EWS reservation – No change in gross annual income threshold of Rs 8 Lakhs: center tells Supreme Court

The central government told the Supreme Court in an affidavit that it had decided to accept the recommendation made by an expert committee to maintain the limit of Rs 8 lakhs of gross annual income for bookings from the economically more section. low (EWS).

The Center also accepted the recommendation to omit the residential asset criteria for SAP eligibility. However, ongoing admissions, including NEET-PG counseling, will proceed according to existing criteria and revised criteria will be applied from the next academic year, the Center added.

The affidavit was filed in response to a written motion challenging the Centre’s decision to bring the EWS / OBC reserve into the All India quota for NEETs. The Supreme Court had previously expressed doubts as to the reasonableness of the income criteria of Rs 8 lakhs for EWS, following which the Center agreed to review the same after forming a committee of experts. The Center also suspended the NEET-PG counseling process due to the case pending before the Supreme Court.

NEET-PG advice: the center decides to keep the existing SAP criteria; Files an affidavit in the Supreme Court

Economically Weaker Sections Reservation Criteria Review Committee (SAP)

The central government formulated an Economically Weaker Sections (SAP) Reserve Criteria Review Committee on November 30, 2021, including:

  • Shri Ajay Bhusan Pandey – Former Finance Secretary, GOI
  • Prof VK Malhotra – Member Secretary, ICSSR
  • Shri Sanjeev Sanyal – Senior Economic Advisor to GOI (Organizing Member)

The Committee was to:

  1. Review the OM criteria of 17-01-2019 to determine the SAP category taking into account the observations of the Honorable Supreme Court in its order of 21 October 2021
  2. Examine the different approaches followed so far in the country to identify EWS and
  3. Recommend criteria that could be adopted to identify the SAP category in the future

Criteria for determining the EWS reservation that existed before the report

According to the OM of January 17, 201.9 people who are not covered by the SC, ST and OBC reservation scheme and whose family has a gross annual income of less than Rs 8 lakh must be identified as SAP to benefit from the reservation.

In addition, persons whose family owns or owns any of the following assets should be excluded from being identified as SAP:

(a) five or more acres of farmland;

(b) residential land of 100 square yards or more in notified municipalities and 200 square yards or more in areas other than notified municipalities; and

(c) a residential apartment of 1000 square feet or more

The word family included the candidate, his parents, siblings under 18, spouse and children under 18.

Income should also include income from all sources i.e. wages, agriculture, business, profession, etc. for the fiscal year preceding the year of the request.

Revised criteria to determine the EWS reservation

Using a set of indicators minimizing Type I (Minimize inclusion of undeserving) and Type II (Minimize exclusion of deserving) errors, the Committee arrived at the revised EWS criteria in which :

A. Only families whose annual income is up to Rs 8 Lakh would be eligible to benefit from the EWS reservation

A.1 Although the specific number of Rs 8 Lakhs seems to be the same as the OBC creamy layer cutoff, the application of the cutoff is very different in EWS and OBC because two have different contexts

The Supreme Court had at first sight observed that the application of the criteria of limit of income (Rs 8 lakhs of annual income) of the lawyer OBC Creamy to EWS was unreasonable, because the latter had no concept of social and economic backwardness. .

In this regard, the Committee issued the opinion:

  • The EWS criteria covered the fiscal year preceding the year of application while the income criterion for the creamy layer in the OBC category was applicable to the gross annual income for three consecutive years.
  • To decide on the OBC creamy layer, income from wages, agriculture and traditional craft professions were excluded from consideration while the criteria of Rs 8 lakh for SAP included those from all sources including agriculture.

“The committee found that although the specific number of Rs 8 lakhs appears to be the same as the OBC creamy layer threshold, the application of the threshold is very different in EWS and OBC as the two have different contexts. Income criterion for the EWS is much stricter than that for the creamy layer OBC “, according to the report.

A.2 A threshold lower than Rs 8 Lakhs on family income would be unduly restrictive and would lead to errors of exclusion of deserving eligible persons

The Committee referred in this regard to the definition of family for AMPs and to including agricultural income (which is not subject to income tax) in the income criteria. In view of the current income tax reforms, in which the effective personal income tax was zero for those whose annual income does not exceed Rs 5 lakhs, the Committee said that after taking advantage of the various provisions for deductions, savings, insurance etc., the taxpayer might not need to pay any tax up to an annual income of Rs 7-8 lakhs.

The committee also noted that the application of the EWS cut of Rs 8 lakh to a single individual was in the approximate stage of income tax requirements for zero taxation.

In its report, the Committee also indicated that the definition of “family” and income would remain the same as that in the MO of January 17, 2019.

B. Regardless of income, a person whose family owns 5 acres or more of farmland will be excluded from SAP.

The Committee justified the exclusion of a person whose family owns 5 acres of farmland from SAP in its report by stating that there was variability and a lack of information on farm income since it was exempt. income tax and was therefore not verifiable. It was further stated that ownership of agricultural land could be used as an exclusion criterion as it was not taken into account by income tax or other authorities.

C. Elimination of criteria relating to residential assets

In this regard, the Committee stated in its report that the use of residential plot size and house floor space as an asset criterion for identifying AMPs is complex. He added that while these criteria also applied to the general rural category, it was more relevant for those in urban areas. In its report, the Committee indicated that it had considered whether the house or land area thresholds in the SAP criteria should take into account the difference in their values ​​according to geographic distributions and recognized that it was not easy to specify a general threshold for a residential area. for the whole country.

“Even if we replace the area thresholds in the EWS criteria with residential house or plot values, that still wouldn’t solve the problem as it would then take lakhs of applicants every year to have their homes and plots assessed. by the notified authorities, “ the Committee added.

The Committee was also of the opinion that the correct economic situation of the candidate or his family may not be reflected if the dwelling house is only used for habitation and does not generate income. Therefore, any exclusion criteria from the SAP based on home ownership may result in unwanted exclusion of deserving applicants.

“It is the family income that matters and determines the economic conditions of the family and which should be the basis for inclusion or exclusion in the EWS”, the Committee in its report said.

Residential criteria were also omitted altogether as they also posed serious complications and a burden on SAP families without commensurate benefits.

Considering that disrupting the existing system which has been going on since 2019 at the end of the day would create more complications than expected both for the beneficiaries and for the authorities, the Committee recommended to introduce the new criteria from the next academic year / cycle of admission.

Data exchange and information technology to be used more actively to verify income and assets, improve targeting of EWS reservations and government programs; Three-year feedback loop cycle to use to monitor actual criteria results and then adjust them in the future

To manage the review process for AMPs in the future, the Committee felt that the traditional approach of increasingly detailed surveys or multidimensional studies at frequent intervals on its own might not be useful for the operation. SAP reserves. Noting that the same thing was expensive, complicated and inconsistent, the Committee felt that a better approach was to use a feedback loop to review the actual results of implementing the criteria every three years. The Committee also proposed to favor an “Agile” approach to a “Waterfall” methodology.

Committee recommendations

The Committee summarized the recommendations as follows:

(i) The current annual gross family income limit for AMPs of Rs. 8.00 lakh or less can be used. 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 of the OM of January 17, 2019.

(ii) However, the SAP can exclude, regardless of income, a person whose family owns 5 acres or more of farmland.

(iii) The residential asset criteria can be removed completely.

Criteria revised from next year

The Committee also considered that disrupting the existing system which has been in operation since 2019 at the end of the month would create more complications than expected for both beneficiaries and the authorities. In this regard, the Committee recommended to introduce the new criteria from the next academic year.

“Under these circumstances, it is highly inadvisable and impractical to apply the new criteria (which are recommended in this report) and change the focus in the midst of ongoing processes, resulting in inevitable delays and complications. preventable. When the existing system is underway from 2019, no serious harm would be done if this continues this year as well. Changing the criteria halfway will also result in a series of litigation in various courts across the country by people whose eligibility suddenly changes.

The Committee, therefore, after having analyzed the pros and cons on this issue and having given serious consideration, recommends that the existing and ongoing criteria in each ongoing process where an SAP reservation is available be maintained and that the recommended criteria in this report can be made applicable from the next announcement / admission cycle, “ Committee had stated the report in this regard.

Based on the recommendations, the central government agreed to accept the Committee’s recommendations, including the recommendation to apply the new criteria prospectively.

It can be noted that medical residents across the country have recently launched protests across the country against the delay of the NEET-PG council. The Supreme Court is due to hear the case on January 6.

The Affidavit of the Center came in the case Neil Aurelio Nunes and Others v Union of India and Others which was filed by Dubey Law Associates and Dr Charu Mathur Advocate-on-Record.

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