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Benefiting the cream: Proposed raise in creamy layer income-floor will hurt poor OBCs

Data from Price shows that the proposed OBC-creamy-layer income-threshold will allow nearly 99% of the OBCs to avail reservations accorded to the category.

For one, the average household income rose by 14% between FY17 and FY20—the pandemic would certainly have seen FY21 income-rise over FY17 dip in comparison to FY20’s—but the government is proposing to raise the income-threshold for OBC reservation by 33%.

The government is reportedly mulling over fixing the creamy layer threshold-income for OBC quotas at Rs 12 lakh a year. While the threshold must be reviewed every three years, the last such revision was made in 2017, when the threshold was moved up to Rs 8 lakh per annum, from Rs 6 lakh set in 2013. The government’s proposed threshold is problematic for a host of reasons. For one, the average household income rose by 14% between FY17 and FY20—the pandemic would certainly have seen FY21 income-rise over FY17 dip in comparison to FY20’s—but the government is proposing to raise the income-threshold for OBC reservation by 33%.

Bear in mind, the Centre’s economically backward classes (EBC) quota considers household income below Rs 8 lakh per annum as ‘economically backward’. This threshold means 80% of the country’s population qualifies as EBC. And if the Rs 12 lakh per annum income proposed is considered, a whopping 95%-plus of the population would be below this.

Data from Price shows that the proposed OBC-creamy-layer income-threshold will allow nearly 99% of the OBCs to avail reservations accorded to the category. This means the really poor OBC households must compete with middle-class OBC households for the quota—given the significant edge from economic well-being in availing such benefits, this will simply erode the ‘creamy layer’ concept that must ensure that the better-off amongst the OBCs don’t corner the lion’s share of the quota. With there being ample evidence that dominant OBC groups have been cornering a large chunk of reservation benefits, the Centre’s proposal will only ensure further dominance of the privileged. Some experts say apportioning of quotas within the OBC quota will prove an effective counter to this, but it will be hard to implement and could make identity politics far messier than it already is.

States have muddied the ‘creamy layer’ concept, too. For instance, the Tamil Nadu government said earlier this week that agricultural income of parents of OBC students need not be factored in for granting of caste certificates for availing reservation benefits; this is contrary to what the Centre deems included in the calculation of household income for determining ‘creamy layer’. States must ensure that the most vulnerable benefit. To that end, there is also the need to drum up political and judicial consensus on ‘creamy layer’ conditions for other reserved categories as well. While quotas-within-quota for SCs is awaiting clarity in the courts, the Centre can frame a new law to protect the interests of disadvantaged groups within the SCs and STs. Else, it will be the poor that suffer the most, and not just within the reserved categories.

A better way to give the historically disadvantaged a leg-up, while also ensuring that the reservation policy doesn’t become perpetual is to focus on improving educational levels—Price data, as this newspaper has pointed out on many occasions, shows education is a bigger determinant of household prosperity and upward mobility than caste. If the government (both Centre and the states) were to focus on improving educational attainment in the reserved communities, it will perhaps enable a change in social attitudes as well.

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