble SC in Indira Sawhney vs Union of India (UOI) and Ors. (Mandal I case) AIR 1993 SC 477 regarding the “Creamy-Layer” and “Means-test”:

“790. “Means-test” in this discussion signifies imposition of an income limit, for the purpose of excluding persons (from the backward class) whose income is above the said limit. This submission is very often referred to as the “creamy layer” argument.

793. Keeping in mind all these considerations, we direct the Government of India to specify the basis of exclusion - whether on the basis of income, extent of holding or otherwise - of “creamy layer”. This shall be done as early as possible, but not exceeding four months. On such specification persons falling within the net of exclusionary rule shall cease to be the members of the Other Backward Classes (covered by the expression “backward class of citizens”) for the purpose of Article 16(4)…

843. While dealing with Question No. 3(d), we held that that exclusion of “creamy layer” must be on the basis of social advancement (such advancement as renders them misfits in the backward classes) and not on the basis of mere economic criteria. At the same time, we held that income or the extent of property held by a person can be taken as a measure of social advancement and on that basis “creamy layer” of a given caste/community/occupational group can be excluded to arrive at a true backward class. Under Question No. 5, we held that it is not impermissible for the State to categorise backward classes into backward and more backward on the basis of their relative social backwardness. We had also given the illustration of two occupational groups, viz., goldsmiths and vaddes (traditional stone-cutters in Andhra Pradesh); both are included within “other backward classes”. If these two groups are lumped together and a common reservation is made, the goldsmiths would walk away with all the vacancies leaving none for vaddes. From the said point of view, it was observed, such classification among the designated backwards classes may indeed serve to help the more backward among them to get their due. But the question now is whether clause (i) of the Office Memorandum dated September 25, 1991 is sustainable in law. The said clause provides for preference in favour of “poorer sections” of the backward classes over other members of the backward classes. On first impression, it may appear that backward classes are classified into two sub-groups on the basis of economic criteria alone and a preference provided in favour of the poorer sections of the backward classes. In our considered opinion, however, such an interpretation would not be consistent with context in which the said expression is used and the spirit underlying the clause nor would it further the objective it seeks to achieve. The object of the clause is to provide a preference in favour of more backward among the “socially and educationally backward classes”. In other words, the expression “poorer sections” was meant to refer to those who are socially and economically more backward. The use of the word “poorer”, in the context, is meant only as a measure of social backwardness. (Of course, the Government is yet to notify which classes among the designated backward classes are more socially backward, i.e., “poorer sections”). Understood in this sense, the said classification is not and cannot be termed as invalid either constitutionally speaking or in law.

(5) There is no constitutional bar to classification of backward classes into more backward and backward classes for the purposes of Article 16(4). The distinction should be on the basis of degrees of social backwardness. In case of such classification, however, it would be advisable - nay, necessary - to ensure equitable distribution amongst the various backward classes to avoid lumping so that one or two such classes do not eat away the entire quota leaving the other backward classes high and dry. For excluding “creamy layer”, an economic criterion can be adopted as measure of social advancement.”

It is noteworthy that the expert Committee headed by Justice Ram Nandan Prasad, thus submitted its Report in 1993, which was accepted by the Govt. of India. The Report identifies the ‘creamy layer’ among the Socially and Educationally Backward Classes (SEBC) for excluding it from the list of Mandal beneficiaries. The Committee report states that only when the creamy layer is substantially and stably formed after crossing the Rubicon limit of social backwardness, then and then alone can it be made the basis for disentitlement.

Thus, the mandate was clear. Only ‘Caste’ cannot be an indicator of backwardness of an individual. The economically and socially developed group/class of any Caste should not be clubbed together with the actual backward group/class of that Caste, i.e., Non-Creamy Layer of the targeted group. Otherwise as rightly observed by the Hon’ble SC, it would turn the entire exercise into a futile one, if the affluent lot of the same Caste is allowed to avail the benefit meant for its backward class. 

Thereafter, following the directions and ruling of the Hon’ble SC, Govt. of India, modified the impugned OM dt. 13.08.1990 and 25.09.1991 and issued a revised OM No.36012/22/93-Estt. (SCT) on 8th September 1993. Para 2 (c)(i) of the OM makes the provision that the 27% reservation announced for the OBCs shall not apply to persons/sections mentioned in column 3 of the Schedule to the OM, thereby excluding the creamy layers from getting benefit out of it. It is based on the status of the parents and provides eight categories which have been considered as cream layer in case parents holds or belongs to any: 

I) Constitutional posts, 

II) Class I/A Govt. Services and similar PSUs cadre, or both parents from Class II/B Services before age of 40, 

III) Armed & Paramilitary forces in the rank of Colonel and above, 

IV) Professionals and Businessmen earning more than ₹8 Lakhs annually,

V) Property Owners, in case of Agricultural land holding irrigated land equal or more than 85% of the statutory area, and in case of plantation and buildings in urban area earning more than ₹8 Lakhs annually 

VI) INCOME/WEALTH TEST: Persons having gross annual income of ₹ 8 lakh annually. 

Therefore, the ceiling criteria and the schedule of exclusion for creamy layer as we saw predominantly designed and depends upon the wealth test and annual income of the parents.

TABLE: YEAR WISE CHANGE IN CREAMY LAYER CEILING LIMIT

Sr. No. Date of OM changing the ceiling of Income Wealth Test for Creamy Layer Ceiling Limit Inflation in percentage with respect to previous slab year Inflation linked Creamy layer ceiling ought to be taking ₹1 lakh annually in 1993 as base level

1. 08.09.1993 ₹1 lakh annually NA

2. 09.03.2004 ₹2.5 lakh annually 106.58% ₹2.06 lakh annually

3. 14.10.2008 ₹4.5 lakh annually 23.15% ₹2.53 lakh annually

4. 27.05.2013 ₹6 lakh annually 63.43% ₹4.13 lakh annually

5. 13.09.2017 ₹8 lakh annually 25.57% ₹5.18 lakh annually

6. ……….2021 (Proposed) ₹12 lakh annually 24.51% ₹6.44 lakh annually

(The limit was initially ₹1 lakh annually on 08.09.1993, when the OM issued which has been subsequently increased over the time up to ₹ 8 lakhs annually as of now and which is proposed now to again raise to ₹12 lakhs annually in the year 2021) 

The arbitrary increase in the ceiling limit is obvious from this table. As proposed this limit is all set to revise again to the level of ₹12 lakhs annually in the year 2021, which ought to be around half of this, i.e., ₹6.44 lakh annually, if we add the inflation rate to the ₹1 lakh annually limit for the year of 1993 to 2021. The irrational increase happened in the past also.

The most important indicator of backwardness within a Caste/Class is its family income and economic well-being. It is true because of the obvious social reasons, as we all are experiencing at present in our materialistic society due to Globalization, which is far-far distant from the old agrarian and feudal society. At present wealth controls the social order & status of someone in the society and therefore a person having financial resources is no longer facing any barrier for his or her development due to his or her backward Caste. 

SUBVERSION OF CREAMY LAYER (OBSERVATIONS AND AS HELD BY THE HON’BLE SC): 

The Hon’ble SC in Ashoka Kumar Thakur v. State of Bihar, (1995) 5 SCC 403 has correctly observed the destruction of this policy because of subversion of creamy layer and even struck down some of the arbitrary criteria to get included under non-creamy layer:

“2. A nine-Judge Bench of this Court in “Mandal case”— Indra Sawhney v. Union of India [1992 Supp (3) SCC 217] — authoritatively interpreted various aspects of Article 16(4) of the Constitution of India. While holding that Article 16(4) aims at group backwardness this Court came to the conclusion that socially advanced members of a backward class — “creamy layer” — have to be excluded from the said ‘class’. It was held that the ‘class’ which remains after excluding the “creamy layer” would more appropriately serve the purpose and object of Article 16(4).

3. The protective discrimination in the shape of job reservations under Article 16(4) has to be programmed in such a manner that the most deserving section of the backward class is benefited. Means test by which “creamy layer” is excluded, ensures such a result. The process of identifying backward class cannot be perfected to the extent that every member of the said class is equally backward. There are bound to be disparities in the class itself. Some of the members of the class may have individually crossed the barriers of backwardness but while identifying the class they may have come within the collectivity. It is often seen that comparatively rich persons in the backward class are able to move in the society without being discriminated socially. The members of the backward class are differentiated into superior and inferior. The discrimination which was practiced on them by the higher class is in turn practiced by the affluent members of the backward class on the poorer members of the same class. The benefits of social privileges like job reservations are mostly chewed up by the richer or more affluent sections of the backward class and the poorer and the really backward sections among them keep on getting poorer and more backward. It is only at the lowest level of the backward class where the standards of deprivation and the extent of backwardness may be uniform. The jobs are so very few in comparison to the population of the backward classes that it is difficult to give them adequate representation in the State services. It is, therefore, necessary that the benefit of the reservation must reach the poorer and the weakest section of the backward class. Economic ceiling to cut off the backward class for the purpose of job reservations is necessary to benefit the needy sections of the class. The means test is, therefore, imperative to skim off the affluent section of the backward class.

5. P.B. Sawant, J. spoke about the “creamy layer” in the following words: (SCC p. 554, paras 521-22)

“The correct criterion for judging the forwardness of the forwards among the backward classes is to measure their capacity not in terms of the capacity of others in their class, but in terms of the capacity of the members of the forward classes, as stated earlier. If they cross the Rubicon of backwardness, they should be taken out from the backward classes and should be made disentitled to the provisions meant for the said classes.

6. R.M. Sahai, J. held that the exclusion of “creamy layer” is a social purpose. Any legislation or executive action to remove such persons individually or collectively cannot be constitutionally invalid. The learned Judge elaborated his conclusions as under: (SCC p. 626, para 629)

“More backward and backward is an illusion. No constitutional exercise is called for it. What is required is practical approach to the problem. The collectivity or the group may be backward class but the individuals from that class may have achieved the social status or economic affluence. Disentitle them from claiming reservation. Therefore, while reserving posts for backward classes, the departments should make a condition precedent that every candidate must disclose the annual income of the parents beyond which one could not be considered to be backward. What should be that limit can be determined by the appropriate State. Income apart, provision should be made that wards of those backward classes of persons who have achieved a particular status in society either political or social or economic or if their parents are in higher services then such individuals should be precluded to avoid monopolisation of the services reserved for backward classes by a few. Creamy layer, thus, shall stand eliminated.”

15. This Court has categorically held in Mandal case that a person, belonging to a backward class, who becomes member of IAS, IPS or any other All India Service, his children cannot avail the benefit of reservation. The States of Bihar and Uttar Pradesh have added further conditions such as salary of rupees ten thousand or more per mensem, the wife or husband to be a graduate and one of them owning a house in an urban area. So far as the professionals are concerned, an income of Rs 10 lakhs per annum has been fixed as the criterion. It is further provided that the wife or husband is at least a graduate and the family owns immovable property of the value of at least rupees twenty lakhs. Similarly, the criteria regarding traders, industrialists, agriculturists and others is wholly arbitrary apart from being contrary to the guidelines laid down by this Court in Mandal case [1992 Supp (3) SCC 217] .

17. This Court in Mandal case has clearly and authoritatively laid down that the affluent part of a backward class called “creamy layer” has to be excluded from the said class and the benefit of Article 16(4) can only be given to the ‘class’ which remains after the exclusion of the “creamy layer”. The backward class under Article 16(4) means the class which has no element of “creamy layer” in it. It is mandatory under Article 16(4) — as interpreted by this Court — that the State must identify the “creamy layer” in a backward class and thereafter by excluding the “creamy layer” extend the benefit of reservation to the ‘class’ which remains after such exclusion. This Court has laid down, clear and easy to follow, guidelines for the identification of “creamy layer”. The States of Bihar and Uttar Pradesh have acted wholly arbitrary and in utter violation of the law laid down by this Court in Mandal case. It is difficult to accept that in India where the per capita national income is Rs 6929 (1993-94), a person who is a member of the IAS and a professional who is earning less than Rs 10 lakhs per annum is socially and educationally backward. We are of the view that the criteria laid down by the States of Bihar and Uttar Pradesh for identifying the “creamy layer” on the face of it is arbitrary and has to be rejected.

18. We, therefore, hold that the above-quoted criteria, for identification of “creamy layer”, laid down by the States of Bihar and Uttar Pradesh are violative of Article 16(4), wholly arbitrary — violative of Article 14 — and against the law laid down by this Court in Mandal case [1992 Supp (3) SCC 217].”

And here comes the most pertinent question, i.e., what should be the threshold to declare that someone belongs to “Non-Creamy Layer” based on family income and other factors. Considering based on family income, if someone’s family is not poor as per records of the Government of India and is paying income tax to the State and not within the exemption bracket, should the State extend the benefit of reservation only based on caste, which is only meant for backward and poorer classes of that caste. Should the State adopt a different and arbitrary yardstick of family income and economic wellbeing for certifying someone belonging to the Non-Creamy Layer? In a nutshell, based on family income what should be the “Rubicon Limit” of backwardness after which one should not be considered as backward. And what should be the first target population for implementing this benefit?

Wrong answer to this question is the biggest obstacle hampering the success of reservation system in India. It is the primary reason behind non percolation of the ‘Mandal’ benefits to the actual needy class/sub-castes of OBCs. And unfortunately, all the benefits of reservation are being eaten up by the upper layer of such backward castes as the Government failed to exclude them from ‘Non-Creamy Layer’. As per 2014 Report of Rangarajan Committee constituted for the Ministry of Rural Development, GOI per capita income of up to ₹11,664 and ₹16,884 annually is considered as poorer and below poverty line. But, as per the Ministry of Finance, individuals earning up to ₹2.5 Lakhs annually are exempted from paying Income Tax. So, the State considers that up to this slab, individuals are merely providing basic needs to the family and hence exempted from paying tax. However, the Government has fixed an annual income of ₹8 Lakhs for a family belongs to ‘Non-Creamy Layer’, which deserves the benefit of reservation!! 

So, now the ‘Rubicon Limit’ is ₹8 Lakhs to consider someone came out of backwardness. This is absurd and arbitrary and even ‘Sinho Commission Report’, the basis on which this criterion has been fixed in 2010, never been disclosed and secret till date. And after the Economic Weaker Section (EWS) quota of 10% for General Category granted on the same secret basis, it becomes more and more absurd. There is a complete loss of target and hence non-application of mind for this policy of exclusion and inclusion in the creamy layer. 

It has been done without even considering the coverage and fraction of population becoming eligible for the policy of reservation. Simply because now almost more than 95% of the Indian population are eligible for some quota or reservation benefits in India! Then, in this scenario what is the actual basis of stratification and quota, sadly, it becomes only and only caste. Rather than fulfilling the dream of Baba Saheb Ambedkar towards Annihilation of Caste, we are making caste system more and more prominent and politically relevant. It is further creating invisible rift and deeper divide in our society and simultaneously nowhere helping in removing backwardness from our society.

You cannot make a policy of positive discrimination under Article 15 and 16 of the Constitution for the benefit of SEBCs and make it available for almost entire population through different quotas and make it a case for representation in Government Jobs and Colleges based on caste wise demography. This has never been the constitutional scheme. The Hon’ble SC in Indira Sawhney (Supra) has held that:

“Para 599. It is necessary in this connection, to point out that not only Article 16(4) but for that matter, Article 335 also does not speak of giving proportional representation to the backward classes and SCs/STs respectively. …….. What was in the mind of the Constitution framers was the removal of the inadequacy in representation over a period of time, on each occasion balancing the interests of the backward classes and the forward classes so as not to affect the provisions of equality enshrined in Articles 14 and 16(1) as also the interests of the society as a whole. As pointed out earlier, Dr. Ambedkar was not only not in favour of proportional representation but was on the contrary, of the firm view that the reservations under Article 16(4) should be confined to the minority of the posts/appointments. In fact, as the debate in the Constituent Assembly shows nobody even suggested that the reservations under Article 16(4) should be in proportion to the population of the backward classes.”

This further dismantles the motive behind the demand of caste-based census & the release of its data thereafter. Any government policy or reservation cannot be based on caste alone and any attempt to give reservation quota in proportion to caste wise demography is impermissible. It is a clear and willful disregard of not only the ratio decided in Indra Sawhney case (Supra) and subsequent judgments permitting reservation but also a constitutional fraud being committed upon the needy & true SEBCs as the benefits meant for them is being made available for all because of this revised absurd limit of ₹8 Lakhs for the exclusion of “Creamy Layer”. Maliciously, this limit has been kept so that maximum population of the so-called backward castes and forward castes may avail the benefit of reservation. The element of exclusion is completely absent from this ceiling limit. 

For success of any reservation system, exclusion is the key. Supposedly, if you make a policy for the benefit of 40% of backward class of society, the benefit should reach only to those 40% of people. But, if the criteria for identification of the targeted 40% is flawed in such a manner that it covers more than 90% of the population, then it simply means there is no reservation at all based on backwardness. It will be an indirect abolition of reservation system. Without giving benefit to the needy, such reservation and quota system will further solidify the sentiments around the caste. And rather being constitutionally permitted class-based reservation, it is becoming an unconstitutional caste-based reservation, which is strictly prohibited under Article 15(1) of the Constitution. 

Poverty Estimation and Yardstick of Economic Wellbeing of a Person in India:

(Ref: Working Paper No. 1/2020, Ministry of Rural Development, GOI https://rural.nic.in/sites/default/files/WorkingPaper_Poverty_DoRD_Sept… )

 

Sr. No. Report and Estimations Year Criteria

1. Dadabhai Naoroji in his book, “Poverty and Un-British Rule in India” made the earliest estimation of poverty line.

1901 ₹16 to ₹35 per capita annually. The poverty line proposed by him was based on the cost of a subsistence or minimum basic diet.

2. National Planning Committee’s poverty line. 1938 ₹180 to ₹240 per capita annually (₹15 to ₹20 per capita per month)

3. The Bombay Plan proposed by a small group of influential business leaders in Bombay for the development of the post-independence economy of India. 1944 ₹75 per capita annually 

4. Planning Commission Expert Group 1962 ₹ 240 and ₹ 300 per capita annually

(₹20 and ₹25 per capita per month respectively, separate poverty lines for rural and urban areas) 

5. VM Dandekar and N Rath Committee They derived poverty line from the expenditure adequate to provide 2250

calories per day in both rural and urban areas. 1971 ₹180 and ₹270 per capita annually

(₹15 and ₹22.5 per capita per month for rural & Urban households at 1960‐61 prices)

6. Dr. Y. K. Alagh Committee 1979 ₹589 and ₹ 680 per capita annually

(₹49.09 and ₹56.64 per capita per month for rural and urban households at 1973-74 prices)

7. Lakdawala Expert Group 1993 It retained the separate rural and urban poverty lines recommended by the Alagh Committee at the national level based on minimum nutritional requirements.

8. Tendulkar Expert Group 2009 ₹ 9,792 and ₹ 12,000 per capita annually

(₹816 and ₹1000 per capita per month for rural and urban households at 2011-2012 prices)

9. Rangrajan Committee 2014 ₹11,664 and ₹16,884 per capita annually

(₹972 and ₹1407 per capita per month for rural and urban households at 2011-2012 prices)

 

However, considering a family of four person annual family income less than ₹46,656 and ₹67,536 for rural and urban households at 2011-2012 prices should be considered as below poverty. The inflation rate in India between 2011 and today has been 85.47%. This means that 100 rupees in 2011 are equivalent to 185.47 rupees in 2021. Adding up this average annual inflation rate of 5.78% annual family income less than ₹86,533 and ₹1,25,259 for rural and urban households respectively at 2021 prices should be considered as below poverty line who really needs State protection and affirmative action and should be the first target of this affirmative action. (Ref: https://www.inflationtool.com/indian-rupee/2011-to-present-value

 

Poverty Eradication and Social Protection 

Year                           Rural(%)                             Urban(%)                                         Total(%) 1993 – 94                       50.1                                     31.8                                                       45.3 2004 – 05                       41.8                                     25.7                                                       37.2 2009 – 10                       33.8                                     20.9                                                       29.8 2011 – 12                       25.7                                     13.7                                                       21.9 

 

Table: National poverty estimates (% below poverty line) during 1993-94 to 2011-12 

(Source: Poverty Estimates, 2011 – 12, Planning Commission; Report of the Expert Group to Review the Methodology for Estimation of Poverty (2009) Planning Commission; PRS)

 

Therefore, more than 1/5th of the population in India was poverty ridden on 2011-12. It might have increased after 2014 Report. As per the United Nation’s recent analysis in 2019, 28% of the population in India are estimated as poor.                  (https://www.downtoearth.org.in/blog/governance/mass-poverty-is-back-in-…

 

It is estimated that this number must have escalated due to pandemic and it is safe to assume now that at least 30% of total Indian population is poor and earning less than ₹86,533 and ₹1,25,259 for rural and urban households respectively at 2021 prices. Therefore, in any case a family earning more than approx. ₹1.5 Lakhs annually may be considered as above poverty line. And the first target for Mandal benefits should be those families which are earning less than ₹1.5 Lakhs annually, which is almost 30% of the population of India, i.e. around 40 crore Indian citizens.

 

Income tax slabs for resident individual below 60 years of age, non-resident individuals (NRI) irrespective of age and HUFs:

Income tax slabs and rates for FY 2020-21 and FY 2021-22

S. No. Total income

New tax regime

(Without deductions and exemptions) Number of Taxpayers out of population of 138 Crore Indians

(Based on FY 18-19)

1. Up to Rs 2.5 lakh NIL 1.03 Crores

2. From Rs 2,50,001 to Rs 5 lakh 5% 3.29 Crores

3. From Rs 5,00,001 to Rs 7.5 lakh 10% 1 Crore

4. From Rs 7,50,001 to Rs 10 lakh 15%

5. From Rs 10,00,001 to Rs 12.5 lakh 20% 46 Lakhs

6. From Rs 12,50,001 to Rs 15 lakh 25%

7. From Rs 15,00,001 and above 30%

 (https://economictimes.indiatimes.com/wealth/tax/latest-income-tax-slabs…)

Annual income slab from ₹2.5 lakhs to ₹8 lakhs is a taxable income for a Hindu undivided family and therefore, they should not be considered as poor and the yardstick of economic wellbeing is different here. And why the State should prefer someone in the matter of employment and education who is well to do and whose family is paying taxes to the Government? However, it is always prudent to make a yard stick in middle of the BPL annual income of a family and taxable slab of income for a family for targeted delivery of the benefit to the actual needy people living their life in actual backwardness and below poverty line and earning up to mere ₹1.5 lakhs annually. 

Now coming to the numbers of people paying income tax for earning more than ₹8 Lakhs or even ₹5 Lakhs annually. The total population of India as estimated in 2020 is 138 Crores. As per the data released by Income Tax department through their official twitter handle only 5.78 crore individuals filed returns disclosing income of financial year 2018-19, which also includes incorporated bodies and HUF. Out of these, 1.03 crore individuals have shown income below Rs 2.5 lakh & only 3.29 crore individuals disclosed taxable income between Rs.2.5 lakh to Rs.5 lakh. Therefore, out of 5.78 crore returns filed during the financial year, 4.32 crore individuals have disclosed income up to Rs 5 lakh. Further, around 1 crore individuals disclosed income between Rs. 5-10 lakh and only 46 lakhs individual taxpayers have disclosed income above Rs.10 lakh. Considering this raising the ceiling limit up to ₹12 Lakhs annually would be disastrous and non-sensical. 

 So, in a country of 138 crore people only 1.46 Crore individual taxpayers are earning more than ₹5 lakhs. Even if we consider a family of four where only one is earning, the total population of India having family income more than ₹5 lakhs is mere 5.84 crores. Therefore, keeping ₹8 Lakhs as upper level for non-creamy layer is highly unjustifiable, arbitrary and the biggest barrier in percolating the benefit to the actual needy class.

Therefore, out of total population of 138 crore, around 132 crores of Indians are having family income less than ₹ 5 lakhs and definitely this number will further increase if we calculate total number of Indians having family income up to ₹8 lakhs annually. So, in total 95.65% of the population are having family income less than ₹5 lakhs and more than 95.65% of the total population are eligible for reservation benefits in India! And please remember it is in a country where 30% of the population still living under below poverty line. 

If the permissible limit of reservation is 50% for socially and educationally backward classes then the benefit and target group should also be corresponding to that. Even if the criteria of non-creamy layer would have included 50% of the population it would be a just exclusion of creamy layer. But, alas vote bank politics just throttled the entire scheme and to appeases all, to get votes of all, the benefit has been extended to all in the name of politics of poor and backwards. Which means conversion of reservation quota on the basis of caste alone and not on the basis of backwardness of different castes. It is a shameful constitutional fraud being committed by all the political parties in India by supporting this arbitrary yardstick for determination of the creamy layer. 

Recently, even the Hon’ble SC questioned the logic behind arriving at the annual income ceiling of ₹8 lakh, where the Union has relied primarily on the Sinho Commission report but has also said that it is not the 'sole basis' for determining the income ceiling. In its affidavit Union has defended this arbitrary limit by stating that:

"The exercise conducted to determine the Creamy Layer for the purpose of OBC reservation would be equally applicable for determination of EWS category since the fundamental premise is that that if a person/his family have a substantial economic standing, he/she may not require the benefits of reservation at the cost of others".

But, the Union has miserably failed to consider that the total population eligible for such policy becomes around 96%!! Then what is the targeted population to which this policy intended to benefit over others? Is it roughly the entire population of India? If the entire population is the target of any policy of positive discrimination then what is the need for positive discrimination or reservation at all and who is being given preference over whom? 

 

ONLY REASONABLE CLASSIFICATION HAVING A NEXUS TO THE OBJECTS TO BE ACHIEVED IS PERMISSIBLE:

This unreasonable basis of classification based on up to ₹8 lakhs annual family income has no nexus with the object to be achieved. This policy primarily introduced to uproot the backwardness and to give opportunities to those who are unequal amongst the equals and cannot be treated equally with the others. This unreasonable classification treats the backward caste people living below poverty line having annual income less than ₹1.5 lacks annually equally with the backward caste people earning up to ₹8 lakhs!! This is wrong and malicious. The Hon’ble SC in State of Kerala v. N.M. Thomas, (1976) 2 SCC 310 has held that:

“21. Articles 14, 15 and 16 form part of a string of constitutional guaranteed rights. These rights supplement each other. Article 16 which ensures to all citizens equality of opportunity in matters relating to employment is an incident of guarantee of equality contained in Article 14. Article 16(1) gives effect to Article 14. Both Articles 14 and 16(1) permit reasonable classification having a nexus to the objects to be achieved. Under Article 16 there can be a reasonable classification of the employees in matters relating to employment or appointment.

24. Discrimination is the essence of classification. Equality is violated if it rests on unreasonable basis. The concept of equality has an inherent limitation arising from the very nature of the constitutional guarantee. Those who are similarly circumstanced are entitled to an equal treatment. Equality is amongst equals. Classification is, therefore, to be founded on substantial differences which distinguish persons grouped together from those left out of the groups and such differential attributes must bear a just and rational relation to the object sought to be achieved.”

CONCLUSION:

Any reservation policy where exclusion is missing and roughly entire population becomes eligible for reservation benefits is constitutionally not permitted. Any policy leading to positive discrimination must be reasonable and it must have nexus with the object it wishes to achieve. The present criteria of having family income up to ₹8 lakh (and the proposed revised limit up to ₹12 lakhs) annually to become eligible for non-creamy layer certificate is arbitrary and without application of mind as it roughly covers the entire population of India, i.e. around 96% and also not correct for keeping out the creamy-layer of the reserved categories (SEBCs & EWSs) from availing the benefit meant for non-creamy layers of the SEBCs and EWSs. Ideally drawing the middle line between the annual family income of a BPL family and a family earning below the taxable income slab should be considered, which might be more than half of the population of India. It is further advised that without targeting the population or section any such discriminatory benefit will never give the intended benefit. Absurdly, the present policy treats unequal as equals and the persons of a backward caste living below poverty line earning merely up to ₹1.5 lakhs annually should not be treated equally with the person earning up to ₹8 lakhs, it needs proper consideration. 

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