Supreme Court: OBC 'Creamy Layer' Cannot Be Decided Only by Parents' Income

March 13, 2026 - In an important judgement on Thursday (March 12), the Supreme Court of India ruled that the “creamy layer” status in OBC reservation cannot be determined only on the basis of parents' income. The Court said that the nature and status of the parents’ jobs — such as positions in government, universities, banks or public sector undertakings (PSUs) — must also be considered.

Currently, the income threshold to determine “creamy layer” is Rs 8 lakh annually.

A Bench comprising Justice PS Narasimha and Justice R Mahadevan dismissed the Central Government’s appeals challenging decisions of the Madras High Court, Kerala High Court and Delhi High Court.

The Bench held that the Department of Personnel and Training (DoPT) clarification dated October 14, 2004, contradicted the government’s 1993 Office Memorandum (OM) on creamy layer determination.

According to the 1993 OM, children of Group A (Class-I) officers and certain Group B officers are considered part of the creamy layer and therefore ineligible for OBC reservation benefits. Children of Group C and D employees remain eligible even if income exceeds the limit.

For other cases, the court noted that income excluding salary and agricultural earnings was used to determine whether a family falls within the creamy layer threshold. The income limit was Rs 2.5 lakh at the time.

This ruling will impact children of PSU and private sector employees, who were previously judged only on income, unlike government employees, where job category determined OBC eligibility.

Source: Media Reports

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