What is the Creamy Layer in Reservation?

In India, the reservation system has long been an instrument for social justice, aimed at uplifting historically marginalised communities by providing them with access to education, employment, and other opportunities. However, as society and its economic fabric have evolved, so too has the need to ensure that the benefits of such affirmative action reach only those who are genuinely disadvantaged. 

This is where the concept of the “creamy layer” comes into play-a judicial and policy tool designed to exclude the relatively well-off within the Other Backward Classes (OBCs) from availing reservation benefits. Over the years, landmark Supreme Court judgements have shaped and refined this concept, sparking debates on its fairness, implementation, and future direction.

What is the Creamy Layer?

The “Creamy Layer” refers to the relatively wealthier and privileged members within the OBC (Other Backward Classes) group, who are excluded from reservation benefits in India. This concept was introduced by the Mandal Commission Report, which suggested that financial status should be considered for eligibility for benefits rather than caste alone. 

The creamy layer is defined by income thresholds, and those exceeding this threshold are considered socially advanced and are not eligible for affirmative action. The idea is to ensure that only those truly disadvantaged benefit from such schemes.

Emergence and Definition of the Creamy Layer Concept

The term “creamy layer” was first used by the Supreme Court in the 1976 judgement of State of Kerala v NM Thomas. Justice Krishna Iyer observed that, in the context of reservations in promotions, there was a risk that the benefits could be monopolised by the relatively affluent individuals within the backward castes. Although this observation did not immediately translate into binding law, it laid the groundwork for future judicial scrutiny of reservation policies.

The concept was formally crystallised in the Indira Sawhney judgement of 1992. The Court held that while the state could provide reservation benefits to OBCs, it must exclude those who belonged to the creamy layer-that is, those who had achieved a certain level of economic and social advancement. The rationale was clear: reservation should assist those who are truly deprived, and not merely serve as an entitlement for all individuals within the OBC category regardless of their socio-economic status.

In practical terms, the creamy layer is defined using specific criteria. Predominantly, an income threshold is set-currently at Rs 8 lakh per annum (excluding salary and agricultural income)-beyond which individuals are deemed to be part of the creamy layer. Additionally, for children of government employees, the determination may also include considerations of parental rank. 

For example, children of IAS, IPS, and high-ranking military officers (typically Colonel and above) are automatically categorised within the creamy layer, as their socio-economic conditions are assumed to be better.

Historical Context of Reservation in India

The roots of reservation in India can be traced back to the pre-independence era, where certain princely states practised quota systems for backward classes. With the adoption of the Constitution of India in 1950, the principle of equality was enshrined alongside special provisions for socially and educationally backward sections of society. 

Articles 15 and 16 of the Constitution, while guaranteeing equality, also permitted the state to make provisions for the advancement of marginalised groups. Early on, fixed quotas were established-15% for Scheduled Castes (SCs) and 7.5% for Scheduled Tribes (STs) in public employment and education.

The reservation framework was further expanded with the recommendations of the Mandal Commission, which in 1980 advocated for 27% reservation for OBCs in central government services. The subsequent implementation of these recommendations in 1990 by Prime Minister V.P. Singh led to widespread social and political debates, culminating in the seminal Supreme Court case of Indira Sawhney v Union of India (1992). It was in this case that the judiciary introduced the “creamy layer” principle to ensure that the reservation benefits were directed towards those who were truly backward within the OBC community.

Landmark Cases Shaping the Creamy Layer Doctrine

The jurisprudence on the creamy layer has evolved considerably over the decades, as reflected in several landmark judgements:

State of Kerala v NM Thomas (1976)

State of Kerala v NM Thomas was the first instance where the Supreme Court acknowledged the term “creamy layer”. Justice Krishna Iyer warned that reservation benefits might be cornered by affluent individuals within backward castes, thus depriving the truly marginalised of their rightful share. 

Although the Court’s comments were observational and not immediately binding, they laid the foundation for subsequent legal developments in this area.

Indira Sawhney v Union of India (1992)

Perhaps the most pivotal case in this context, the Indira Sawhney judgement affirmed the reservation for OBCs while mandating the exclusion of the creamy layer. The Court elucidated that individuals from the OBC category who had attained considerable economic and social status-often evidenced by positions in the All-India Services such as IAS or IPS-should not benefit from reservations. 

Importantly, the Court noted that while economic criteria were significant, they should not be the sole determinant; rather, a combination of factors leading to social advancement was considered.

Ashok Kumar Thakur v State of Bihar (1995)

In Ashok Kumar Thakur v State of Bihar case, the Bihar government’s attempt to define the creamy layer by setting a threshold of ten lakhs per annum for professionals and IAS officers was challenged. The Court found the criteria arbitrary, particularly given the per capita national income of approximately ₹6,929 (as recorded for 1993-94). 

This judgement underscored the need for realistic and context-sensitive thresholds in identifying the creamy layer, thereby ensuring that the reservation system remains equitable.

Revisiting in Indira Sawhney (1999)

The Court revisited the issue of the creamy layer in a subsequent deliberation on the Indira Sawhney case. It stressed that without a robust creamy layer exclusion, reservation benefits might fail to reach the most backward segments of the community, thus contravening the fundamental right to equality. 

The Court reaffirmed that high-ranking government officials-by virtue of their social and economic standing-were de facto part of the creamy layer, thereby justifying their exclusion from reservation benefits.

Jarnail Singh v Lacchmi Narain Gupta (2018)

Jarnail Singh v Lacchmi Narain Gupta judgement extended the creamy layer doctrine to the realm of promotions for SC/ST candidates in public employment. The Court upheld reservations in promotions for these communities but emphasised that those belonging to the creamy layer must be excluded. 

The rationale was to prevent the already socially and economically advanced members within the SC/ST communities from monopolising the benefits, thereby ensuring that the truly backward are accorded their due share.

Legal and Policy Implications of the Creamy Layer Doctrine

The creamy layer concept serves several important legal and policy functions within the reservation framework:

Targeted Benefit Allocation

By excluding individuals who have attained a certain level of economic and social advancement, the creamy layer ensures that the benefits of reservations are directed towards those who are genuinely in need. This selective approach is critical in a country as diverse as India, where blanket benefits may inadvertently widen the gap between the ‘haves’ and the ‘have-nots’.

Preservation of Equality

The doctrine upholds the constitutional principle of equality by ensuring that unequals are not treated as equals. If the relatively better-off within a disadvantaged group were allowed to avail reservation benefits, it would defeat the purpose of affirmative action and violate the fundamental right to equality guaranteed by the Constitution.

Prevention of Misuse

Over the years, there have been numerous instances of fraudulent obtainment of Non-Creamy Layer (NCL) and Economically Weaker Section (EWS) certificates, as well as misuse of disability certificates to secure reserved posts. The creamy layer criteria act as a safeguard against such malpractices, ensuring that only those who truly require assistance benefit from the system.

Dynamic Policy Making

The doctrine necessitates regular reviews and updates. For instance, the current income threshold of Rs 8 lakh per annum-established in 2017-is subject to periodic revision. Proposals have been made to raise this limit to Rs 12 lakh or even Rs 15 lakh per annum, reflecting the dynamic nature of socio-economic conditions in India. Such adjustments are essential to maintain the relevance and fairness of the reservation system.

Conclusion

The concept of the creamy layer in the reservation system represents a critical attempt to fine-tune affirmative action in India. By delineating a threshold within the OBC category-and, more recently, in certain contexts within the SC/ST categories-the judiciary has sought to ensure that reservation benefits are channelled towards those who are truly deprived. 

While the doctrine has been vindicated in landmark judgements such as Indira Sawhney, Ashok Kumar Thakur, and Jarnail Singh, it remains a subject of ongoing debate and reform.