Explained: Haryana’s latest OBC ‘creamy layer’ order and why it has triggered a row

What is the creamy layer?

The creamy layer is a category of people among OBCs who fall in a higher income category and are therefore excluded from availing the benefits of the 27 percent reservation in jobs and education meant for OBCs in government jobs and higher educational institutions.

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For those not in government, the current threshold is an annual income of Rs 8 lakh. For children of government employees, the threshold is based on their parents’ rank and not income

What does the latest notification say?

The gazette notification issued by the Haryana government’s Welfare of Scheduled Castes and Backward Classes Department on November 17 specifies the “criteria for exclusion of persons within the Backward Classes as Creamy Layer.”

The order has divided the ‘exclusion’ criteria (as creamy layer) into five categories. Those excluded as 'creamy layer' category include children of people in constitutional posts or children of constitutional personalities. Similarly, children whose parents are Class I or Class II officers or employees in Public Sector Undertakings have been excluded from the benefits of reservations as well. Children of Armed Forces personnel, including paramilitary forces, are also in the exclusion list.

In addition, the order excludes son(s) and daughter(s) from a family (father, mother and minor children) that owns more land than permissible under the Haryana Ceiling on Land Holdings Act, 1972.

The Rs 6 lakh annual income cut-off

In the fifth and last category, the government has included salary and agricultural earnings in the calculation of whether someone belongs to the creamy layer or not. Income from all sources shall be clubbed to arrive at the gross annual income, it says.

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Son(s) and daughter(s) of parents having a gross annual income of Rs 6 lakh or above or of those possessing wealth above Rs 1 crore for the last three consecutive years come under the ‘creamy layer’, reads  the order.

Earlier order struck down by Supreme Court

The new notification comes less than three months after the Supreme Court quashed a similar notification by the Haryana government specifying the criteria for exclusion of the ‘creamy layer’ within backward classes.

The top court had said on August 24 that “economic criterion cannot be the sole basis for identifying the creamy layer.” A bench of Justices L Nageswara Rao and Aniruddha Bose delivered the judgment on a batch of pleas challenging a 2016 notification of the Haryana government specifying the criteria for exclusion of the 'creamy layer' within the backward classes.

The Supreme Court noted that the 2016 notification was in violation of the directions issued by the apex Court in the Indra Sawhney-I judgment and was at variance with the Union government order issued on September 8, 1993, according to a report on legal news website Bar & Bench.

The court asked the Haryana government to issue a fresh notification under the 2016 Act within three months after duly following the principles laid down in the Indra Sawhney judgment to determine the creamy layer.

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In the 1992 Indra Sawhney case verdict, the Supreme Court, while denying OBC reservation benefits to a “creamy layer”, had said income from salary and agriculture cannot be considered while identifying the creamy layer.

The 1993 guidelines

The Department of Personnel and Training (DoPT) had laid down categories under the creamy layer in 1993 after the 1992 Supreme Court order. Under those norms, sons and daughters of Group A / Class I Officers of All India Central and State Services (direct recruits), Group B / Class II Officers of Central and State Services (direct recruits), employees of PSUs etc. and the armed forces fall within the creamy layer. Therefore, they are not entitled to reservation benefits.

The government had included sons and daughters of people with a gross annual income of Rs 1 lakh or above or possessing wealth above the exemption limit prescribed under the Wealth Tax Act for a period of three consecutive years within the creamy layer. But, it clarified that income from salaries and agricultural land would not be clubbed.

In 1993, the upper limit for annual income was Rs 1 lakh. It has been raised four times since – to Rs 2.5 lakh in 2004, Rs 4.5 lakh in 2008 and Rs 6 lakh in 2013 and to Rs 8 lakh per annum in 2017.

The centre told Rajya Sabha in August that it was considering revision of income criteria to determine OBC creamy layer.

Political row

Haryana Congress president Kumari Selja alleged that the new norms would deprive children of Group ‘D’ government employees, farmers and skilled workers of the benefits of reservation, according a report in the Hindu.

“The annual income from all sources had been fixed at Rs 6 lakh, taking away the right of reservation of children of Group “D” employees, farmers and others,” she said.

Selja said the new notification is misleading and unconstitutional. “This notification is a copy of the notification recently cancelled by the Supreme Court, and is in direct contempt of the orders of the apex court,” she asserted.