Supreme court delivers major ruling on OBC creamy layer; salary alone cannot determine status
Supreme Court rules that OBC creamy layer cannot be determined solely by parents’ salary
New Delhi (The Uttam Hindu): The Supreme Court has delivered a significant judgment introducing an important change in determining the Other Backward Classes (OBC) Non-Creamy Layer (NCL). In its ruling on March 11, the court clarified that creamy layer status cannot be decided solely on the basis of parents’ salary or income. Instead, the position of employment and other factors mentioned in the original 1993 guidelines must also be considered.
The Supreme Court stated that if parents are employed in government jobs under Group C or Group D (Class III or IV), their salary will not be counted while determining creamy layer status. Income earned from agriculture will also be completely excluded. For the purpose of determining the creamy layer, only the family’s income from “other sources” such as business, property, rent, and similar earnings will be considered, and the average annual income from these sources must remain below ₹8 lakh over three consecutive years.
In the ruling, the court also declared invalid Paragraph 9 of a 2004 letter issued by the Department of Personnel and Training (DoPT), which had stated that salaries of employees in banks, the private sector, or public sector undertakings (PSUs) should be included in the creamy layer calculation. The court termed this approach discriminatory and observed that children of government employees and those of private or PSU employees cannot be treated differently. Until equivalence between PSU or private sector posts and government Group III or IV positions is clearly established, only the original 1993 Office Memorandum (OM) guidelines will apply.
The judgment is expected to bring major relief to thousands of OBC candidates who were previously denied reservation benefits after being classified as creamy layer due to salary-based interpretations or incorrect criteria. Many of these individuals are in government jobs but have not reached the appropriate cadre or rank.
The court directed that the decision should be implemented retrospectively. The Department of Personnel and Training has been given six months to enforce the ruling. If necessary, supernumerary posts may be created to ensure that the seniority of employees from other categories is not affected.
In the future, valid OBC-NCL certificates issued by district magistrates or tehsildars will be given priority in civil services examinations, and rejections based solely on salary will no longer be allowed. The ruling aims to restore the true objective of OBC reservation by ensuring benefits reach genuinely disadvantaged sections. The DoPT has also been directed to review cases such as those of Rohit Nathan (CSE-2012) and Ketan Batch (CSE-2015) and restore their OBC-NCL status within six months.