With elections to the Lok Sabha and some state Assemblies round the corner, the government  raised the income ceiling for creamy layer from Rs 2.5 lakh to Rs 4.5 lakh annually in a move that will cover more Other Backward Classes under the reservation criteria.
     
The Cabinet decision would be communicated to the Ministries of Human Resource Development and Department of Personnel and Training for issuance of appropriate orders to central educational institutions and government departments for pursuance of the order.
     
"The Union cabinet today gave its approval for revising the income criteria for creamy layer from the present Rs 2.5 lakhs per annum to Rs 4.5 lakhs per annum," Information and Broadcasting Minister Priyaranjan Dasmunshi said in New Delhi [Images].
      
The proposal had been mooted by the Ministry of Social Justice and Empowerment on the basis of recommendations of the National Commission for Backward Classes.       

The proposal was discussed at an inter-governmental level, involving the ministries of Tribal Affairs, Home, DOPT, Law and HRD besides the Social Justice and Empowerment ministry.
      
"None of the ministries gave any negative remark on the recommendations. The HRD ministry gave certain suggestions like spelling out clear-cut modalities for giving reservation benefits with this enhanced ceilings to those working in private sector and public sector units," an official of the Social Justice Ministry told PTI.
      
The first ceiling for OBC reservation was fixed at Rs one lakh annually in 1993, which was increased to Rs 2.5 lakh in 2004.         

The current ceiling revision comes at a time when the benefits of 27 per cent reservation to the OBCs have already been extended for admissions in educational institutions after the enactment of Central Educational Institutions Act, 2006 by the HRD Ministry in January last year.
       
The Act provides 27 per cent reservation for OBCs in central educational institutions. Putting a stay on the government decision, the Supreme Court asked for exclusion of better offs or 'Creamy layer' among OBCs prior to its implementation while upholding the Act.
       
After this, the Social Justice Ministry directed NCBC to recommend a revised and practical ceiling limit for exclusion of the creamy layer among OBCs from reservation benefits in January this year.
       
The commission submitted the report to the Ministry on July 1 revising the income ceiling to Rs 4.5 lakh per annum.
        
The commission took into account the recommendations of the sixth central pay commission besides the all India consumer price index, price rise, inflation rate, monthly per capita expenditure of the OBCs, economic conditions of the OBCs and per capita national product before arriving at a decision on the new ceiling.
       
The commission also took into account views expressed by the representatives of the various state backward classcommissions and secretaries in charge of the related departments of the states and union territories in this regard.
       
Most of the states had in a conference here earlier demanded the new ceiling be fixed between Rs 4 to Rs 6 lakh. Karnataka and Madhya Pradesh [Images] had, however, demanded higher ceilings of Rs 25 lakh and Rs 10 lakh respectively.