The Center told the Supreme Court on Sunday that it would stick to the annual income limit criteria of Rs 8 lakh which allows EWS applicants to a 10% reservation in admissions to educational institutions, including medical schools and government jobs, but promised to tweak other EWSs. – criteria somewhat linked from next year.
The committee advised the implementation of its recommendations from next year, which would mean that the EWS admissions quota for medical admissions for the current academic year, which is not yet over, would be based on the 2019 criteria. The committee said: “The existing system, which has lasted since 2019, if disrupted at the end or end of the process would create more complications than expected, both for beneficiaries and for beneficiaries. authorities.”
Responding to questions from the court on the justification for the Rs 8 lakh limit, the committee said: “The annual distribution of household income of EWS candidates qualified for NEET-UG and JEE (Principal) for 2020 reveals that only 9% and 8.2% of EWS applicants were found in the Rs 5-8 lakhs income bracket, respectively. In other words, most of the selected applicants who benefited from the EWS reservation had an annual family income of less than Rs 5 lakh. This is why the committee came to the conclusion that the existing annual income criterion of Rs 8 lakh is not too inclusive. ”
The government said it accepted the Ajay Bhushan Pandey committee report, which recommended maintaining the Rs 8 lakh income limit with runners after a detailed analysis of the criteria. Seeking to answer the tribunal’s questions, the committee differentiated it from the income criteria adopted to exclude the creamy layer among CBOs from quotas. The committee, made up of former finance secretary Pandey, Professor VK Malhotra of the ICSSR and the government’s chief economic adviser Sanjeev Sanyal, was established on November 30 and submitted its report to the government on December 31 afterwards. eight meetings.
The committee said that “the SAP can, however, exclude, regardless of income, a person whose family owns 5 acres of farmland or more (as was included in the 2019 criteria which were challenged in the SC) . The change from the EWS 2019 standards would be the exclusion of residential asset criteria which have proven difficult to collect and verify and a burden of compliance. The criteria for residential assets had raised serious objections from the SC on the grounds that the value of a residential asset varies considerably between urban and rural areas and even within large cities like Mumbai depending on the location of the property. residential.
The Center had set up the committee to review the criteria for SAP 2019 after a SC bench led by judges DY Chandrachud remarked on October 7: “The economic backwardness is a realistic thing. There is no doubt that people do not have the money to buy books or even to eat. But when it comes to SAPs, they are advanced classes and there is no social or educational backwardness among them. So can you apply the same limit criterion of Rs 8 lakh for creamy layer to EWS? Remember that when it comes to EWS, we are not dealing with social and educational backwardness. What was the basis for setting the limit or did you just lift the criteria for the creamy layer and set it for EWS. The committee pointed out that the limit of Rs 8 lakh includes all family income, including agricultural sources, which makes the exercise more stringent than in the case of OBC quotas.
The committee said: “The current annual gross family income limit for SAP of Rs 8 lakh or less can be kept. In other words, only families whose annual income reaches Rs 8 lakh would be eligible to benefit from the EWS reservation. The definition of “family” and income would remain the same as that in the memorandum of January 17, 2019. ”
In the case of admissions to educational institutions, the sudden adoption of a new criterion would inevitably and necessarily delay the process by several months, which would have an inevitable cascading effect on all future admissions and educational / teaching / activities. review, which are time-limited under various statutory / judicial requirements, he said. The committee also suggested a three-year looped monitoring cycle of the implementation of the new criteria it suggested to make the required corrections going forward.
Examine in detail the question raised by the SC: whether an annual family income of Rs 8 lakh is too high as a threshold to identify the SAP, and whether or not it mechanically adopted a number as it was also used for the creamy layer OBC , the committee found that although the specific number of Rs 8 lakh appears to be the same as the OBC creamy layer cutoff, the application of the cutoff is very different in EWS and OBC as the two have different contexts.
“The income criterion for EWS is much stricter than that for OBC creamy layer. First, the EWS criteria relate to the fiscal year preceding the year of application while the income criterion for the creamy layer in the OBC category is applicable to the gross annual income for three consecutive years. Second, in case of OBC creamy layer decision, income from wages, agriculture and traditional craft professions are excluded from consideration while the Rs 8 lakh criterion for SAP includes those from all sources including agriculture. So, although it is the same number of cuts, their composition is different and, therefore, the two cannot be assimilated, ”he explained.
In addition, subject to EWS, the definition of family income includes the income of the applicant, their parents, siblings under 18, spouse, and children under 18. “In other words, it means that the income of three generations is included in family income for the purposes of the SAP. The SAP income criteria also include agricultural income that is not subject to income tax. This should be kept in mind when comparing SAP income criteria with income tax brackets, ”he said.
The Pandey committee report said: “In accordance with current tax standards, the effective personal income tax is zero for those whose annual income does not exceed Rs 5 lakh. After taking advantage of the various provisions for deductions, savings, insurance, etc., the taxpayer may not have to pay tax up to an annual income of Rs 7-8 lakh. Thus, the EWS threshold of Rs 8 lakh, if applied to a single individual, is in the tax requirements stage for zero taxation. Once applied to include family income and farm income, however, it becomes much more demanding compared to the personal income tax exemption limit, ”he explained.
Agreeing with SC’s reservations against the residential asset criteria specified in the 2019 standards, the committee said it was of the view that “in substance as well as for ease, convenience and simplicity , the residential asset zone criteria should be omitted altogether as it does. do not reflect true economic conditions and also pose serious complications and burden for SAP families without commensurate benefits ”.