CONCEPT OF CREAMY LAYER AND SUPREME COURT

The government announced a 27 per cent quota for Socially and Educationally Backward Classes (SEBCs) in vacancies in city offices and services that are to be filled by direct recruitment in August 1990, based on the proposal of the Second Backward Classes Commission (Mandal Commission).

Following a legal challenge, the Supreme Court affirmed the 27 per cent quota for OBCs in November 1992 (Indira Sawhney case), subject to the creamy layer's exclusion. 

OBC: PRESENT STATUS

Other Backward Classes (OBCs) in India makeup slightly less than half of the country's electorate and are a diverse group. The word "OBC" refers to a group of castes and communities that are socially and economically marginalised. There is currently no census on the population of OBCs. Before independence, only a caste data census (1931) was used to determine the total population percentage of sub-castes within other backward classes. For the first time in 90 years, OBCs will be counted in the next census.

CREAMY LAYER: CHARACTERIZATION

• INCOME BASIS: Income of more than Rs. 8 lakhs:

The current income threshold for people who are not in government is Rs 8 lakh per year. Every three years, the income level is expected to be increased. The last time it was updated was in 2017. (more than three years now). 

• PROSPERITY BASIS: Parents' position:

 The criterion for children of government employees is determined by their parents' rank rather than their parents' income. If one of a person's parents is in a constitutional position, if either parent has been directly recruited in Group-A, or if both parents are in Group-B services, that person is said to be in the creamy layer.

Their offspring will be in the creamy layer if their parents enter Group-A through promotion before the age of 40. Offspring of Army Colonels and higher-ranking officers, as well as children of Navy and Air Force officers of equivalent positions, fall under the creamy layer. There are many additional criteria to consider.

HAS IT EVER BEEN REVISED? 

Revising or making changes with changing circumstances is essential in almost every field of knowledge and resource. However, the last revision of the ‘Creamy layer’ concept was conducted more than three years ago. 

• Aside from the income limit, the current definition of the creamy layer is the same as it was in 1993 and 2004 according to the DoPT.
• Over time, the income limit has been adjusted.
• While the DoPT stated that it would be reviewed every three years, the first revisions since 1993 (Rs 1 lakh per year) occurred only in 2004 (Rs 2.50 lakh), 2008 (Rs 4.50 lakh), 2013, (Rs 6 lakh), and 2017 (Rs 6 lakh) (Rs 8 lakh).
• There have been no further orders for the definition of the creamy layer division of individuals.

WHY IN NEWS? 

The Supreme Court stated that economic criteria alone cannot be used to determine what constitutes a "creamy layer.". 

The State of Haryana has made a grave error in attempting to determine the 'creamy layer' from the backward classes solely based on economic criteria. The notification of August 17, 2016, must be set aside solely on this basis "Observed the Supreme Court”. 

A bench of Justices L. Nageswara Rao and Aniruddha Bose agreed and quashed a notification issued by the State of Haryana laying out the criteria for the exclusion of 'creamy layer' from the backward classes, dated 24^th August 2021, Tuesday. 

BACKGROUND FACTS: 

On August 17, 2016, the Haryana government published a notification outlining the criteria for excluding 'creamy layer' from the backward classes. According to the stated announcement, children of people with a gross yearly income of up to Rs. 3 lakh would be given priority in services and admission to educational institutions. The remaining quota would go to individuals from backward classes who earn more than Rs. 3 lakh but less than Rs. 6 lakh per year.

Section 5 of the Haryana Backward Classes (Reservation in Services and Admission in Educational Institutions) Act defines the 'creamy layer' like those from the backward classes who earn more than Rs. 6 lakh per year.

While hearing the case challenging the notification, the Punjab and Haryana High Court ruled that the government's sub-classification under the non-creamy layer group as yearly income below Rs 3 lakhs and annual income between Rs 3 -6 lakhs was unconstitutional. The High Court ruled that there was no evidence to support the non-creamy layer's sub-classification.

The notification was challenged in the Apex Court by a group called "Pichra Warg Kalyan Mahasabha Haryana." They argued that the Act requires that social, economic, and other aspects be considered when determining the criteria for exclusion and designation of those from the backward classes as 'creamy layer'. The notice is invalid since the same has not been done.

RELEVANCE OF INDRA SAWHNEY JUDGEMENT 

The court stated that the notification dated 17.08.2016 is in clear contravention of the orders granted in Indra Sawhney-I and contradicts the Union of India's communication dated 08.09.1993. and specifically stated that When the Government of Haryana issued the announcement dated 17.08.2016, the criteria specified for identifying socially advanced individuals were not taken into account."

The State Government adopted the criteria put out in the memorandum issued by the Union of India on 08.09.1993, which was in line with the directives granted by this Court in Indra Sawhney-I while issuing the notification dated 07.06.1995.

Even though Section 5(2) of the 2016 Act mandates that 'creamy layer' identification and exclusion be based on social, economic, and other relevant factors, the State of Haryana has attempted to define 'creamy layer' from backward classes solely based on economic criteria and has made a grave error in doing so. The notice dated 17.08.2016 must be set aside only on this basis. 

As a result of the entire dispute, the supreme court quashed the notification dated 17.08.2016, giving the State Government three months from today i.e., 24 August 2021, to issue a new notification, taking into account the principles laid down by this Court in Indra Sawhney-I and the criteria mentioned in Section 5(2) of the 2016 Act for determining 'creamy layer,'" the court noted.

Conclusively

Reservation is, by definition, a method of ending caste-based discrimination, which has existed in Indian society for thousands of years. Also, It is not a panacea for economic stagnation which disables the option of reservations for upper-caste members with low incomes. And, Reservation is intended to ensure that backward castes are fairly represented in public services, educational institutions, and legislatures, as well as receive a share of state power, which they have been denied throughout Indian history.

The British Raj did not specify income criteria when it reserved legislative seats for Dalits in 1937, as a result of a pact between Mahatma Gandhi and BR Ambedkar. The first administration of independent India did not impose such restrictions on Dalit and Adivasi reservations and many observers have claimed that requiring an economic cap for reservation misunderstands how caste works, claiming that Dalits and Adivasis endure prejudice regardless of their wealth or education.

All over, the judgement by the bench will certainly result in positive results and was immensely needed. This step would also ensure greater social justice and inclusion for members of the Other Backward Classes.