Economic Criterion Cannot Be Sole Basis Of Identifying Creamy Layer Amongst Backward Classes

By:- Sachin Tiwari


A Division Bench of the supreme court ( hereinafter, the court ) L. Nageswara Rao and Aniruddha Bose, JJ., in Pichra Warg Kalyan Mahasabha Haryana v. State of Haryana stated that exclusion of ‘creamy layer’ (socially advanced sections) among backward classes cannot be made on the basis of economic criterion as the sole basis. The court found the notification dated 17-8-2016 issued by the State Government of Haryana for identification of socially advanced section unreasonable and arbitrary.

In this context, it is important to have a factual background of the case.  According to the directions issued to the state governments by the Supreme Court in Indra Sawhney v. Union of India to identify ‘creamy layer’ amongst the backward classes and exclude them from the purview of reservation, the Haryana government constituted Second Backward Classes Commission was constituted on 12.10.1993. The recommendations of the Second Backward Classes Commission for excluding socially advanced persons/sections (creamy layer) from the backward classes were accepted by the state government.  

Later, the state government enacted the Haryana Backward Classes (Reservation in Services and Admission in Educational Institutions) Act ( hereinafter, the act), 2016 for the purpose of providing reservation to backward classes in the State of Haryana in services and admission in educational institutions.

Section 5 of this Act states that persons belonging to the ‘creamy layer’ amongst the backward classes shall not be considered for reservation. Further, Section 5(2) of the Act specifies the criteria upon the ‘creamy layer’ amongst the backward classes shall be identified and those considerations are social, economic, and such other factors which the Government shall specify by notification.

The state government issued a notification dated 17-8-2016 ( hereinafter, 2016 Notification )  exercising powers of the 2016 Act. As per the said notification, the children of persons having gross annual income up to Rs. 3 lakh would be the first that would be benefitted from the reservation.

Also, the sections of backward classes earning above Rs 6 lakh per annum shall be considered as ‘creamy layer’ under Section 5 of the 2016 Act thereby people belonging to this section would not be entitled to reservation. There has been further sub-classification, according to which, left-out quota shall be given to sections earning more than 3 lakh but less than 6 lakh per annum and first preference in the reservation must be given to those sections earning up to Rs 3 lakh per annum.

The Supreme Court’s ruling

The supreme court observed in para 14; “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.

On this ground alone, the notification dated 17.08.2016 requires to be set aside. Therefore, we quash the notification dated 17.08.2016, giving liberty to the State Government to issue a fresh notification within a period of 3 months from today after taking into account the principles laid down by this Court in Indra Sawhney-I and the criteria mentioned in Section 5(2) of the 2016 Act for determining ‘creamy layer’ ”.

Further, in para 15 observed for quashing 2018 Notification; “As we have struck down the notification dated 17.08.2016 in toto, there is no need for adjudicating the validity of the notification dated 28.08.2018, which is solely dependent on the notification dated 17.08.2016 “.

The prominent factor that leads to set aside 2016 Notification and resultantly, 2018 Notification was the criteria of specifying the ‘creamy layer’ solely on the basis of economic criteria. For this, the court relied on J. Jeevan Reddy of the judgment in Indra Sawhney-I to state that if the identification of ‘creamy layer’ amongst backward classes was restricted only to the basis of economic criterion would be struck down. The court stated that any such criteria must be in conformity of what was reiterated in Indra Sawhney judgment wherein the Court gave directions and following such directions of the court , memorandum dated 8-9-1993 issued by the Union of India.

Further, the court also relied on Ashok Kumar Thakur v. State of Bihar wherein the court struck down the notifications issued for the identification of ‘creamy layer’ by the States of Bihar and Uttar Pradesh for being wholly arbitrary and in contravention with the guidelines laid down by this Court in Indra Sawhney-I.

Creamy layer as a concept

The concept of the creamy layer can be traced back to the case of K.S. Jayashree v. State of Kerala as the people wherein the threshold of availing the benefits of reservation was fixed to Rs. 10000 which means that sections , who are having family income of more than Rs. 10000, were not given the benefits of reservation. It is to be noticed that there is a general misconception regarding the first of the term which is often associated the Indra Sawhney v. Union of India, however, it has been noticed that it was Justice Krishna Iyer who coined it first in State of Kerala v. N.M. Thomas: “benefits of the reservation shall be snatched away by the top creamy layer of the backward class, thus leaving the weakest among the weak and leaving the fortunate layers to consume the whole cake ”. This term has been again cited by different judgments ( here, here ). 

The concept of ‘creamy layer’ was introduced to exclude the more advanced among the Backward Classes while ensuring that benefits of affirmative actions reach the sections for which affirmative actions were introduced. The is two views prevailing around the concept of creamy layer; the supporter of economic criteria suggest that reservation benefits were designed to benefit the poorer among the backward, thus, there is nothing wrong in excluding the well off among the eligible castes and those who championing Backward Class assertion argues that creamy layer concept dilutes social basis for reservation, thus, disfavor any such dilution.

The need for creamy layer concept

The need of this concept could be better understood by the judgment of Jeevan Reddy, J. (paras 790, 792, 793 of SCC) in Indra Sawhney: “there are sections among the backward classes who are highly advanced, socially and educationally and they constitute the forward section of that community. These advanced sections do not belong to the true backward class. They are as forward as any other forward class member.

If some of the members are far too advanced socially (which in the context, necessarily means economically and, may also mean educationally) the connecting thread between them and the remaining class snaps. They would be misfits in the class. After excluding them alone, would the class be a compact class. In fact, such exclusion benefits the truly backward”.  Similar views were expressed by Ahmadi, Sawant, Kuldip Singh, Thommen, and Sahai, JJ. in their separate judgments

Also, M. Jagannadha Rao, J. opined: ”If forward classes are mechanically included in the list of backward classes or if the creamy layer among backward classes is not excluded, then the benefits of reservation will not reach the really backward among the backward classes. Most of the benefits will then be knocked away by the forward castes and the creamy layer. That will leave the truly backward, backward for ever”.

Analysis of the judgment

This ruling accentuated the stance of the Supreme Court that the identification of the creamy layer cannot be based solely on poverty or income alone as, according to the court, the concept of creamy layers was evolved by judicial discourse to exclude socially advanced persons. Justice Nariman said that the creamy layer concept is necessary to prevent the consumption of whole cake by those who are well off amongst the backward class.

Justice Nariman said: “Benefits, by and large, are snatched away by the top creamy layer of the ― backward caste or class, thus keeping the weakest among the weak always weak and leaving the fortunate layers to consume the whole cake”.  While saying so he held that the creamy layer concept is part of the fundamental right to equality.

Economic criteria as sole criteria for identifying ‘ creamy layer’ exclude the notion that financial stability does not necessarily mean that person has come out of social backwardness. Also Justice Reddy highlighted the pitfalls: “For example, annual income of Rs 36,000 may not count for much in a city like Bombay, Delhi or Calcutta whereas it may be a handsome income in rural India anywhere.

The line to be drawn must be a realistic one. Another question would be, should such a line be uniform for the entire country or a given State or should it differ from rural to urban areas and so on. Further, income from agriculture may be difficult to assess and, therefore, in the case of agriculturists, the line may have to be drawn with reference to the extent of holding”.

Above mentioned paragraph tells the difficulty of making income as the sole criteria. Such an approach ignore the ground reality and more importantly, the purpose of introducing the concept of affirmative actions. It is of no gainsay that special provision has been particularly included in the Constitution in favor of ‘socially and educationally backward classes’ through the First Amendment, as well as reservation in government employment for ‘backward classes.

The affirmative actions in India were introduced with the purpose of uplifting the socio-economic status of the under-represented, underprivileged, and stunted masses, therefore, it is really necessary to protect or preserve the benefits of affirmative actions so that person who has attained necessary societal status did not eat the whole cake. The court in the Indra Sawhney judgment opined on the exclusion of creamy layer: “The connecting link is the social backwardness.

It should broadly be the same in a given class. If some of the members are far too advanced socially (which in the context, necessarily means economically and, may also mean educationally) the connecting thread between them and the remaining class snaps. They would be misfits in the class. After excluding them alone, would the class be a compact class? In fact, such exclusion benefits the truly backward”.

Author Sachin Tiwari is a student of Dharmashastra National Law University. He likes to write about issues related to constitutional which that affect the public at large.

Leave a Reply