Explained: Creamy Layer Concept

Unless economic growth is so great that it always results in social advancement, exclusion shouldn't be based solely on economic factors. While a person's income might be used as a gauge of his social advancement, the limit that is set should not have the effect of taking something away with one hand while giving something else. The income ceiling ought to represent and mean societal advancement.

Creamy Layer: OBC

The government announced a twenty seven percent reservation for "Socially and Educationally Backward Classes (SEBCs)" in vacancies for civil posts and services that are to be filled through direct recruitment in August 1990 based on the recommendation of the "Second Backward Classes Commission (Mandal Commission^[1])."

Following a challenge, the Supreme Court affirmed the twenty seven percent OBC reservation in November 1992 (Indra Sawhney case^[2]), subject to the creamy layer's exclusion.

Although there is a quota of twenty seven percent for OBCs in government employment and higher education, those who fall into the "creamy layer" (different groups based on income and parental rank) are not eligible to profit from this quota.

Creamy Layer for SCs/STs

In the Nagaraj case^[3] (2006), it was argued that the government's four constitutional amendments — "the 77th Constitutional Amendment Act of 1995, the 81st Constitutional Amendment Act of 2000, the 82nd Constitutional Amendment Act of 2000, and the 85th Constitutional Amendment Act of 2001" — were invalid because they were intended to overturn the court's rulings in the Indra Sawhney Case^[4].

Although the five-judge Bench in the Nagaraj case^[5] supported the constitutional legality of all four amendments, the Supreme Court's subsequent two validations in this case became a source of controversy:

• First, according to the Court, the State is not required to create reservations for SCs and STs in matters involving promotions. The State must, in addition to complying with Article 335, gather measurable facts demonstrating the class's backwardness and the inadequate representation of that class in public employment if they intend to exercise their discretion and make such a provision.
• Second, it changed its former position in the Mandal case, where it had eliminated the idea of the creamy layer for SCs and STs (that was applicable on OBCs). The Nagaraj case ruling made it apparent that even if the State has compelling reasons (as described above), it must make sure that its reservation provision does not result in excess—breaching the ceiling-limit of 50%, breaking the creamy layer principle, or prolonging the reserve indefinitely. As a result, in this decision, the Court added SCs and STs to the creamy layer principle.

The Mandal case ruling, which said that SCs and STs are the most backward classes, is in direct conflict with the Centre's request that the Court reconsider its position on the two concerns mentioned above. Therefore, it is assumed that there will be no need to demonstrate the SCs and STs' backwardness after they are included to the Presidential List pursuant to Articles 341 and 342 of the Indian Constitution. In accordance with Articles 341 and 342, which specify which individuals in each state and Union Territory would be regarded as SCs or STs, the aforementioned List cannot be changed by anybody other than Parliament. Additionally, the Indra Sawhney case has not used the concept of creamy layers.

In "Jarnail Singh v. Lachhmi Narain Gupta case^[6] (2018)", the court made clear its position and declined to refer the aforementioned issue to a bigger bench.

As stated by the Court in the Nagaraj decision, it invalidated the requirement that states collect quantifiable data on the social and economic disadvantage of SCs and STs when granting quotas in promotions; however, states must still support this with relevant data demonstrating the inadequacy of SCs & STs' representation in the cadre.

The Court upheld the Nagaraj decision about the creamy layer principle, which prevents the wealthy members of the SC/ST community from receiving the benefit. The Court ruled that in order to transfer quota benefits to the weakest of the weaker people and prevent them from being taken away by members of the same class who were in the "top creamy layer," the creamiest members of Scheduled Castes/Scheduled Tribes communities had to be excluded from the benefits of reservation in government services. The Court further noted that it would be impossible to improve the weaker groups if only a small portion of that class managed to secure every sought position in the public sector and maintain it, leaving the remainder of the class in the same condition as before.

The Supreme Court's decision in the Jarnail Singh case was overturned, and the government is now asking the court to revisit that decision in light of the creamy layer principle.

Reservation offers adequate positive discrimination to advance the interests of the economically and socially underprivileged segments of society. Additionally, the idea of the "creamy layer" contributes to guaranteeing that only the genuinely worthy and most oppressed members of any given community receive those reserve benefits.