Govt Raised OBC ‘Creamy Layer’ Income Ceiling To Rs 8 Lakh From Rs 6 Lakh

The government has increased the creamy layer ceiling by Rs 2 lakh per annum on Wednesday, 23 August, and announced setting up of a commission to work out sub-categorisation with Other Backward Classes (OBCs) for a more equitable distribution of reservation benefits.

As per the report by The Indian Express, Finance Minister Arun Jaitley has said that the Union Cabinet was today formally apprised of the decision to hike the limit for the central government. The government also ruled out having a relook at the present reservation system. Earlier, this ceiling was Rs 6 lakh per annum.

He further said that recently in Assam, Prime Minister Narendra Modi had intimated that the bar defining creamy layer would be raised and the strategy of formally informing the cabinet about the decision was completed today.

The ministry of social justice and empowerment had proposed that OBC families who earn more than Rs 8 lakh per year should be classified as “creamy layer’, the ceiling which bars the members of the other backward classes from availing reservations in employment.

Mr Jaitley said, while responding to a question, that a proposal to extend the decision to public sector undertakings was under “active consideration” of the government.

He said that the 11 states of Andhra Pradesh, Telangana, Puducherry, Karnataka, Haryana, Jharkhand, West Bengal, Bihar, Maharashtra, Tamil Nadu and Jammu region only of Jammu and Kashmir have already carried out sub-categorisation of OBCs. He further explained, “There will be more equitable distribution amongst the OBCs themselves (of the benefits).”

There had been three revisions of the creamy layer bar. In 1933, it was fixed at Rs 1 lakh and increased to Rs 2.5 lakh in 2004 and Rs 4.5 lakh in 2008. The current income cap of Rs 6 lakh came into being in 2013.

The commission, to be set up under Article 340 of the Constitution, will submit its report within 12 weeks from the date its chairperson is appointed. A press release issued by the government says that the panel will examine the “extent of inequitable distribution of benefits of reservation among the castes and communities included in the broad category of OBCs, concerning to the OBCs that are included in the Central list.”

For the sub-categorisation within such OBCs, the panel will work out the mechanism, parameters, norms and criteria in a scientific approach, and the commission will also undertake an exercise of identifying the respective castes, communities, sub-castes, synonyms in the central list of OBCs and classifying them into their respective sub-categories.

In September 2015, RSS chief, Mohan Bhagwat had pitched for a review of the reservation policy, contending it has been used for political ends and suggested setting up of an apolitical committee to examine who needs the facility and for how long. However, Mr Jaitley said that there is no such proposal in front of the government, nor would there be in any in future.