With elections to the Lok Sabha and some state assemblies round the corner, the government on Friday raised the income ceiling for creamy layer from Rs 2.5 lakh to Rs 4.5 lakh annually in a move that will cover more OBCs under the reservation criteria. The Cabinet decision would be communicated to the Ministries of HRD and Department of Personnel and Training for issuance of appropriate orders to Central educational institutions and government departments for pursuance of the order.

The Union Cabinet today gave its approval for revising the income criteria for creamy layer from the present Rs 2.5 lakhs per annum to Rs 4.5 lakhs per annum," Information and Broadcasting Minister Priyaranjan Dasmunshi said here. The proposal had been mooted by the Ministry of Social Justice and Empowerment (MSJE) on the basis of recommendations of the National Commission for Backward Classes (NCBC). The proposal was discussed at an inter-governmental level, involving the ministries of Tribal Affairs, Home, DOPT, Law and HRD besides the Social Justice and Empowerment. "None of the ministries gave any negative remark on the recommendations. The HRD ministry gave certain suggestions like spelling out clear-cut modalities for giving reservation benefits with this enhanced ceilings to those working in private sector and public sector units (PSUs)," an official of the Social Justice Ministry said.

The first ceiling for OBC reservation was fixed at Rs one lakh annually in 1993, which was increased to Rs 2.5 lakh in 2004.