A Supreme Court Judgment Exposes Bureaucratic Subterfuge Over the 'Creamy Layer’ |
Listen to this article:
It is an undeniable aspect of the Indian political economy that the ruling classes, when conceding a democratic demand, often engineer a breakdown of institutional mechanisms to hollow it out from within. The history of affirmative action in this country is a case in point. It is not merely a history of constitutional amendments and landmark judicial pronouncements but also a history of stealthy bureaucratic sabotage. The dominant castes, having lost the overt political battle over the implementation of the Mandal Commission recommendations in the 1990s, retreated into the labyrinthine corridors of the secretariat, utilising the opaque instruments of ‘Office Memorandums’ and ‘clarificatory letters’ to take back what was conceded in principle.
The recent judgment of the Supreme Court, delivered on March 11, 2026, by a bench comprising Justices Pamidighantam Sri Narasimha and R. Mahadevan (Union of India v. Rohith Nathan and Others), is remarkable in this regard. In dismissing a batch of appeals filed by the Union government, the court has not merely provided relief to several legitimately qualified candidates belonging to the Other Backward Classes (OBCs) who were unlawfully denied entry into the civil services; it has, perhaps inadvertently, illuminated the deeply entrenched caste-class biases of the Department of Personnel and Training (DoPT).
To understand the nature of the bias enacted by the DoPT for nearly two decades, one must revisit the foundational logic of the ‘creamy layer’ doctrine. When the Supreme Court in Indra Sawhney (1992) mandated the exclusion of socially advanced sections from the OBC quota, it explicitly recognised that backwardness is primarily a social condition, not a purely economic one. Consequently, the Prasad Committee, and the subsequent 1993 Office Memorandum (OM) issued by the government, structured the exclusion criteria around ‘status’ rather than mere income.
The logic was sound, if one accepts the premise of the creamy layer. If an OBC individual reaches a position of recognised social status – for example, by becoming a direct recruit Class I (Group A) officer in the government – their children are deemed to have transcended social backwardness and are excluded from the quota. This is a status-based exclusion. To catch those who might have acquired immense wealth through business or other means not captured by government employment status, the 1993 OM introduced a residual “Income/Wealth Test” (Category VI).
However, the OM contained a crucial, democratically vital caveat: in calculating this gross annual income, income from salaries and agricultural land was to be strictly excluded.
Why? Because a Group C or Group D employee (a clerk or a peon), through sheer efflux of time and successive Pay Commissions, might eventually draw a salary that crosses the numerical threshold. But a clerk does not become socially “advanced” simply because inflation and pay scales have increased their nominal wage. To include salary in the income test would be to punish the lower rungs of the working class for the minor economic stabilisations they have managed to achieve.
Enter the DoPT. The 1993 OM stated that the criteria for government servants would apply mutatis mutandis to employees of Public Sector Undertakings (PSUs), banks, and universities, once the government established the “equivalence” of these posts vis-à-vis government posts. Pending this evaluation of equivalence, the Income/Wealth Test would apply.
The government – in its characteristic lethargy which is rarely accidental when the rights of the marginalised are concerned – failed to comprehensively map these equivalences for decades. Exploiting its own deliberate failure, the DoPT issued a “clarificatory” letter on October 14, 2004. In Paragraph 9 of this letter, the DoPT introduced a lethal sleight of hand: it declared that for PSU and bank employees where equivalence had not been evaluated, their salary income would be counted towards the creamy layer threshold.
The profound injustice of this bureaucratic fiat is staggering. Consider two brothers belonging to an OBC community. One is a lower-division clerk in a Union government ministry; the other is a clerk in a state Public Sector Undertaking. By the rules of the 1993 OM, the government clerk’s salary is ignored and his children remain eligible for OBC reservation. But for the PSU clerk, because the government failed to establish equivalence, the 2004 “clarification” arbitrarily weaponises his salary against him. If his modest wage crosses the threshold, his children are thrown into the ‘creamy layer’ and denied reservation.
The DoPT, lacking the constitutional authority to amend a Cabinet-approved policy formulated on the directions of the Supreme Court, essentially fabricated a dual-track system within the same social class. It weaponised the income metric to artificially inflate the “creamy layer,” thereby systematically denying OBC candidates their constitutional due and, consequently, allowing reserved vacancies to lapse or be reallocated.
The brazenness of this exclusion is laid bare when one examines the Union government’s own contradictory positions. As the judgment records, the DoPT persisted with this illegality despite a 2019 legal opinion from the law secretary advising against it, the explicit stance of the National Commission for Backward Classes (NCBC), and the admonitions of the Parliamentary Committee on Welfare of OBCs.
The move exposes the hypocrisy of the ruling dispensation when compared to its defence of the Economically Weaker Sections (EWS) quota. In the EWS litigation (Neil Aurelio Nunes), the Union explicitly defended a Rs. 8 lakh threshold that included salary, arguing that this was distinct from the OBC creamy layer criteria which deliberately excluded salary. Yet, in the present case, the same State argued the exact opposite to deny OBC candidates their rights. Such instrumentalism is not mere legal strategy; it is the ideological flexibility of dominant classes adapting their arguments solely to protect their monopoly over public employment.
The 2026 Supreme Court judgment meticulously dismantles this artifice. The court correctly observed that the 2004 letter could not overrule the substantive framework of the 1993 OM. More fundamentally, the court grounded its ruling in the bedrock of Article 14 (Equality). To treat similarly placed individuals – for example, a clerk in the government and a clerk in a PSU – differently, subjecting one to a punitive salary inclusion while exempting the other, constitutes “hostile discrimination.” As the court noted, relying on the jurisprudence of N.M. Thomas, equality of opportunity admits discrimination with reason, but prohibits discrimination without reason.
The judgment reveals the lengths to which the DoPT went to defend the indefensible. In the case of one respondent from Kerala, the DoPT first demanded an equivalence order from the state government. When the candidate actually produced a valid equivalence order issued by the Kerala government proving his mother was a Group C employee in a state PSU, the DoPT simply ignored it, altering its verification norms midway through the Civil Services Examination process. This was also a blatant violation of constitutional federalism. As the Kerala high court pointed out, “state public services” fall under the exclusive domain of the state List in the Seventh Schedule. For the DoPT – a central agency – to arbitrarily reject a state government’s equivalence order concerning its own PSU employees is an act of unconstitutional overreach, centralising power at the expense of both the state’s autonomy and the marginalised applicant’s rights. It is the behaviour of an institution acting not as a neutral arbiter of rules, but as an adversarial litigant fighting to preserve upper-caste hegemony over the praetorian guard of the State.
While the Supreme Court has re-established the legal position, forcing the Union to evaluate creamy layer status strictly on the parameters of the 1993 OM without the corrupting influence of the 2004 letter’s ninth paragraph, there has been a human cost for the 22 years during which this “clarificatory” letter was followed.
Even for successful respondents and intervenors in this case, who appeared for the civil services examinations as long ago as 2012 and 2013, justice comes after a 14-year legal battle. The court has directed the creation of supernumerary posts to finally accommodate them. But who compensates them for the lost years of seniority and the sheer financial exhaustion of fighting the Indian state?