The Union Cabinet on Thursday raised the income slab for the “creamy layer” under the other backward classes (OBCs) category from the existing Rs 4.5 lakh to Rs 6 lakh per annum.

The new ceiling implies that wards of those with an annual income of over Rs 6 lakh cannot avail the 27 per cent reservation for the OBCs in jobs and admissions. The move excludes “socially advanced” people from the purview of reservation and bring about “an equity and greater inclusiveness in the society,” according to an official statement.

“The increase in income limit to exclude the creamy layer is in keeping with the increase in the consumer price index and would enable more persons to take advantage of reservation benefits extended to the OBCs in government services and admission to central educational institutions,” it added.

The Cabinet decision came after a group of ministers headed by Finance Minister P Chidambaram agreed on the criterion originally proposed by the Social Justice Ministry.

The National Commission for Backward Classes had suggested fixing the slab at Rs 12 lakh in urban areas and Rs 9 lakh in smaller cities. The Social Justice Ministry, however, opposed raising the bar to that extent, contending that such a move would be disadvantageous to the poor and deserving.

The last revision in creamy layer income was done in 2008.

Meanwhile, the Cabinet Committee on Economic Affairs has decided to continue with the present monthly food grain allocation for above poverty line (APL) families under the Targeted Public Distribution System, in place since June 2011. APL families in 22 states and Union territories are entitled to 15 kg of food grain per family while in 13 states and Union territories, they can avail 35 kg.