₹8 lakh income ‘reasonable’ cap for EWS quota, Centre tells Supreme Court

It says the income criterion for EWS is ‘more stringent’ than the one for the OBC creamy layer.

Updated - January 03, 2022 07:40 am IST

Published - January 02, 2022 12:22 pm IST - NEW DELHI

A view of the Supreme Court of India. File

A view of the Supreme Court of India. File

A government committee report in the Supreme Court has said that “income” is a “feasible criterion” for defining the “Economical Weaker Sections” (EWS) in society and the annual family income of ₹8 lakh is a “reasonable” threshold to determine EWS in order to extend reservation in admissions and jobs.

“A feasible criterion for defining EWS can be based on income [family income]. A threshold of ₹8 lakh of annual family income, in the current situation, seems reasonable for determining EWS,” the committee report submitted as part of a government affidavit concluded.

The committee did not agree with the notion that the Centre had “mechanically adopted” ₹ 8 lakh as a number because it was also used for the OBC creamy layer cut-off. It said the income criterion for EWS was “more stringent” than the one for the OBC creamy layer.

“Firstly, EWS’s criteria relates to the financial year prior to the year of application whereas the income criterion for the creamy layer in OBC category is applicable to gross annual income for three consecutive years. Secondly, in case of OBC creamy layer, income from salaries, agriculture and traditional artisanal professions are excluded from the consideration whereas the ₹8 lakh criteria for EWS includes all sources, including farming. So, despite being the same cut-off number, their composition is different and hence, the two cannot be equated,” the committee reasoned.

It found no fault in the uniform application of the ₹8-lakh criteria across the country. “The desirability of a uniform income-based threshold has been upheld by the Supreme Court, and it can be adopted across the country as a matter of economic and social policy,” it said.


NEET aspirants’ plea

The report is the result of the Supreme Court’s repeated grilling of the government, since October, to explain how it zeroed in on the figure of ‘₹8 lakh’ as the annual income criterion to identify EWS among forward classes of society for grant of 10% reservation in NEET medical admissions under the All India Quota (AIQ) category. The court was hearing a batch of petitions filed by NEET aspirants challenging a July 29 notification of the Centre announcing 27% quota to OBCs and 10% reservation to EWS in AIQ.

The Supreme Court’s query was significant as the One Hundred and Third Constitutional Amendment of 2019, which introduced the 10% EWS quota, is itself under challenge before a larger Bench. The Amendment is under question for making economic criterion as the sole ground for grant of reservation benefits.

On November 25, the Centre had informed the court that it had taken a considered decision to revisit the criteria for determining EWS. The Centre had then formed an expert committee comprising Ajay Bhushan Pandey, former Finance Secretary; professor V.K. Malhotra, Member Secretary, ICSSR; and Sanjeev Sanyal, Principal Economic Adviser to the Government of India. The committee had submitted its report on December 31.

“The current gross annual family income limit for EWS of ₹8 lakh or less may be retained. In other words, only those families whose annual income is up to ₹8 lakh would be eligible to get the benefit of EWS reservation,” the report said.

The committee said the ₹8 lakh criterion struck a “fine balance” between over-inclusion and inclusion errors.

“The figure ensures that most low-income people who are not required to pay income tax are not excluded and are covered in EWS and at the same time it should not be so high that it becomes over-inclusive by including many incomes tax-paying middle-and high-income families into EWS. Though we may not completely eliminate yet we can try to minimise both exclusions as well as inclusion errors. Therefore, considering that the currently effective income tax exemption limit is around ₹8 lakh for individuals, the committee is of the view that the gross annual income limit of ₹8 lakh for the entire family would be reasonable for inclusion into EWS,” the report reasoned.

‘Vexed question’

The committee also deliberated upon the “vexed question” as to from which year the criteria suggested in his report should be used, adopted and made applicable.

NEET admissions have been suspended since November 25 when the government tasked the committee to check on the viability of the ₹8-lakh income threshold. This had led to massive protests by resident doctors in Delhi.

The report noted that admissions and appointments under the EWS quota for the current year was at its fag end. The criteria for these admissions and appointments were set way back in 2019. Any disturbance in the process now would only create undue delay for months and other “complications”. The committee said any changes or recommendations in EWS criteria made by it in its report should come into effect only in the future.

“In case of admissions to educational institutions, sudden adoption of a new criteria inevitably and necessarily would delay the process by several months which would have an inevitable cascading effect on all future admissions and educational activities/teaching/examination which are time-bound under various statutory/judicial time prescriptions. Under these circumstances, it is completely unadvisable and impractical to apply the new criteria (which are being recommended in this report) and change the goalpost in the midst of the on-going processes resulting in inevitable delay and avoidable complications,” the committee recommended.

The Supreme Court is scheduled to take up the case on January 6.

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