Last Updated:March 13, 2026, 14:35 IST

Supreme Court court rejected the Centre’s plea to rely solely on income/wealth for PSU and private sector employees.

The Supreme Court has clarified that a candidate’s exclusion from the OBC quota cannot be decided solely based on parental income. A bench of Justices P S Narasimha and R Mahadevan ruled that the status and category of a parent’s job must also be considered, with income and wealth acting only as additional criteria. Currently, the threshold income to determine ‘creamy layer’ is Rs 8 lakh per annum.

Implications for PSU and private sector wards

The ruling affects children of PSU and private sector employees, who were previously judged only on income, unlike government employees, where job category determined OBC eligibility. Children of Group A and B government employees are excluded based on job status, while wards of Group C and D employees remain eligible even if income exceeds the limit.

Centre’s 2004 clarification overruled

The court rejected the Centre’s plea to rely solely on income/wealth for PSU and private sector employees, noting that overemphasis on the 2004 letter undermined the 1993 Office Memorandum framework. Justice Mahadevan stated that considering income alone “is clearly unsustainable in law."

Equality across OBC candidates

The judgment stressed that adopting different criteria for children of government employees versus others would amount to discrimination. The SC upheld the principle that “treating similarly placed employees differently… would amount to hostile discrimination."

News india Income Cannot Alone Decide OBC ‘Creamy Layer’ Status: Supreme Court

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