A higher income ceiling for the ‘creamy layer’ among OBC reservations approved.

Cabinet hands out pre-poll bonanzas
A higher income ceiling for the ‘creamy layer’ among OBC reservations approved.

Impending elections in five states and for the next Lok Sabha appeared to have left their mark on several decisions by the Union Cabinet that addressed key sections of the electorate. The Cabinet met today after a near two-week hiatus as a result of Prime Minister Manmohan Singh’s visits to the United States and France.

Key among 20-odd decisions today were approval of a higher income ceiling for the “creamy layer” among reservations for other backward classes (OBC), bonuses for railway workers and journalists, approval for setting up 12 new central universities and Rs 325 crore for quality education in Islamic madrassas.

The higher cut-off to qualify for the “creamy layer” — which refers to second-generation beneficiaries of caste reservations — from Rs 2.5 lakh a year to Rs 4.5 lakh is significant.

One, it means more affluent backward castes now become eligible for caste-based reservations in educational institutions, public sector jobs and a range of other services.

Two, the decision virtually defeats a Supreme Court requirement in its ruling this year to keep the “creamy layer” out of OBC quotas. The first ceiling for OBC reservation was fixed at Rs one lakh annually in 1993 and was increased to Rs 2.5 lakh in 2004.

The Cabinet took this decision on the basis of recommendations of the National Commission for Backward Classes which had been assigned the task of reviewing the “creamy layer” definition last year. The HRD ministry had asked the Commission to review the income limit for creamy layer in December 2007.

The Supreme Court had, in April 2008, upheld OBC quota safter nearly a year of litigation but had clearly said that creamy layer should be kept out. Legal experts said the decision can be challenged in court.

The Union Cabinet also approved 73 days productivity-linked bonus (PLB) for non-gazetted Indian Railways employees. Also approved is a higher wage ceiling of Rs 3,500 per month to calculate PLB for all government employees, including those working for the Railways, against the current practice of limiting it to Rs 2,500 per month. This will be effective from 1 April, 2006.

Finance Minister P Chidambaram said that in the 11th five-year plan, Rs 625 crore will be released for madrassas, of which Rs 325 crore has been released. The scheme will cover 4,500 to 6,000 madrassas, dar-ul-ulooms, and maktabs and benefit nearly 700,000 students. “This will be a 100 per cent centrally funded scheme,” he added.