The Supreme Court of India ruled on March 11 that parental income alone cannot determine if an OBC candidate falls under the creamy layer, particularly for those whose parents work in public sector undertakings or private employment. This judgment addresses long-standing confusion over income calculations for reservation eligibility. It provides relief to affected candidates from civil services exams since 2015.
The Supreme Court delivered its judgment on March 11 in a case involving Other Backward Classes (OBC) candidates selected in Civil Services Examinations from 2015 onward. These candidates argued that the income/wealth test was misapplied to exclude them from OBC quota benefits. The ruling stems from the 1992 Indra Sawhney judgment, which introduced the creamy layer concept to exclude socially and economically advanced OBC families from reservations.
The Department of Personnel and Training (DoPT) issued an Office Memorandum in September 1993 outlining exclusion criteria. This included children of holders of constitutional positions, Class I and II officers in government, and armed forces personnel above certain ranks. For others, such as those in salaried professions, trade, or parents in Central/State public sector undertakings (PSUs) without established post equivalence to government roles, an income/wealth test applied.
The 1993 memorandum set the initial income threshold at Rs 1 lakh annually, excluding salary and agricultural income, revised to Rs 8 lakh in 2017. However, a 2004 DoPT letter suggested including salary income for PSU employees, creating confusion. A 2020 affidavit further obscured the application.
Justices P.S. Narasimha and R. Mahadevan held that until post equivalence is established, the income/wealth test applies as a residual filter, but salary and agricultural incomes remain excluded per the 1993 memorandum. The court criticized the 2004 letter for obfuscating the issue and causing hostile discrimination between government and PSU employees' children.
"Treating the children of those employed in PSUs or private employment... only on the basis of their income derived from salaries... would certainly lead to hostile discrimination," the judgment stated. It directs creation of supernumerary posts to accommodate eligible candidates, benefiting around 100 affected individuals and future applicants.
