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Why Haryana changed creamy layer rules for OBCs, and why Rs 6 lakh income cap is controversial

Haryana has said children of those earning over Rs 6 lakh annually will be part of the creamy layer, adding that it will be the sum of all sources of income. 

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Chandigarh: The Haryana government last week included non-economic criteria to define the ‘creamy layer’ for granting reservation to OBCs in government jobs and admissions to education institutions. 

In 2016, Haryana had shifted to a solely economic criteria to define ‘creamy layer’.  

The move comes in the wake of an August 2021 Supreme Court judgment that set aside the criteria being followed by Haryana, terming it “flagrant” and the result of a “grave error”.

In framing the non-economic criteria in a notification dated 17 November, the state government has followed the instructions issued by the Government of India in 1993 that listed people whose children fall in the creamy layer. 

This mainly included people in constitutional posts, including various categories of government servants.

For the economic criteria, Haryana has partially followed the instructions issued by the central government in 2013 that said children of those earning over Rs 6 lakh annually will be part of the creamy layer.

To assess how this Rs 6 lakh is to be calculated, the Haryana government has retained the contents of an August 2018 notification that said it will be the sum of all sources of income. 

This goes against the 2013 central government instructions that said salaries and agriculture income could not be clubbed for the purposes of calculating Rs 6 lakh.  

The move has invited the ire of the Opposition. Acoording to a report in The Hindu, state Congress chief Kumari Selja has objected to the calculation of income from all sources, saying the move exposed the “anti-reservation” mentality of the BJP. The leader alleged that this decision would leave many more people out of the ambit of reservation benefits.

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Creamy layer criteria

In wake of the Indra Sawhney case of 1993, the Government of India issued a detailed set of instructions on 17 August 1993 that described who all were to be included in the creamy layer.

These included: sons and daughters of those holding constitutional posts, Class I and II officers in central and state services, employees in public sector undertakings, armed forces, including paramilitary forces, and all those whose income was more than Rs 1 lakh a year for three consecutive years. The list also included agricultural land owners, with those owning plantations falling in a certain category. 

In calculating the annual Rs 1 lakh income, it was made clear in the 1993 instructions that salaries and agricultural income would not be clubbed together.

In June 1995, the Haryana government implemented the Union government’s instructions. Following reviews undertaken by the National Commission for Backward Classes (NCBC) in 2004, the Rs 1 lakh limit was increased to Rs 2.5 lakh and, in 2008, it was increased to Rs 4.5 lakh. 

In 2011, the NCBC recommended that the income criteria be increased to Rs 12 lakh in urban areas (metro cities) and Rs 9 lakh in other areas. However the central government did not accept this recommendation and, in 2013, increased the income limit to Rs 6 lakh, which was adopted by Haryana as well.

Deleting lists, creating sub-division

In 2016, after Haryana brought in its own Backward Classes Reservation Act, it did two things. First, it did away with the non-economic criteria, deleting entire lists of persons whose children form part of the creamy layer.  

Second, it created a sub-division within the Rs 6 lakh income criterion. A notification of 17 August 2016 issued by T.C. Gupta, the then principal secretary, welfare of Scheduled Castes and Backward Classes, stated that “children of persons having gross annual income of up to three lakh rupees shall first of all get the benefit of reservation in services and admissions in educational institutions”.

“The left out quota shall go to that class of backward classes of citizens who earn more than three lakhs but up to six lakh rupees per annum,” it added.

The August 2016 notification was challenged in 2018 in the Punjab and Haryana High Court by candidates seeking admission to an MBBS course. 

On 7 August 2018, a division bench of the high court headed by Justice Mahesh Grover set aside the notification on the ground that a “sub classification” of the backward classes is arbitrary and violative of Article 14 of the Constitution of India.

The Haryana government moved the Supreme Court, seeking a stay on the high court order, but the stay was declined on 28 August 2018.

On the same day (28 August), Haryana issued yet another notification, stating that the Rs 6 lakh gross annual income will be calculated by adding up all sources of income. 

The notification issued by Anil Kumar, the then principal secretary, welfare of Scheduled Castes and Backward Classes, had stated that the advocate-general, relying upon a judgment of the Punjab and Haryana High Court, decided that the criteria for computing annual income as prescribed shall include income from all sources.

Supreme Court intervenes

While adjudicating another case related to admissions under NEET 2018, the same high court division bench headed by Justice Grover on 31 August 2018 ruled in favour of not just the August 2016 notification it had set aside just a few weeks before, but also the new notification clubbing sources of income.  

This order of the division bench was challenged in the Supreme Court. On 24 August 2021, the court struck down the 2016 notification “in toto”, adding that since the 2018 notification was solely dependent on the 2016 notification, there was no need to adjudicate on it.

“The notification dated 17.08.2016 is in flagrant violation of the directions issued by this court in Indra Sawhney-I and is at variance with the memorandum dated 8.9.1993 issued by the Union of India. The criteria mentioned for identifying those persons who are socially advanced have not been taken into account by the government of Haryana while issuing the notification dated 17.08.2016,” said the judgment.

“The state of Haryana has sought to determine ‘creamy layer’ from backward classes solely on the basis of economic criteria and has committed a grave error in doing so. On this ground alone, the notification dated 17.08.2016 requires to be set aside,” the judgment added.

Also read: Modi govt all set to offer 27% OBC reservation in all-India quota medical seats

New Haryana creamy layer criteria

The Supreme Court asked the state government to issue a fresh notification within three months of its orders, and the 17 November notification followed.

Among those included in the creamy layer are children of those in constitutional posts like the President of India, the Vice-President of India, judges of the Supreme Court and high courts, chairman and members of the UPSC, and state public service commissions, MPs and MLAs.

Children of Group A and B officers (Class I and II) across India in central and state services or employees of public sector undertakings are also in the creamy layer. 

Children of those in the armed and paramilitary forces are included too. Children of a family that owns land more than that permitted under the Haryana Ceiling on Holdings Act also are in the creamy layer. The Act governs the amount of land an individual can own in the state.

Clubbing of incomes remains

Apart from these non-economic criteria, the notification lays down that children whose parents have over Rs 6 lakh gross annual income calculated from all sources of income will be in the creamy layer list.  

This has been drawn from the 2018 notification. 

“The 2016 notification was quashed, but nothing was said by the Supreme Court on the merits about the 2018 notification which we have retained,” said Vineet Garg, principal secretary, welfare of scheduled castes and backward classes, to ThePrint Tuesday.

The latest notification adds that the wealth possessed by parents of those seeking the reservation should not be more than Rs 1 crore for three consecutive years.

(Edited by Saikat Niyogi)

Also read: OBC sub-categorisation panel gets another extension, the 11th since March 2018


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