Source: The Hindu 

Introduction 

Recent allotment to the IAS under OBC Non-Creamy Layer candidate with multiple disabilities has sparked debate about the creamy layer concept in OBC reservations. The controversy centers on whether individuals from relatively privileged backgrounds within OBCs should benefit from reservations, especially when they have additional qualifying factors like disabilities. This case has reignited discussions about the effectiveness and fairness of the current reservation system, particularly the creamy layer exclusion criteria for OBCs. 

What are the Key Issues and Criticisms Facing the Current Reservation System? 

• Allegations of fraudulent obtainment of Non-Creamy Layer (NCL) or Economically Weaker Section (EWS) certificates have emerged. 
• Similar concerns exist regarding the potential misuse of disability certificates to access the 4% reservation for persons with disabilities in central government jobs. 
• Some applicants and their parents are accused of adopting strategies to circumvent creamy layer exclusion, such as gifting assets or taking premature retirement. 
• The current system does not consider the applicant's or their spouse's income for creamy layer exclusion, only parental income. 
• The Rohini Commission has highlighted a significant concentration of reservation benefits among OBCs, with 97% of reserved jobs and educational seats going to just 25% of OBC castes/sub-castes at the central level. 
• Nearly 1,000 out of 2,600 OBC communities have zero representation in jobs and educational institutions. 
• Similar concentration issues exist within SC and ST categories, which do not have a creamy layer exclusion. 
• The total reservation currently stands at 60%, including the EWS quota. 
• Despite the high percentage, 40-50% of seats reserved for OBC, SC, and ST in the central government remain unfilled, according to government data presented in Parliament. 
• There is a debate on whether the current reservation percentage is necessary given societal realities. 
• The system faces criticism for not effectively addressing representation across all backward communities. 
• There are calls for re-evaluation and potential reforms to make the reservation system more equitable and effective. 

How Has the Concept of Reservation Evolved in India Over Time? 

• The concept of reservation in India predates independence, with some princely states implementing quotas for backward classes. 
• The Constitution of India, adopted in 1950, enshrined the principle of equality while also allowing for special provisions for disadvantaged groups. 
• Articles 15 and 16 of the Constitution guarantee equality to all citizens but also enable special provisions for socially and educationally backward classes, Scheduled Castes (SC), and Scheduled Tribes (ST). 
• Initially, reservations were fixed at 15% for SC and 7.5% for ST in central government jobs, educational institutions, and public sector undertakings. 
• The First Backward Classes Commission, known as the Kaka Kalelkar Commission, was established in 1953 but its recommendations were not implemented. 
• The Second Backward Classes Commission, led by B.P. Mandal, was set up in 1979 and submitted its report in 1980. 
• The Mandal Commission recommended 27% reservation for Other Backward Classes (OBCs) in central government services and public sector units. 
• In 1990, Prime Minister V.P. Singh implemented the Mandal Commission's recommendations, leading to widespread protests and debates. 
• The Supreme Court, in the Indra Sawhney case of 1992, upheld the constitutionality of OBC reservations but capped total reservations at 50% and introduced the concept of the "creamy layer" for OBCs. 
• In 2005, the 93rd Constitutional Amendment enabled reservations for OBC, SC, and ST in educational institutions, including private institutions. 
• The Central Educational Institutions (Reservation in Admission) Act, 2006, provided for 27% reservation for OBCs in central educational institutions. 
• In 2019, the 103rd Constitutional Amendment introduced 10% reservation for Economically Weaker Sections (EWS) among the unreserved category. 
• Over the years, various states have implemented their own reservation policies, often exceeding the 50% cap set by the Supreme Court. 

What is the Creamy Layer Concept and How is It Defined and Applied? 

Definition and Purpose: 

• The creamy layer concept sets a threshold within which OBC reservation benefits are applicable. 
• It aims to exclude relatively well-off individuals from the OBC category from availing reservation benefits. 
• The concept was introduced by the Supreme Court in the Indra Sawhney case (1992) to ensure that reservation benefits reach the truly disadvantaged. 

Income Criteria: 

• The current income threshold for the creamy layer is Rs 8 lakh per year. 
• This limit applies to income from sources other than salary and agricultural income. 
• The income threshold is supposed to be revised every three years but was last updated in 2017. 

Other Criteria: 

• For children of government employees, the creamy layer is determined by their parents' rank rather than income. 
• Children of parents in constitutional posts, directly recruited Group-A officers, or both parents in Group-B services fall under the creamy layer. 
• Children of high-ranking military officers (Colonel and above or equivalent) are also considered part of the creamy layer. 

Proposed Changes: 

• The government is considering raising the income threshold to Rs 12 lakh per year. 
• A parliamentary committee has recommended increasing it to Rs 15 lakh per year. 
• There are proposals to include salary in the income calculation but continue excluding agricultural income. 

What are the Main Issues and Loopholes in the Reservation System? 

• Fraudulent obtainment of Non-Creamy Layer (NCL), Economically Weaker Section (EWS), and disability certificates. 
• Inadequate scrutiny of eligibility for reservation benefits. 
• Strategies to circumvent creamy layer exclusion, such as asset gifting or premature retirement by parents. 
• Lack of consideration of the applicant's or spouse's income in creamy layer determination. 
• Concentration of benefits among a small percentage of OBC castes/sub-castes. 
• Absence of creamy layer concept for SC and ST categories. 
• Persistent unfilled vacancies in reserved seats, despite high reservation percentages. 
• Lack of sub-categorization within reserved categories, leading to underrepresentation of certain communities. 
• Potential misuse of disability certificates to access reserved seats. 
• Insufficient mechanisms to ensure benefits reach the most marginalized within underprivileged groups. 
• Absence of regular reviews and updates to the list of backward classes and income thresholds. 
• The lack of a comprehensive system to track and prevent multiple generations of a family from continuously benefiting from reservations. 

What is the Judicial View Regarding Reservation? 

• The State of Madras v. Smt. Champakam Dorairajan (1951) case was the first major Case of the Supreme Court on the issue of Reservation. The case led to the First Amendment in the constitution. 
  • The Supreme Court pointed out that while in the case of employment under the State, Article 16(4) provides for reservations in favour of backward class of citizens, no such provision was made in Article 15. 
  • Pursuant to the Supreme Court’s order in the case, Parliament amended Article 15 by inserting Clause (4). 
• In Indra Sawhney v. Union of India (1992) case the court examined the scope and extent of Article 16(4). 
  • The court has said that the creamy layer of OBCs should be excluded from the list of beneficiaries of reservation, there should not be reservation in promotions, and total reserved quota should not exceed 50%. 
• The Parliament responded by enacting the 77th Constitutional Amendment Act. 1995 which introduced Article 16(4A). 
  • The Article confers power on the state to reserve seats in favor of SC and ST communities in promotions in Public Services if the communities are not adequately represented in public employment. 
• The Supreme Court in M. Nagaraj v. Union of India (2006) case while upholding the constitutional validity of Art 16(4A) held that any such reservation policy in order to be constitutionally valid shall satisfy the following three constitutional requirements: 
  • The SC and ST communities should be socially and educationally backward. 
  • The SC and ST communities are not adequately represented in public employment. 
  • Such a reservation policy shall not affect the overall efficiency of the administration. 
• In Jarnail Singh v. Lachhmi Narain Gupta case (2018), the Supreme Court held that reservation in promotions does not require the State to collect quantifiable data on the backwardness of the Scheduled Castes and the Scheduled Tribes. 
  • The Court held that creamy layer exclusion extends to SC/STs and, hence the State cannot grant reservations in the promotion to SC/ST individuals who belong to the creamy layer of their community. 
• In Janhit Abhiyan v. Union of India (2022) the constitutional validity of 103rd Constitutional Amendment Act, 2019 was challenged. The Supreme Court upheld the validity of 103rd Constitutional Amendment. 
  • The Court introduced 10% EWS reservation under the 103rd Constitution (Amendment) Act, 2019 by amending Articles 15 and 16. 
  • It inserted Article 15 (6) and Article 16 (6). 

Conclusion  

The recent controversy surrounding OBC creamy layer reservations highlights the need for a reassessment of the reservation system. While the intention of reservations is to uplift the disadvantaged, issues such as fraudulent certificate acquisition, ineffective income thresholds, and unequal distribution of benefits underscore the need for reform. A balanced approach, considering both socioeconomic status and ensuring benefits reach the most marginalized, could enhance the system's effectiveness and fairness.