Economic criterion not sole basis for creamy layer: SC

Context:

Haryana state government had recently issued two notifications under the Haryana Backward Classes (Reservation in Services and Admission in Educational Institutions) Act of 2016.

The notification had sub-classified backward classes solely on an economic basis while fixing the criteria for the creamy layer. Backward community members earning above ₹6 lakh annually were to be treated as ‘creamy layer’ as per the new criterion.

Relevance:

GS-II: Polity and Constitution (Constitutional Provisions, Fundamental Rights), GS-II: Social Justice and Governance (Issues related to Poverty, Government Policies and Initiatives)

Dimensions of the Article:

1. What is the Creamy Layer?
2. How is the Creamy Layer determined?
3. What did the SC rule?
4. Indra Sawhney Case

What is the Creamy Layer?

• Creamy Layer is a concept that sets a threshold within which OBC reservation benefits are applicable.
• While there is a 27% quota for OBCs in government jobs and higher educational institutions, those falling within the “creamy layer” cannot get the benefits of this quota.
• Creamy Layer is based on the recommendation of the Second Backward Classes Commission (Mandal Commission).
• The government in 1990 had notified 27% reservation for Socially and Educationally Backward Classes (SEBCs) in vacancies in civil posts and services that are to be filled on direct recruitment.
• After this was challenged, the Supreme Court in the Indira Sawhney case (1992) upheld 27% reservation for OBCs, subject to exclusion of the creamy layer.

How is the Creamy Layer determined?

• Following the order in Indra Sawhney, an expert committee headed by Justice (retired) R N Prasad was constituted for fixing the criteria for determining the creamy layer.
• In 1993, the Department of Personnel and Training (DoPT) listed out various categories of people of certain rank/status/income whose children cannot avail the benefit of OBC reservation.
• For those not in government, the current threshold is an income of Rs 8 lakh per year.
• For children of government employees, the threshold is based on their parents’ rank and not income.
• For instance, an individual is considered to fall within the creamy layer if either of his or her parents is in a constitutional post; if either parent has been directly recruited in Group-A; or if both parents are in Group-B services.
• If the parents enter Group-A through promotion before the age of 40, their children will be in the creamy layer.
• Children of a Colonel or higher-ranked officer in the Army, and children of officers of similar ranks in the Navy and Air Force, too, come under the creamy layer.
• Income from salaries or agricultural land is not clubbed while determining the creamy layer (2004).

Has it ever been revised?

• Other than the income limit, the current definition of the creamy layer remains the same as the DoPT had spelled out in 1993 and 2004.
• The income limit has been revised over the years.
• No other orders for the definition of the creamy layer have been issued.
• While the DoPT had stipulated that it would be revised every three years, the first revision since 1993 (Rs 1 lakh per year) happened only in 2004 (Rs 2.50 lakh), 2008 (Rs 4.50 lakh), 2013 (Rs 6 lakh), and 2017 (Rs 8 lakh).

What did the SC rule?

• The Supreme Court held that the government cannot deny reservation to a person belonging to a backward community solely on the ground that he or she is rich.
• The Supreme Court in the 1992 Indra Sawhney judgement had declared that the ‘creamy layer’ in a backward community should be excluded from reservation so as to ensure that the more deserving candidates are able to avail of reservation benefits.
• The Supreme Court had also clearly illustrated that ‘creamy layer’ would include persons who occupied posts in higher government services like IAS, IPS and All India Services and had reached a higher level of social advancement and economic status.

Indra Sawhney Case

Regarding cap on reservation quota

• The Supreme Court in the Indra Sawhney vs Union of India had ruled that the total number of reserved seats/places/positions cannot exceed 50% of what is available, and that under the constitutional scheme of reservation, economic backwardness alone could not be a criterion.
• While 50% shall be the rule, it is necessary not to put out of consideration certain extraordinary situations inherent in the great diversity of this country and the people.
• It might happen that in far-flung and remote areas the population inhabiting those areas might, on account of their being out of the main stream of national life and in view of conditions peculiar to and characteristic to them, need to be treated in a different way, some relaxation in this strict rule may become imperative.
• In doing so, extreme caution is to be exercised and a special case made out.

Regarding Promotions

• On June 17, 1995, Parliament, acting in its constituent capacity, adopted the seventy-seventh amendment by which clause (4A) was inserted into Article 16 to enable reservation to be made in promotion for SCs and STs.
• The validity of the 77th and 85th amendments to the Constitution and of the legislation enacted in pursuance of those amendments was challenged before the Supreme Court in the Nagaraj case.
• In its landmark 1992 decision in Indra Sawhney vs Union of India, the Supreme Court had held that reservations under Article 16(4) could only be provided at the time of entry into government service but not in matters of promotion.
• It added that the principle would operate only prospectively and not affect promotions already made and that reservation already provided in promotions shall continue in operation for a period of five years from the date of the judgment.
• It also ruled that the creamy layer can be and must be excluded.
• Upholding the validity of Article 16 (4A), the court then said that it is an enabling provision. “The State is not bound to make reservation for the SCs and STs in promotions.
• But, if it seeks to do so, it must collect quantifiable data on three facets — the backwardness of the class; the inadequacy of the representation of that class in public employment; and the general efficiency of service as mandated by Article 335 would not be affected”.
• The court ruled that the constitutional amendments do not abrogate the fundamentals of equality.

-Source: The Hindu