Supreme Court Declares Income-Sole Criterion for OBC Creamy Layer Unconstitutional and Unsustainable

The Supreme Court of India has ruled that income alone cannot be the sole criterion for determining the “creamy layer” status among Other Backward Classes (OBC), stressing that the same standards must apply to children of government employees, public-sector workers, and private-sector employees.

The judgement came while hearing appeals filed by the Government of India against rulings of the Madras High Court, the Delhi High Court and the Kerala High Court. These courts had earlier held that using different criteria to determine creamy layer status for employees of public sector undertakings (PSUs) compared with government employees was discriminatory.

A bench of Justices PS Narasimha and R. Mahadevan said the purpose of excluding the creamy layer is to ensure that socially advanced sections within OBC communities do not take away benefits meant for genuinely backward groups. The court noted that creating artificial distinctions between similarly placed individuals within the same backward class would violate the principle of equality.

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The case involved three OBC candidates who had qualified in the Union Public Service Commission (UPSC) examination for civil services but were classified as belonging to the creamy layer during verification. They challenged the classification before the Central Administrative Tribunal and later in the high courts, which ruled in their favour.

The Supreme Court agreed with the reasoning of the high courts, stating that interpreting government guidelines in a way that disadvantages one section of the same backward class would amount to treating “equals as unequals". The court said such discrimination would go against the constitutional principle of equality.

The judgement also referred to the 1993 Office Memorandum on creamy layer determination and a 2004 clarification issued by the centre, noting that salary income and agricultural income should not be combined with other income sources while calculating the gross annual income for determining creamy layer status.

The court concluded that relying solely on income brackets without considering the status or position of parents’ employment, as outlined in the 1993 guidelines, would be legally unsustainable.

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