Achchey Din seems likely to dawn on the armed forces, or ex-personnel in
particular. The government is giving final shape to their long standing
demand of adopting One-Rank One-Pension (OROP).
Bureaucrats are currently burning midnight oil to pore over the fine print of at least four options to implement the OROP scheme. A source in government, aware of the developments, says a decision is expected soon and a large provision in the Budget, or soon after.
"We are very hopeful that the long overdue injustice to the armed forces will be reversed in this budget," says Maj Gen Satbir Singh (Retd) who leads the IESM or Indian Ex-Servicemen Movement, which lobbied intensely for OROP since 2008. "Both UPA and NDA have agreed to our OROP so we see no reason that it will be held back now," he says.
For 40 years the retirees, now numbering three million, have been bristling under what they perceive as "neglect and humiliation" by political parties and successive governments. Its extreme manifestation, from their perspective, was the denial of OROP. Lack of empirical data on the cost of this pension, plus political reluctance of the parties fuelled much of the denial and delay. The former military staff launched public agitations to make their case, often embarrassing the government.
Regardless of which of the four options the government decides upon ultimately, the roughly Rs 8,000 crore likely to be set aside for OROP should go a long way to calm the angry (wo)men in uniform, besides providing them a lifestyle befitting the status, say, one that a retired colonel or brigadier enjoys.
One choice before the government, says the same government source, is to do exactly as the ex-servicemen want: Give future and past retirees of the same rank from the Army, Navy and Air Force exactly the same pension. Essentially, this means that all Brigadiers or, say, Air Vice Marshals, would get the same pension regardless of when they retired, taking into account only their years in service and the number of years they held the rank. This formula, a literal interpretation of the phrase One-Rank One-Pension, has been accepted by government committees, including the Parliamentary Standing Committee on defence.
For instance, a colonel with 30-32 years of service, whose basic pay was around Rs. 26,000 before 2004 would have earned around Rs. 37,000 in 2014. OROP is expected to bridge the pension gap that arises due to this pay discrepancy. "Our demand is very simple: Today's pension for all previous retirees," says Singh.
But the government's estimates of cost of this pension have it pedalling back a little. Taking 2012 as the cut-off date, giving past retirees hikes that bring them on par with the highest pension paid to that rank in 2012, would cost a whopping Rs 16,000 crore, they argue. This has prompted a hunt for other options, meant to "balance" the exchequer with meeting armed force expectations.
A second option involves fixing the pension for pre-2006 retirees according to the 6th Pay Commission. Then, the government may pull a trick out of its hat and select the lowest pension paid since 2006 as the norm for older retirees. A version of this formula is already under implementation for Junior Commissioned Officers, Non-Commissioned Officers, and other ranks. It's possible this formula, with some tweaks, will be accepted, and result in the roughly Rs 8,000 crore allocation.
"It's obvious OROP is going to happen," says this government official. The discussions, this person says, is now in its final stage. There was a third choice, which involved bringing all ex-servicemen on par with the basic pay of the 6th Pay Commission, then calculate each retiree's pension individually, taking into account each one's years in service and length of time spent in the rank. This option is an "administrative nightmare" dogged, reportedly, by unavailable past data with the Controller of Defence Accounts, a wing of the ministry of defence. The lack of data is also a clear sign that the OROP debate has been based on weak databases and much groping in the dark.
A fourth and final option is where pension is to be fixed on the basis of an average or median. Separate groups of retirees who superannuated in bands of years, say, between 1990 and 2000, would be made. Those earning a pension below the average would get an enhanced pension, while the rest would be protected. This option, apparently easy to implement, is technically not OROP at all as it implies a different pension for retirees in the same rank, if they retired at different points of time.
The defence forces are mounting tremendous pressure on the government to ensure OROP isn't watered down. Earlier this month, they questioned defence minister Manohar Parrikar for saying that OROP would satisfy them "80 per cent." Their vociferous protest had the government assure full satisfaction. In 2009, angry retired armed personnel signed a petition in their own blood for then President Pratibha Patil. Reeling under such tough tactics, the UPA finally accepted OROP in 2012. But the Rs. 500 crore for it in last year's interim budget presented by finance minister P Chidambaram was seen as woefully inadequate. The veterans switched sides, now pinning their hopes on to the BJP's then prime minister-aspirant, Narendra Modi.
Five lakh ex-servicemen had assembled last spring at Rewari, on the outskirts of Delhi, to hear Modi promise OROP, should his party form the government. Behind the scenes, the ex-servicemen had already got an assurance from the party to consider their demand and publicly announce it, as a precondition for pulling in the spectacular crowd in Rewari. "For years we had requested, protested and demanded OROP. In 2014 we realised what would make a difference to politicians—votes. With our strength and influence over the village population, we could swing elections in many places," Gen (retd) Singh says.
OROP is an issue which could trip the BJP. It considers and projects itself as a fiercely nationalist party, a narrative meaningless without a robust national defence policy. It can scarcely afford to disappoint the defence forces. Nevertheless, the different versions of OROP indicate just how conflicted the issue is. The ex-servicemen never agreed that OROP will cost the Rs. 16000 predicted by the bureaucracy. They still hope for a Rs. 9000-12000 crore allocation for full OROP. The usually docile military retirees started getting heated up only after 2006. That year, the Sixth Pay Commission hiked central government pay significantly, to counter the private sector's fantastic offers to the similarly educated. As pension is always a proportion of salary, after this hike, the gap between pensions of ex-servicemen who retired before and after 2006 grew wider. Most jawans retire in their mid-thirties, and only an eighth of officers rise beyond the rank of colonel. The belief that the army would never catch up with the civil services' benefits also grew.
http://www.outlookindia.com/article/Achchey-Din
Bureaucrats are currently burning midnight oil to pore over the fine print of at least four options to implement the OROP scheme. A source in government, aware of the developments, says a decision is expected soon and a large provision in the Budget, or soon after.
"We are very hopeful that the long overdue injustice to the armed forces will be reversed in this budget," says Maj Gen Satbir Singh (Retd) who leads the IESM or Indian Ex-Servicemen Movement, which lobbied intensely for OROP since 2008. "Both UPA and NDA have agreed to our OROP so we see no reason that it will be held back now," he says.
For 40 years the retirees, now numbering three million, have been bristling under what they perceive as "neglect and humiliation" by political parties and successive governments. Its extreme manifestation, from their perspective, was the denial of OROP. Lack of empirical data on the cost of this pension, plus political reluctance of the parties fuelled much of the denial and delay. The former military staff launched public agitations to make their case, often embarrassing the government.
Regardless of which of the four options the government decides upon ultimately, the roughly Rs 8,000 crore likely to be set aside for OROP should go a long way to calm the angry (wo)men in uniform, besides providing them a lifestyle befitting the status, say, one that a retired colonel or brigadier enjoys.
One choice before the government, says the same government source, is to do exactly as the ex-servicemen want: Give future and past retirees of the same rank from the Army, Navy and Air Force exactly the same pension. Essentially, this means that all Brigadiers or, say, Air Vice Marshals, would get the same pension regardless of when they retired, taking into account only their years in service and the number of years they held the rank. This formula, a literal interpretation of the phrase One-Rank One-Pension, has been accepted by government committees, including the Parliamentary Standing Committee on defence.
For instance, a colonel with 30-32 years of service, whose basic pay was around Rs. 26,000 before 2004 would have earned around Rs. 37,000 in 2014. OROP is expected to bridge the pension gap that arises due to this pay discrepancy. "Our demand is very simple: Today's pension for all previous retirees," says Singh.
But the government's estimates of cost of this pension have it pedalling back a little. Taking 2012 as the cut-off date, giving past retirees hikes that bring them on par with the highest pension paid to that rank in 2012, would cost a whopping Rs 16,000 crore, they argue. This has prompted a hunt for other options, meant to "balance" the exchequer with meeting armed force expectations.
A second option involves fixing the pension for pre-2006 retirees according to the 6th Pay Commission. Then, the government may pull a trick out of its hat and select the lowest pension paid since 2006 as the norm for older retirees. A version of this formula is already under implementation for Junior Commissioned Officers, Non-Commissioned Officers, and other ranks. It's possible this formula, with some tweaks, will be accepted, and result in the roughly Rs 8,000 crore allocation.
"It's obvious OROP is going to happen," says this government official. The discussions, this person says, is now in its final stage. There was a third choice, which involved bringing all ex-servicemen on par with the basic pay of the 6th Pay Commission, then calculate each retiree's pension individually, taking into account each one's years in service and length of time spent in the rank. This option is an "administrative nightmare" dogged, reportedly, by unavailable past data with the Controller of Defence Accounts, a wing of the ministry of defence. The lack of data is also a clear sign that the OROP debate has been based on weak databases and much groping in the dark.
A fourth and final option is where pension is to be fixed on the basis of an average or median. Separate groups of retirees who superannuated in bands of years, say, between 1990 and 2000, would be made. Those earning a pension below the average would get an enhanced pension, while the rest would be protected. This option, apparently easy to implement, is technically not OROP at all as it implies a different pension for retirees in the same rank, if they retired at different points of time.
The defence forces are mounting tremendous pressure on the government to ensure OROP isn't watered down. Earlier this month, they questioned defence minister Manohar Parrikar for saying that OROP would satisfy them "80 per cent." Their vociferous protest had the government assure full satisfaction. In 2009, angry retired armed personnel signed a petition in their own blood for then President Pratibha Patil. Reeling under such tough tactics, the UPA finally accepted OROP in 2012. But the Rs. 500 crore for it in last year's interim budget presented by finance minister P Chidambaram was seen as woefully inadequate. The veterans switched sides, now pinning their hopes on to the BJP's then prime minister-aspirant, Narendra Modi.
Five lakh ex-servicemen had assembled last spring at Rewari, on the outskirts of Delhi, to hear Modi promise OROP, should his party form the government. Behind the scenes, the ex-servicemen had already got an assurance from the party to consider their demand and publicly announce it, as a precondition for pulling in the spectacular crowd in Rewari. "For years we had requested, protested and demanded OROP. In 2014 we realised what would make a difference to politicians—votes. With our strength and influence over the village population, we could swing elections in many places," Gen (retd) Singh says.
OROP is an issue which could trip the BJP. It considers and projects itself as a fiercely nationalist party, a narrative meaningless without a robust national defence policy. It can scarcely afford to disappoint the defence forces. Nevertheless, the different versions of OROP indicate just how conflicted the issue is. The ex-servicemen never agreed that OROP will cost the Rs. 16000 predicted by the bureaucracy. They still hope for a Rs. 9000-12000 crore allocation for full OROP. The usually docile military retirees started getting heated up only after 2006. That year, the Sixth Pay Commission hiked central government pay significantly, to counter the private sector's fantastic offers to the similarly educated. As pension is always a proportion of salary, after this hike, the gap between pensions of ex-servicemen who retired before and after 2006 grew wider. Most jawans retire in their mid-thirties, and only an eighth of officers rise beyond the rank of colonel. The belief that the army would never catch up with the civil services' benefits also grew.
http://www.outlookindia.com/article/Achchey-Din
