The ‘creamy layer’ and exclusion from reservation

POLITY/ GOVERNANCE

• GS-2: Polity, Fundamental Rights & Welfare State.
• GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation

The ‘creamy layer’ and exclusion from reservation

Story so far:  For nearly 30 years, the Supreme Court has stood firmly by its principle that economic criterion alone cannot be the sole basis for identifying a Backward Class member as “creamy layer”. Other factors like social advancement, education, employment, too, matter. 

Recent SC Judgement

• In 2016, Haryana State government had issued notifications under the Haryana Backward Classes (Reservation in Services and Admission in Educational Institutions) Act of 2016.
• The notification identified as “creamy layer” Backward Class members whose gross annual income exceeded ₹6 lakhs.
• It said Backward Class sections whose families earn less than ₹3 lakh would get priority over their counterparts who earn more than ₹3 lakh but less than ₹6 lakh.
• These notifications were challenged in Supreme Court.
• Supreme Court said that the basis of exclusion of creamy layer cannot be merely economic.
• SC struck down the notifications as a “flagrant violation” of the 2016 Act and said Section 5 (2) of the Act required the State to consider social, economic and other factors together to identify and exclude Backward Class members as “creamy layer”.

What is the creamy layer concept? 

• The creamy layer concept was introduced in the Supreme Court’s Indra Sawhney judgment, delivered by a nine-judge Bench on November 16, 1992. 
• Though it upheld the government’s decision based on the Mandal Commission report to give 27% reservation to Other Backward Classes, the court found it necessary to identify sections of Backward Classes who were already “highly advanced socially as well as economically and educationally”. 
• The court believed that these wealthy, advanced members form the “creamy layer” among them. 
• The judgment directed State governments to identify the “creamy layer” and exclude them from the purview of reservation.

Need for identifying creamy layer

• In Jarnail Singh versus Lachhmi Narain Gupta, 2018 case, Justice Nariman said unless creamy layer principle was applied those genuinely deserving reservation would not access it. 
• He further observed that the creamy layer principle was based on the fundamental right to equality.
• Benefits, by and large, are snatched away by the top creamy layer of the ― backward caste or class, thus keeping the weakest among the weak always weak and leaving the fortunate layers to consume the whole cake.

How is the creamy layer determined?

• Certain States like Kerala did not promptly implement the above SC directive (identifying Creamy layer & excluding them). This led to a sequel of the Indra Sawhney-II case, reported in 2000.
• Here, the court went to the extent of determining “creamy layer” among Backward Classes. 

• The judgment held that persons from the classes who occupied posts in higher services like IAS, IPS and All India Services had reached a higher level of social advancement and economic status, and therefore, were not entitled to be treated as backward. Such persons were to be treated as “creamy layer” without any further inquiry. 

• Likewise, people with sufficient income who were in a position to provide employment to others should also be taken to have reached a higher social status and treated as “outside the Backward Class”.
• Other categories included persons with higher agricultural holdings or income from property, etc.
• Thus, a reading of the Indra Sawhney judgments show that social advancement, including education and employment, and not just wealth, was key to identify “creamy layer”.

Why is identifying creamy layer solely on economic criterion not feasible?

• The identification has been a thorny issue. The basic question here is how rich or advanced should a Backward Class section be to invite exclusion from reservation.
• In other words, it is question of “how and where to draw the line” between the deserving and the creamy layer becomes challenging when economic criteria is the sole basis of identification.
• Justice Reddy in the Indra Sawhney judgment, highlighted the pitfalls of identifying creamy layer merely on economic basis. 
  • For example, a person who earns ₹36,000 a month may be economically well-off in rural India. However, the same salary in a metropolitan city may not count for much.
  • A member of Backward Class, say a member of carpenter caste, goes to Middle East and works there as a carpenter. If we take his annual income in Rupees, it would be fairly high from the Indian standard. There is dilemma whether he is to be excluded from the Backward Class when only economic criteria is considered.
• Justice Jeevan Reddy pointed out “The basis of exclusion should not merely be economic, unless, of course, the economic advancement is so high that it necessarily means social advancement.”

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