What is the news?
The Union government is considering raising the creamy layer income threshold for other backward classes (OBCs) beyond the current Rs 800,000 per annum.
The Union government is said to be considering raising the barrier to Rs 1.2 million, bringing more people under the OBC reservation who may have fallen beyond the income limit.
- Currently, OBCs are eligible for 27 percent of government positions and places in academic institutions; however, individuals with yearly family incomes exceeding rupees 8 lakh are deemed the “creamy layer” and are not eligible for these privileges.
- The income barrier is meant to be adjusted every three years; nevertheless, the most recent increase occurred in 2017, and the previous threshold was set at Rs. 6 lakh in 2013.
Government steps to hike the creamy layer
- Firstly, the Justice Rohini committee is debating the sub-categorization of OBC quotas, as well as whether or not any particular community or set of communities benefits the most from the quota, and how to address any irregularities.
- Secondly, the government also seeks to remove certain middle-class OBC persons working for the government and PSUs, whose children aspire to study at top government institutions like IITs and IIMs and gain government employment, by including wage income.
- Thirdly, the creamy layer threshold is currently calculated using high property income and revenue from entrepreneurial activities, but not salary income. So, the government is also considering that.
Counter-arguments on slab hike:
- There is however a counter-argument that a person making rupees 70,000 or rupees 80,000 per month is already powerful and should not be entitled to any form of reservation since it would be unfair to economically disadvantaged members of the community.
- According to Article 342A of the Constitution, states do not have the jurisdiction to keep a distinct state list of OBCs. According to the Supreme Court’s ruling, “For all purposes of the Constitution, the central list notified under Article 342A shall be the only list“.
Terms to know: Creamy layer