By Sanjay Raman Sinha
When a bench of Justices PS Narasimha and R Mahadevan of the Supreme Court dismissed the Union government’s appeals in Union of India vs Rohith Nathan, it reignited a debate that has dogged India’s reservation policy for more than three decades: who exactly constitutes the creamy layer, and how should exclusion from Other Backward Classes’ (OBCs) benefits be determined?
The Court held that parental salary alone cannot determine creamy layer status for candidates whose parents work in public sector undertakings (PSUs) or the private sector. The status and category of the parent’s post must also be taken into consideration.
The dispute arose after civil services candidates were denied OBC reservation benefits because the Department of Personnel and Training (DoPT) had counted their parents’ salaries while determining creamy layer status. The Central Administrative Tribunal and the Madras, Kerala and Delhi High Courts had ruled in favour of the candidates. The Union government challenged those decisions in the Supreme Court, but failed to secure their reversal.
The judgment has once again brought into focus the fundamental distinction between income and social status, and the need to prevent relatively advanced sections within disadvantaged communities from monopolising the benefits of reservation.
It has been more than three decades since the creamy layer concept acquired legal significance in Indra Sawhney vs Union of India, following the political and social churn of the Mandal agitation. A nine-judge Constitution bench of the Supreme Court upheld the 27 percent reservation for OBCs, generally capped total reservations at 50 per cent except in extraordinary circumstances, and ruled that the creamy layer must be excluded from OBC benefits.
In his concurring opinion, Justice RM Sahai emphasised that the children of those who had acquired considerable political, social or economic status, or whose parents occupied higher positions in government services, should be excluded to prevent monopolisation of reserved posts.
The underlying idea was clear: reservation was intended to benefit the genuinely disadvantaged, not become a perpetual entitlement for relatively privileged sections within the targeted communities. Yet, despite periodic policy adjustments, the creamy layer mechanism has failed to prevent the disproportionate concentration of benefits among certain better-off sections.
The distinction between the status and category of a parent’s post, emphasised in the Indra Sawhney judgment and reaffirmed by the present bench, is central to the debate. Status refers to the social standing and position of authority or privilege associated with the post held by a parent. Income, on the other hand, is an economic indicator. The two may be related, but they are not interchangeable.
The Ram Nandan Prasad Expert Committee and the Government’s Office Memorandum of September 8, 1993, provided the framework for identifying the creamy layer. The framework relied primarily on social advancement arising from positions held by parents, with income and wealth serving as additional exclusionary criteria.
However, the income ceiling has become increasingly disconnected from economic reality. The original limit of Rs 1 lakh in 1993 was eventually raised to Rs 8 lakh in 2017. It has remained unchanged ever since, notwithstanding the 1993 order’s provision for periodic review, generally every three years.
Inflation has steadily eroded the real value of the threshold. Families whose economic circumstances would have placed them comfortably below the ceiling in 2017 may now cross it simply because of salary revisions and rising nominal incomes, without experiencing any comparable improvement in their actual economic position. More families are consequently being pushed above the exclusion threshold even as the underlying distribution of reservation benefits remains largely unchanged.
The problem is not merely the level of the income ceiling. It is also the unequal distribution of benefits among the hundreds of communities that constitute the OBC category.
The findings attributed to the Rohini Commission on OBC sub-categorisation expose the extent of this imbalance. Reportedly, 97 percent of central government jobs and admissions secured through OBC reservation went to just 25 percent of OBC sub-castes. Ten communities accounted for approximately 25 percent of the benefits, while 983 of the roughly 2,600 communities received no representation.
These figures point to a structural failure that cannot be corrected simply by raising or lowering the Rs eight lakh ceiling. An income threshold may help identify relatively affluent individuals within a community, but it cannot ensure that reservation benefits are distributed equitably among the different communities within the larger OBC category.
That requires sub-categorisation: dividing the reservation pool into smaller groups so that communities with little or no representation have a meaningful opportunity to benefit. Without such corrective measures, politically influential and relatively advanced communities are likely to continue dominating the available opportunities.
The debate has now extended beyond OBC reservations to Scheduled Castes (SCs) and Scheduled Tribes (STs).
In August 2024, a seven-judge Constitution bench of the Supreme Court, in State of Punjab vs Davinder Singh, overruled the earlier EV Chinnaiah judgment and held that states could sub-classify Scheduled Castes for the purpose of distributing reservation benefits more equitably. Four of the seven judges also favoured identifying and excluding a creamy layer among SCs and STs.
Justice BR Gavai observed that the State should formulate a policy to identify the relatively advanced sections and deny them further benefits so that the most disadvantaged could receive a fair share. The Union government, however, has opposed extending an income-based creamy-layer test to SC/ST reservations, arguing that the Constitution does not provide for such an exclusion.
The larger constitutional and political question remains unsettled: should the principle of excluding relatively advanced sections be confined to OBCs, or should it apply, in an appropriately calibrated form, to all categories benefiting from affirmative action?
Meanwhile, political expediency has put increasing pressure on the conventional 50 percent reservation ceiling. Tamil Nadu has a 69 percent reservation framework, Bihar has legislated for 65 percent, Telangana has a 67 percent framework and Karnataka has a 56 percent reservation structure. These arrangements have differing legal statuses, but they illustrate the political pressure to expand quotas beyond the conventional limit.
Proponents of reservation argue that caste-based discrimination and historical exclusion cannot be adequately addressed through income-based tests. An excessively restrictive creamy-layer criterion, they contend, could penalise families that continue to face social discrimination despite modest economic advancement. It could also leave reserved vacancies unfilled.
There is merit in the argument that economic mobility does not automatically erase caste-based disabilities. Nor can a salary figure capture the discrimination, social exclusion and structural disadvantages that reservation seeks to address.
There is also a practical problem with relying exclusively on salary. The earnings of employees in lower-level positions, such as clerks and typists, may rise with seniority and routine pay revisions. A salary-based test could, therefore, exclude their children without establishing that the family has acquired the social status or privilege that the creamy-layer principle was originally intended to capture.
The creamy layer has, in effect, become a negative filter operating with an outdated income ceiling, inadequate contemporary caste data and an insufficiently nuanced understanding of social and economic advancement. It can determine marginal cases, but cannot, by itself, ensure that reservation reaches the most disadvantaged.
Reforming India’s reservation framework requires more than tinkering with the income ceiling. It demands reliable data, transparent criteria and the political will to confront entrenched inequalities within beneficiary communities.
The publication of comprehensive caste data from the 2027 Census could provide an essential empirical foundation for reform. It would help establish which communities have benefited disproportionately, which remain under-represented and where corrective sub-categorisation is necessary.
The Rs eight lakh ceiling also needs a rational and transparent review mechanism, preferably linked to inflation through a predetermined formula rather than left to periodic political discretion. Equally important is the need to move beyond a salary-centric assessment. Parental occupation, position in public or private employment, landholdings, accumulated wealth and educational and social advancement could all form part of a more comprehensive assessment, with clearly defined safeguards against arbitrary exclusion.
Sub-categorisation, or quotas within quotas, for OBCs and potentially SCs is another reform that deserves serious consideration in the light of the constitutional position emerging from Davinder Singh.
Ultimately, affirmative action cannot fulfil its constitutional purpose if its benefits are repeatedly captured by the same relatively privileged sections while the most disadvantaged remain at the margins.
But meaningful reform carries political costs. OBCs constitute a substantial proportion of India’s population and represent an influential electoral constituency. No political party wants to antagonise dominant OBC communities by redistributing reservation benefits. Nor does any party wish to be seen as diluting the rights of Dalit voters by introducing a more stringent exclusionary framework.
Consequently, reforms that require difficult choices are repeatedly deferred in favour of political expediency and compromise.
The real challenge is not to dismantle reservation, but to make it more equitable, evidence-based and faithful to its original purpose. Until political parties are willing to confront the unequal distribution of benefits within beneficiary communities, the creamy layer will remain less an instrument of social justice than a reminder of how readily its promise can be compromised.
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