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In a BIG shift, govt mulls defining 'creamy layer' on net taxable income and increasing ceiling

In a major move aimed to redefine "creamy layer" for OBCs, the government is mulling to increase the income bar from present Rupees 8 lakh to Rs 12 lakh and and drop "gross income" to bring in "net taxable income". The government had earlier proposed to include "salary" in determining "creamy layer".

India TV Business Desk India TV Business Desk
New Delhi Published on: July 24, 2020 11:05 IST
As per DoPT's official memorandum in 1993, the creamy layer
Image Source : PTI

As per DoPT's official memorandum in 1993, the creamy layer was decided on the basis of income from other sources  which excluded "salary" and "agricultural income". 

Times of India on Friday reported that the National Commission for Backward Classes (NCBC) was likely to drop its veto to the radical change in the concept of "creamy layer" proposed by the Ministry of Social Justice and Empowerment. In return, the ministry would consider increasing Rs 8 lakh ceiling to Rs 12 lakh to redefine the creamy layer. 

The creamy layer is viewed as advanced and is not eligible for 27% job and education reservation. 

Earlier, the Social Justice Ministry had proposed to 'salary' to be included in determining the creamy layer.

As per DoPT's official memorandum in 1993, the creamy layer was decided on the basis of income from other sources  which excluded "salary" and "agricultural income". 

However, government proposal had initially met opposition in certain sections who thought it will dilute the interests of backward communities and hurt them. 

But this time the social justice and empowerment ministry proposal to increase the "creamy layer" ceiling to Rs 12 lakh might just address some of the objections raised by the NCBC. 

In  2019, the Supreme Court had ruled that the "creamy layer" principle, used to exclude the affluent among other backward classes (OBCs) from enjoying the fruits of reservation, can be made applicable to deny quota benefits in promotion to those affluent among the Scheduled Castes and Schedules Tribes.

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