Taxable income may define ‘creamy layer’

Taxable income may define ‘creamy layer’

Subodh.Ghildiyal@timesgroup.com

New Delhi:  24.07.2020

Amid the ruckus over its controversial proposal to include “salary” in determining “creamy layer” for OBCs, the government may change the income ceiling to exclude backwards from quota from “gross income” to “net taxable income”.

Sources said the National Commission for Backward Classes is veering towards dropping its veto to the radical change to the concept of “creamy layer” proposed by the ministry for social justice & empowerment. As a concession, it may seek that the income bar be changed. The shift will raise the income threshold for “creamy layer” — the category that is viewed as advanced and is not eligible for 27% job and education reservation. The ministry has proposed that salary be included to determine creamy layer.

OBC reservation: Proposal to raise income ceiling from ₹8L to ₹12L

The ministry’s proposal is a big departure from the 1993 official memorandum of the DoPT which lays down that “creamy layer” be decided on the basis of “income from other sources” while leaving out “salary” and “agricultural income”.

Alongside, the ministry has also proposed to increase the income ceiling from the present Rs 8 lakh to Rs 12 lakh a year. In February, the National Commission for Backward Classes, in its opinion to the ministry, had strongly opposed the twinproposal Cabinet note, saying it will hurt the interests of the backward communities.

Since then, however, the backward panel is learned to have moved to a more accommodating position following the intervention of the BJP leadership. The NCBC members met home minister Amit Shah on Tuesday for a discussion. The view of the OBCs is split down the middle on the contentious issue. This month, chairman of the parliamentary committee on OBC welfare, Ganesh Singh, who is a senior BJP member, wrote to all party MPs from backward communities that they should oppose the Cabinet proposal.

However, proponents of the move in BJP argue that factoring in salary in the wealth test will weed out better-off members among OBCs and pave the way for weaker communities which are not able to compete for quota benefits.