The Union cabinet has sent back to the social justice ministry a proposal to include salary in gross family income for identification of the creamy layer within the other backward classes for exclusion from quota benefits.

The ministry had sent the proposal to the cabinet in 2020 based on the recommendation of a committee headed by retired bureaucrat B.P. Sharma. In 2019, the committee had suggested that the annual family income limit of Rs 8 lakh should be increased to Rs 12 lakh and salary should be included in it. Salary and income from agriculture are now not considered while deciding the creamy layer among OBCs.

The cabinet sat on the proposal for over a year before returning it last month to the ministry with the advice that it hold more consultations, two senior government officials said.

The proposal was returned at a time when the government is facing tough questions in the Supreme Court on the income criteria for economically weaker sections (EWS) quota benefits.

The government has fixed an annual income ceiling of Rs 8 lakh for eligibility for the EWS quota, the same limit that is used to demarcate the creamy layer among the OBCs for exclusion from reservation benefits. This has prompted the apex court to question the rationale behind the move as EWS candidates are only economically backward while the OBCs are also socially and educationally backward.

A panel appointed by the central government to review the income cut-off for the EWS quota after the Supreme Court questioned the existing figure favours retaining it at Rs 8 lakh, sources have said.

This committee, headed by former bureaucrat Ajay Bhushan Pandey, has pointed out that while salary income is not part of the OBC creamy layer criteria, it is considered while selecting EWS beneficiaries.

It referred to a 1993 government order that said salary and earnings from agriculture cannot be included in the gross family income for OBC creamy layer identification.

The 1993 order stated that persons holding constitutional posts and Group A posts in the government before they attain the age of 40 are automatically creamy layer. All other staff are not part of the creamy layer as income from salary and agriculture are not considered in case of OBCs but are taken into account while selecting EWS beneficiaries, the committee has reasoned while making a case for the government’s decision on EWS.

The National Commission for Backward Classes, a constitutional body, has opposed the proposal to include salary in gross family income.

Shashank Ratnoo, a Supreme Court advocate who specialises on OBC issues, said the top court had on several occasions ruled against the inclusion of salary among the creamy layer criteria.

“Counting of salary and agriculture income will be against the basic principle of creamy layer identification. This has been spelt out by the Supreme Court in its judgments in the Indra Sawhney and Ashok Kumar Thakur vs Union of India (cases),” he said.

G. Karunanidhy, national secretary of the All India Federation of Other Backward Classes, said the government had not shelved the proposal for inclusion of salary.

“On one hand you have cited non-inclusion of salary in the OBC creamy layer criteria to argue that the requirements for the OBCs are more relaxed than the EWS category. On the other, you bring a parallel proposal to include salary to bring parity. This government maintains a double standard,” he said.

P.C. Patanjali, president of the Mahatma Phule Foundation, said the government should discard the proposal for inclusion of salary.