Economic Criterion Test

The Government of India in 1979, appointed a Backward Class Commission to investigate the conditions of socially and educationally backward classes within India, which came to be popularly known as ‘Mandal Commission’. The terms of reference of the Commission were

The report of the Commission was submitted and it was laid before Parliament in 1982 and 1983.The Government after considering the recommendations of the Commission issued a notification giving effect to the recommendations. Accordingly :

27% of the vacancies in civil posts and the services in the Government of India were reserved for the Socially and educationally backward classes (SEBCs).

This reservation to be applied to the vacancies to be filled by direct recruitment

Candidates belonging to SEBC recruited on the basis of merit in an open competition on the same standards prescribed for general category shall not be adjusted for this purpose. The notification was subsequently modified and the following changes were made:

Within the 27% of the vacancies in civil posts and services under the Government of India reserved for SEBCs, preference shall be given to the candidates belonging to the poorer sections of SEBCs.

10% of the vacancies shall be reserved for other economically backward sections of the people who are not covered by any of the existing schemes of reservation.

Several writ petitions were filed challenging the above two notifications issued by the Government.

The Court framed several questions that were raised .The Supreme Court on the issue of ‘Economic Criterion’ proposed to be introduced in recognition of Backward classes

Held :

Means test = here signifies imposition of an income limit, for the purpose of excluding persons (from the backward class) whose income is above the said limit. This submission is very often referred to as the >creamy layer = test. The very concept of a class denotes a number of persons having common traits which distinguish them from the others. If some of the members are far too advanced socially (includes economically and educationally) the connecting thread between them and the remaining class snaps. They would be misfits in the class. After excluding them alone would the class be a compact class. Difficulty however, really lies in drawing the line. The basis of exclusion should not merely be economic, unless the economic advancement is so high that it necessarily means social advancement. A member of a backward class, say a carpenter goes to the middle east and works there as a carpenter. If his annual income is taken it will be much higher than the Indian standard. Are his children in India to be excluded? Situation may be different if he rises so high economically that for example he becomes a factory owner, it means that his social status also rises and he would be in a position to provide jobs to the others, in such a case his income is just a measure of his social status. Even otherwise, there are many practical difficulties in imposing an income ceiling. For example, annual income of Rs.36,000/- may not count for much in a city like Bombay, Delhi or Calcutta, whereas it may be a handsome income in rural India. The line to be drawn must be a realistic one. Another question would be should such a line be uniform for the entire country or a given state or should it differ from rural to urban or so on.

Further, income from agriculture may be difficult to assess, the line may have to be drawn in relation to the extent of the holding. The income limit should be such as to mean and signify social advancement. At the same time it must be recognized that there are certain positions, the occupants of which can be treated as socially advanced without further inquiry. For example, if a backward class person becomes a member of Indian Administrative Service (IAS) or Indian Police Service (IPS)( these are the prestigious civil services in India) his status in society rises.

Keeping in mind all these considerations, we direct the government to specify the basis of exclusion- whether of income, extent of holding or otherwise of >creamy layer =. This is to be done in four months. On such determination, persons falling within the exclusionary rule shall cease to be members of such Backward class.

 The limits of reservation:

The Supreme Court affirmed the rule of 50% laid down in Balaji v State of Mysore( AIR 1963 SC 649) and held that the 27% reservations provided in the impugned notifications is well within the 50% limit, as the 27% put together with the reservation for the Scheduled castes and the scheduled tribes it totals to 49.5% and so this is within the permissible limit.

The proposed reservation of 10% of the posts in favor of economically poorer sections who do not fall under any other category of reservation (as provided in the notification) was held to unconstitutional. The Court held reservation of 10% of the vacancies among the open competition candidates on the basis of income/ property holding means, exclusion of others above that ceiling from the 10% seats. This bar is not permissible and it would mean debarring the person solely on the basis of his income/property. Therefore, it is unconstitutional.

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