New Delhi: The government on Wednesday raised the income limit defining 'creamy layer' for OBC reservation by Rs two lakh per annum.


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Also, the Union Cabinet approved setting up of a panel for sub-categorisation within the other backward classes for even distribution of reservation benefits.

Union Finance Minister Arun Jaitley said after a Cabinet meeting here that OBC families earning up to Rs 8 lakh per annum will not be considered in the creamy layer.


Earlier, this ceiling was Rs 6 lakh per annum.

"The Cabinet was apprised that the creamy layer criterion limit has been raised to Rs 8 lakh annually for the central government," he said.

Asked if the raised limit will also be applicable to public sector undertakings, Jaitley said the issue was under "active consideration of the government".

Jaitley said the Cabinet approved a proposal for setting up of a commission under article 340 of the Constitution to examine the issue of sub-categorisation of the OBCs.


He said the commission will examine the extent of inequitable distribution of benefits of reservation among the castes or communities included in the broad category of OBCs, with reference to the OBCs included in the Central list.

It will work out the mechanism and parameters for sub-categorisation within such OBCs, identify the respective castes or communities or sub-castes in the central list of OBCs and classify them into their respective sub-categories.

"With this, those in the broad category of OBCs who were till now devoid of benefits of reservation, will get the benefits. There will be more equitable distribution," he said, as per IANS.

The commission will submit its report within 12 weeks from the date of appointment of the chairperson. 

Jaitley said the National Commission for Backward Classes had given its recommendation in 2011 that there should be sub-categorisation and Parliamentary Standing Committee had also given such a recommendation.

The Supreme Court, in its November 1992 order, had observed that there is no Constitutional or legal bar to a state categorising backward classes as backward or more backward.

The Minister said 11 states have already implemented the sub-categorisation for state level services. These are Andhra Pradesh, Telangana, Bihar, Jharkhand, Puducherry, Haryana, Karnataka, West Bengal, Maharashtra, Tamil Nadu and Jammu and Kashmir (for Jammu region).

On whether the government is going to review the reservation mechanism, Jaitley said, "There is no such proposal, there will be no review."


On caste census, Social Justice and Empowerment Minister Thawarchand Gehlot, who was also present at the press meet, said the information about the census is with the Home Ministry.

He said the central OBC list has over 5,000 castes and communities. 


There had been three revisions of the creamy layer bar. It was fixed at Rs one lakh in 1993 and hiked to Rs 2.5 lakh in 2004 and Rs 4.5 lakh in 2008. The present ceiling of Rs six lakh came into being in 2013.


BJP leaders hail decision


Prominent BJP leaders of backward classes hailed the announcement as 'historic' and 'unparallelled', saying these measures addressed two major demands that the OBC group had been pressing for over several years.


"It is an unparallelled step towards empowering backward classes. The average income among them had risen with time and there was an increasing demand to raise the creamy layer bar. The decision will provide reservation benefits to many more people," BJP general secretary Bhupender Yadav said, as per PTI.


He said the government had taken a decision which would help the most deprived among backward classes.


"It is a historic decision. The Narendra Modi government has met two long-pending demands of the OBC. The National Commission for Backward Classes in 2011 and a parliamentary panel in 2015 called for sub-categorisation among the OBC," Union Minister Santosh Gangwar, a Kurmi leader from Uttar Pradesh, said.


Hukumdev Narayan Yadav, a party MP and former Union minister, said OBC MPs had long been raising the demand for increasing the creamy layer ceiling.


Extremely backward sections of the OBC have been pushing for a quota as well, he said.


"It is a very welcome move. OBCs across the country will laud it," he added.


BJP chief Amit Shah too cited the Modi government's announcements on benefits for backward classes as evidence of his party's commitment to the holistic development of marginalised sections.


The government's move to have sub-categories within OBC will give 'priority' to the extremely backward groups among the OBCs in reservation and other government schemes, he said in a statement.


The rise in the creamy layer annual income ceiling will provide reservation and other benefits to a large section of society, he said, terming it a 'positive' move towards making these measures 'just'.


Congress asks govt to seriously address issue


On the other hand, the Congress today adopted a cautious approach and urged the government to seriously address the issue, saying it would adversely affect the poor and needy sections of society.


Congress chief spokesperson Randeep Surjewala said the government was creating "reservation within reservation" and raising the limit for creamy layer among OBCs will lead to the poor and needy not getting the benefits.


"It is the poor and the needy in society who need the job reservations. By raising the 'creamy layer' limit, is the BJP government not depriving the poor from getting job benefits? When limits are raised to Rs 8 lakh, are you not giving the benefits to the rich and in the bargain the children of the poor will not get the benefit of jobs and reservation and will be left out," he told reporters.


Surjewala said the government and the PM and his Cabinet should seriously dwell on this aspect to ensure the poor are not left out of reservation benefits.


(With Agency inputs)