In this article, we will discuss the creamy layer in a simple and easy way and try to understand its various important aspects and facts.

This article is related to reservation, that is why in order to understand reservation, it becomes very important to understand it. You can use the given link to understand the reservation from zero level.

Reservation in India[1/4]
Constitutional basis of reservation and its various aspects[2/4]
Evolution of Reservation[3/4]
Roster – The Maths Behind Reservation[4/4]
Creamy Layer
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| What is Creamy Layer?

Creamy layer is a popular term in Indian politics used to refer to those members of the backward class who are socially and economically highly affluent.

We know that reservation is given to backward class under Article 15 and 16, which is an affirmative action to establish equality. For giving reservation, backward classes are classified on the basis of caste. But it is not necessary that all the people of a particular caste need reservation.

Even among the castes considered at the lower level in the society, there is some part of the people which is socially and economically prosperous. Secondly, by taking advantage of the reservation system that has been going on for decades, many backward castes or their people become relatively advanced.

In such a situation, in order to reach the right people of the backward castes, it becomes necessary that those people of those castes or classes who have been socially and economically advanced should be discouraged from reservation. And this is what the creamy layer system does.

| creamy layer background

Reservation for Scheduled Castes and Scheduled Tribes started from the time of independence. But the creamy layer does not apply to SC and ST category but it is applicable to OBC. The term “creamy layer” was first used by the Sattanathan Commission in 1971 to mean the exclusion of “creamy layer” from the quota for civilian posts.

Later in 1992, in the case of Indra Sawhney vs Government of India, the Supreme Court accepted the 27% reservation for OBCs, but at the same time added some conditions. One of which was the condition that the persons belonging to the creamy layer of OBC should be deprived of the facility of reservation.

Justice Ram Nandan Prasad Committee was formed with the objective of following this decision. In 1993, his report was accepted and the creamy layer system was introduced.

Overall, the point to be understood here is that (1) even though 27% reservation (quota) is prescribed for OBCs in government jobs and higher educational institutions, those who come under the ‘creamy layer’ do not get the benefit of this reservation. The creamy layer is identified on the basis of income and rank of the parents.

(2) People belonging to Scheduled Castes (SC) and Scheduled Tribes (ST) are exempt from this classification, and can always get the benefit of reservation, regardless of family income.

| People coming under creamy layer

Two types of people come under the creamy layer, first those who are not in government jobs. And secondly those who are in government jobs. For those who are not in government jobs, income is the main base of the creamy layer, while for those serving in government jobs, the position also matters.

(1) Those people who are not in government jobs –

The income criterion is defined as the gross annual income of the parents from all sources. However, there are some exceptions to this which we have discussed further.

When “Creamy Layer” was introduced in 1993, its limit was Rs 1 lakh. That is, a person earning 1 lakh or more annually or his children cannot take advantage of the 27% reservation available under OBC.

Revised to Rs 2.5 lakh per annum in 2004, Rs 4.5 lakh in 2008, 6 lakh in 2013 and increased to Rs 8 lakh in 2017. At present, the minimum annual rate of Rs 8 lakh is running.

[However, remember here that in October 2015, the National Commission for Backward Classes (NCBC) proposed that a person belonging to Other Backward Classes (OBC), whose parents’ gross annual income is up to Rs 15 lakh; should be considered as the minimum limit for OBC. The parliamentary committee also supported this and the government agreed to the limit of Rs 12 lakh, but it also wants to add agricultural income to the gross annual income. There is opposition from the MPs on this and the matter is in limbo.]

(2) Those people who are in government jobs –

For people working for the government, the Department of Personnel and Training (DoPT) has compiled a list of certain types of people (especially their children) who fall under the creamy layer;

(I) Children of persons holding constitutional posts will come under the creamy layer. Like President, Vice-President, Judges of Supreme and High Courts, Chairman and members of UPSC, Chairman and members of Election Commission etc.

(II) Children of Group A officers serving in the All India Service or in the Central Service or in the State Service shall come under the creamy layer. Such as IAS, IPS, IFos etc.

(III) Children of Group B officers serving in the Central Services or in the State Services will come under the creamy layer. Such as Chief Pharmacists, Income Tax officers, Superintendents of GST and Customs etc.

(IV) Persons working in Public Sector Undertakings (PSUs) also come under creamy layer. Along with this, people of similar level working in banks, insurance companies and universities also come in the creamy layer.

(v) Soldiers serving in the Armed Forces and Para-Military Forces serving in the rank of Colonel or above. His children will come under the creamy layer.

These were some of the important categories coming under the creamy layer, apart from this there are also categories which have been maintained by DoPT, if you want to know all then you can see the PDF given below.

Importants Facts

Children who come under the creamy layer because of the current status of their parents. They will still come under the creamy layer when their parents retire or die.

The creamy layer of a child is determined by the gross-annual income of the parent and not the child’s own income. This means that if the gross annual income of a parent is less than 8 lakhs but the annual income of his child is 8 lakhs, then that child will still come under non-creamy layer and will be able to avail the benefit of reservation.

| How is the creamy layer determined?

The creamy layer status of sons and daughters of persons working in organizations where the comparison of posts in Government has not been assessed is determined as under:

“The parents’ salary and income from other sources (other than salary and agricultural land) are determined separately. If the income from the salary of the parents or the income of the parents from other sources (other than salary and agricultural land) exceeds the limit of Rs.8 lakh per annum for a period of three consecutive years. So son and daughter will be considered in creamy layer.

But sons and daughters of parents whose salary income is less than Rs.8 lakh per annum. and income from other sources is also less than Rs.8 lakh per annum, it will not be considered in the creamy layer, even if the sum of income from salary and other sources exceeds Rs.8 lakh per annum for a period of three consecutive years.

It simply means that income from salary and income from agricultural land will not be taken into consideration for determining the creamy layer status of any candidate.

It means that if the parental income of a candidate is more than Rs.8 lakh per annum or income from agricultural land is more than Rs.8 lakh per annum. But the income from sources other than salary and agriculture is less than Rs.8 lakh. So on this basis the candidate will not be considered in the creamy layer. Provided that his parents do not hold property for a continuous period of three years in excess of the exemption limit prescribed in the Wealth Tax Act.

The Wealth Tax Act, 1957 was an Act of the Parliament of India. According to this, an individual, a Hindu undivided family or a company had to pay a wealth tax of 1% on income exceeding ₹30 lakh per annum. However, with effect from 1st April 2016, the Act has been repealed. And the wealth tax has been replaced by a levy which is applicable to individuals, firms, co-operative societies and local authority whose income exceeds ₹ 1 crore. Therefore, the above property tax does not make any sense.

| closing Remarks

Overall, there is a provision to increase the income limit by amending the creamy layer in 3 years. It was last revised in 2017. From that point of view, now the time has come to amend it. Soon we may get some new updates related to this.

As far as the matter of creamy_layer in the reservation of SC and ST remained; So let us tell you that in Jarnail Singh Vs Laxmi Narayan case (September 2018), the Supreme Court said, “Now, reservation in promotion cannot be given to the SC and ST category person who comes under the creamy layer.” And it is still in effect.

🔹 As we know now, In determining the creamy_layer eligibility for reservation of OBC, only the family income is taken as the basis, but whereas in deciding the eligibility for reservation of EWS, his family as well as his own income is taken as the basis.

🔹 Agricultural income and property like agricultural land and commercial land are also included in the eligibility for reservation of EWS, whereas agricultural income and related properties are not included in the determination of creamy layer of OBC.

🔹 There is no provision of creamylayer in SC and ST reservation like OBC.

Hope you have understood the whole concept of creamylayer, must read other articles related to reservation and send this article to the needy….!

Reservation in India[1/4]
Constitutional basis of reservation and its various aspects[2/4]
Evolution of Reservation[3/4]
Roster – The Maths Behind Reservation[4/4]

References,
PRS Legislative Report
https://www.bhaskar.com/obc-reservation-criteria-what-is-creamy
https://en.wikipedia.org/wiki/Creamy_layer
DoPT document
Original Constitution
DoPT Annual Report
Constitution of India
Commentary on constitution (fundamental rights) – d d basu