​​​​1. Inadequate response: The ₹8 lakh income criteria to identify EWS are not reasonably explained by the Government

  • Page 6/Editorial
  • GS 2: Laws for vulnerable sections

Context: The Government-appointed committee has submitted to the Supreme Court that the annual family income of ₹8 lakh is “a reasonable” threshold to determine if someone belongs to economically weaker sections to avail 10% reservations in admissions and jobs.

  1. The pleas were filed by students challenging the Centre and Medical Counselling Committee (MCC) July 29, 2021 notices providing 27% reservation for Other Backward Class (OBC) and 10% for EWS category in the National Eligibility cum Entrance Test (NEET-PG) admissions for medical courses for the current academic year.
  2. The government had constituted the member committee, comprising Ajay Bhushan Pandey, former finance secretary, VK Malhotra, member secretary, ICSSR and Sanjeev Sanyal, Principal Economic Adviser to Centre, on November 30, last year as per the assurance given to the top court to revisit the criteria for determining the economically weaker sections.

Reasons for the committee’s adopted criteria:

  1. Against Abrupt changes: It said that changing the criteria midway is also bound to result in spate of litigations in courts across the country by the people whose eligibility would change suddenly.
  2. Bringing the two categories at par: By adopting same criteria of ₹8Lakh. Further, Rs 8 lakh cut off also has a link with the income tax exemption limit and in the past.
  3. The EWS criteria is more stringent: the income criterion was “more stringent” than the one for the OBC creamy layer.
    • In EWS family includes the candidate, his/her parents, under-18 siblings, spouse, and his/her under-18 children, whereas for creamy the OBC family includes the candidate and his parents and minor children.
    • For OBC household gross income should be above Rs 8 lakh per annum for three consecutive years, whereas to be eligible for EWS reservation, the beneficiary household income has to be below Rs 8 lakh in the preceding financial year.
  4. Ease of Implementation: Having different income limits for different geographies – rural, urban, metro or states will create complications, especially considering people have become more mobile and increasingly moving from one part of the country to another for jobs, studies, business etc.

Problems raised regarding setting the criteria at ₹8Lakh

  1. Problem with adopting economic criteria alone: The Court had said that the OBC category is socially and educationally backward, and had therefore additional impediments to overcome, and had asked whether it “would… be arbitrary to provide the same income limit both for the OBC and EWS categories”.
  2. Government had “mechanically” adopted ₹8 lakh criteria: as the cut-off because it was used to identify the OBC creamy layer. While asserting that an annual family income criterion of ₹8 lakh is the right approach, the committee does not present any data on the estimated number of EWS persons in the population based on this.
  3. There is a regional & social difference in purchase power which are not factored in.  It was suggested that all differences in purchasing power across urban/rural regions and per capita income/GDP across States must be considered to arrive at this number. However the suggests that this exercise would be infeasible and complex.
  4. Its nearly of no help to any category: If available consumer expenditure surveys such as the 2011-12 NSSO report, Key Indicators of Household Consumer Expenditure are any indication, a bulk of the population will be eligible for reservations under the “below ₹8 lakh” cut-off under the EWS category, rendering the limit irrational.
  5. Income tax exemption limit is ₹2.5Lakh: The committee’s assertion that ₹ 8 lakh corresponds to the “effective income tax exemption limit” even as the only income slab exempt from paying taxes was for those earning below ₹2.5 lakh, also renders the criteria on “being economically weak” as less stringent.
  6. The submission lays emphasis on the fact that outcomes in the recent entrance and recruitment examinations (NEET, UPSC, JEE) showed an even bunching of eligible candidates in different income brackets (0-₹2.5 lakh, ₹2.5-₹5 lakh, ₹5-₹8 lakh), but it does not explain why marks cut-offs were even lower in recruitment exams than that of the socially and educationally backward OBCs.

Conclusion: The validity of the 103rd Constitution Amendment, through which the EWS quota was introduced in 2019, is in any case still before a Constitution Bench. But the apex court must seek more clarity on the criteria adopted by the Government committee to set the income limit for identifying the EWS sections eligible for reservations.


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