Economic criterion not sole basis for creamy layer

Context: Recently,Supreme Court held that states cannot make annual income the sole yardstick to determine “creamy layer”’ within a backward class and exclude them from benefits of reservation.

• The ruling came as it struck down a 2016 notification of the Haryana government denying benefits of reservation in government jobs and educational institutions to those among the backward classes who have an annual income of Rs 6 lakh or more.

About the Case

• The court was hearing a petition challenging some notifications by the Haryana government sub-classifying backward classes solely on economic basis while fixing the criteria for creamy layer.
• The notifications said children of persons having “gross annual income” of upto Rs 3 lakh annually would get the benefit of reservation in services and admission in educational institutions.
• The remaining quota would go to those from backward families, which earn between Rs 3 lakh and Rs 6 lakh per annum.
• The sections earning over Rs 6 lakh annually were considered as ‘creamy layer’ under Section 5 of the 2016 Act.
• The apex court held that the Haryana’s notifications have violated the law declared in the Indra Sawhney judgment by identifying creamy layer only on the basis of income.

SC remark

• The Haryana’s notifications have violated the law declared in the Indra Sawhney judgment by identifying creamy layer only on the basis of income.
• In spite of Section 5(2) of the 2016 Act making it mandatory for identification and exclusion of ‘creamy layer’ to be on the basis of social, economic and other relevant factors. 
• The State of Haryana has sought to determine ‘creamy layer’ from backward classes solely on the basis of economic criterion and has committed a grave error in doing so.
• The Supreme Court directed the State to issue fresh notifications in three months.
• It did not, however, disturb admissions to educational institutions and appointments to State government services made on the basis of the two notifications.

Additional Information
Indra Sawhney Judgement

• In the Indra Sawhney case 1992, the scope and extent of Article 16(4), which provides for reservation of jobs in favor of backward classes, was examined by the SC.
• Though the Court has rejected the additional reservation of 10% for poorer sections of higher castes, it upheld the constitutional validity of 27% reservation for the OBCs with certain conditions, viz,
• The prosperous sections among the OBCs (the creamy layer) should be excluded from the list of beneficiaries of reservation.
• No reservation in promotions; reservation should be confined to initial appointments Any existing reservation in promotions can continue for five years only (i.e., up to 1997).
• The total reserved quota should not exceed 50% except in some extraordinary situations.
• The ‘carry forward rule’ in case of unfilled (backlog) vacancies is valid. But it should not violate 50% rule.
• A permanent statutory body should be established to examine complaints of over-inclusion and under-inclusion in the list of OBCs. Accordingly, NCBC was estd. in 1993.

102nd Constitution Amendment Bill

• The 102nd amendment of 2018 deals with the constitutional status of the National Commission for Backward Classes.
• The 102nd Constitutional Amendment Act inserted the articles 338 B and 342 A. 
• It has brought about changes in Article 366.       
• Article 338B deals with the structure, duties and powers of the National Commission of Backward Class. 
• Article 342A (1):  Empowers the President to notify, in consultation with the governor, for each state and Union Territory, the list of socially and educationally backward classes. 
• Article 342A (2): Vests in Parliament the authority to include groups in the Central list or exclude them from it.

National Commission for Backward Classes

• It is a constitutional body.
• The backward class communities make up 52% of the population of India.
• In fact, the Supreme Court, in its final verdict in the Indira Sawhney (Mandal Commission) case, had directed all the establishment of the NCBC as a statutory body.
• The NCBC was set up under the National Commission for Backward Classes Act, 1993
• The NCBC was given limited powers - only to recommend to the government inclusion or exclusion of a community in the central list of OBCs.
• However, the power to hear complaints of the OBCs and also protect their interests remained with the National Commission for Scheduled Castes.

NCBC will have the powers of a civil court while investigating or inquiring into any complaints. These powers include: 

• summoning people and examining them on oath,
• requiring production of any document or public record, and
• receiving evidence.