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New Delhi: The Narendra Modi government has recommended raising the income ceiling for the creamy layer of other backward classes (OBCs) from Rs 8 lakh to Rs 12 lakh per annum, ThePrint has learnt.

This means that if a household’s annual income is over Rs 12 lakh per annum, it will be ineligible for caste-based reservation in government jobs and admission to government-funded educational institutions under the OBC category.

According to two senior officials, the move has come after a government-appointed committee, to examine issues related to creamy layer equivalence among the socially and educationally backward classes (SEBCs), made two major recommendations.

In its report submitted on 19 September 2019, the committee proposed to include salaries in counting the gross annual income for determining the OBC creamy layer, and to raise the income ceiling from the present Rs 8 lakh.

It also proposed to include households with landholdings of over 10 hectares, of which at least 4 hectares is under irrigation, in the creamy layer.

B.P. Sharma, former secretary of the department of personnel and training, chaired the panel.

The ministry has now circulated a Cabinet note on the recommendations, seeking suggestions and inputs from other ministries. The matter will be tabled before the Union Cabinet soon wherein a final decision will be taken, the sources said.

The government had last increased the creamy layer income ceiling for OBCs in September 2017 — from Rs 6 lakh to Rs 8 lakh per annum.

Also read: EWS quota could soon get age and attempt relaxation like SCs, STs, OBCs

What the ministry discussed

During the Ministry of Social Justice and Empowerment’s discussions on the report, the committee pointed out that the current system is ambivalent as income from salary is not included in determining the creamy layer for the salaried class, said an official who didn’t wish to be named.

According to another senior official, the committee suggested two alternatives.

Firstly, it proposed to apply the gross annual income limit uniformly on all OBC categories, after excluding a few categories such as persons holding constitutional/statutory/senior government position.

This option also excluded households with a landholding of more than 10 hectares, of which at least 4 hectares is under irrigation, from the creamy layer.

“The committee has suggested that all taxable income, including salary, should be counted, which will remove the possibility of any discrimination; and will also be simpler,” said the second official who didn’t wish to be named.

The panel’s second option was to continue with the current system with certain modifications — wherein salary is not part of the total income.

The ministry chose to take the first option in its Cabinet note. Further, in view of the committee’s suggestion to raise the current income ceiling for creamy layer, the ministry proposed to increase it to Rs 12 lakh.

What the current rules say

The OBCs are entitled to 27 per cent reservation in government jobs and admission to educational institutions. However, the creamy layer among them is excluded from such benefits.

In the Mandal Commission case, the Supreme Court had said the creamy layer among the OBCs would not get reservation benefits, and asked the government to decide criteria for determining that.

Presently, those with annual parental income (excluding earnings from farming, agriculture land, etc.) of Rs 8 lakh and above are not eligible for reservation benefits.

Further, those who hold constitutional positions and enter Class-A positions in the government sector are automatically included in the creamy layer.

Also read: Final call on 10% EWS quota lies with states, can’t enforce it, Modi govt tells SC

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