Why in news?

The central government is working on ensuring uniform application of the ‘creamy layer’ condition in OBC reservations across different sectors, including central and state government jobs, public sector enterprises, and universities.

A proposal—prepared after consultations with multiple ministries, NITI Aayog, and the National Commission for Backward Classes (NCBC)—seeks to address anomalies that have emerged from earlier Department of Personnel and Training (DoPT) circulars.

The move aims to ensure fairness and consistency in determining eligibility for reservation benefits, so that all deserving OBC candidates are treated equally across institutions and services.

What’s in Today’s Article?

• The Concept of ‘Creamy Layer’
• 2004 Clarification on Creamy Layer
• Efforts to Find ‘Equivalence’ in OBC Creamy Layer
• The Likely Beneficiaries of Proposed Changes

The Concept of ‘Creamy Layer’

• The idea of the creamy layer in OBC reservations originated from the Supreme Court’s Indra Sawhney vs UoI (1992) judgment.
• The Court upheld the Mandal Commission’s recommendations for OBC reservations but ruled that the more affluent and advanced sections among OBCs — called the creamy layer — must be excluded from quota benefits.
• Following this, the DoPT issued a circular in 1993 specifying who would fall under the creamy layer.
• Children of high constitutional functionaries, senior officers in government, PSUs, and armed forces (above certain ranks), as well as those in the professional class, trade, industry, or large property ownership, were excluded.
• The rules also specified that:
  • Children of parents directly recruited to Group A/Class I posts, or promoted to such posts before age 40, were ineligible.
  • Children of parents both recruited to Group B posts also came under the creamy layer.
  • In the armed forces, only children of officials up to the rank of Lieutenant Colonel could avail reservation.
  • For non-government employees, an income/wealth ceiling was applied.
    • Initially set at ₹1 lakh per year, this has been revised periodically and has stood at ₹8 lakh per annum since 2017.
    • Importantly, income from salaries and agriculture is excluded from this limit.
• Thus, the creamy layer framework ensures that reservation benefits go to the truly disadvantaged sections of OBCs and not to those who are already socially and economically advanced.

2004 Clarification on Creamy Layer

• In 2004, the DoPT recognised gaps in the 1993 criteria, particularly for jobs outside the government sector, and issued a detailed clarification in October 2004.
• This aimed to standardise how the creamy layer status was determined for children of those working in non-government organisations.
• The new rule specified that parental income from salary and other sources (excluding agriculture) would be calculated separately.
• If either income stream exceeded the then ceiling of ₹2.5 lakh annually for three consecutive years, the children would be deemed part of the creamy layer and ineligible for OBC reservation benefits.
• However, during 2004–14, these clarifications were not widely enforced.
• Stricter Enforcement Post-2014
  • In late 2014, DoPT began scrutinising caste certificates more rigorously to check their compliance with the 2004 clarification.
  • This led to significant consequences in recruitment processes.
  • Between the Civil Services Examinations of 2015–2023 (batches 2016–24), the DoPT rejected more than 100 caste certificates of candidates who otherwise qualified as OBCs under the 1993 norms but were categorised as creamy layer under the 2004 criteria.
  • Interestingly, many of these candidates were still accepted as OBCs in other competitive exams based on the same caste certificates, highlighting inconsistencies in enforcement across different recruitment processes.

Efforts to Find ‘Equivalence’ in OBC Creamy Layer

• The rejection of more than 100 OBC candidates’ caste certificates by DoPT (based on the 2004 clarification) created disputes.
• To address this, the government began consultations across ministries and institutions.
• The aim is to ensure uniformity and fairness in determining who falls under the creamy layer across sectors like universities, PSUs, and autonomous bodies.
• Key Proposals under Consideration
  • University Teachers - Since salaries of assistant professors and above start at Level 10, equivalent to Group A jobs, their children are proposed to be classified as creamy layer.
  • Autonomous and Statutory Bodies - Employees’ positions would be aligned with central government posts based on group, level, and pay scale, to establish parity.
  • University Non-Teaching Staff - Their creamy layer status will also be decided based on group/level/pay scale equivalence with government jobs.
  • State PSU Executives - Proposed to be treated as creamy layer, just like central PSU executives since 2017.
    • However, executives with income within ₹8 lakh (the ceiling for private sector persons) will not be classified as creamy layer.
  • Government-Aided Institutions - Employees will be placed under creamy layer or non-creamy categories depending on the equivalence of their posts, service conditions, and pay scales with central or state governments.

The Likely Beneficiaries of Proposed Changes

• Benefits for Government Employees’ Families
  • If the proposed reforms are implemented, the children of lower-level government employees with annual salaries above ₹8 lakh will gain the most.
  • This would correct anomalies where, for instance, children of government teachers enjoy OBC quota benefits, while children of employees in government-aided institutions of similar rank are excluded solely based on income.
• Addressing State-Level Anomalies
  • Similar inconsistencies exist in state government organisations.
  • In one highlighted case, the child of an employee working at a fuel pump run by a state-owned oil company was declared creamy layer based on income, despite the post being equivalent to lower-level government jobs.
• Limited Impact on Private Sector
  • For employees in the private sector, little change is expected.
  • The proposal acknowledges that establishing ‘equivalence’ in posts and pay in private jobs is extremely difficult due to wide variations.
  • Thus, their creamy layer status will continue to be decided only on the income/wealth test.