One Rank One Pension
One Rank, one Pension (OROP), or same pension, for same rank and for the same length of service, irrespective of the date of retirement, was the basis for determining the pension and benefits of Indian Armed Forces till 1973. An all party ten member Parliamentary Panel, known as the Koshyari Committee after its Chairman, a veteran member of the BJP, examined the issue of grant of OROP to Armed Forces Personnel and submitted its report on 19 December 2011. The Koshyari Committee unanimously found merit in OROP and strongly recommended that, “Government should implement OROP in the defence forces across the board at the earliest and further that for future, the pay, allowances, pension, family pension, etc in respect of the defence personnel should be determined by a separate commission so that their peculiar terms” are properly taken into account.
Potential Beneficiaries of OROP
Potential beneficiaries of OROP is about 2.6 million Ex-servicemen, and 60,000 widows, including war widows, i.e., a combined total of 3.2 million, of whom about 86% are Widows, JCOs, NCOs, and other ranks, about 14 percent are officers. Out of the estimated outlay on OROP of Rs 8400 crores about Rs 6200 Crores will be on account of Widows, JCOs, NCOs, and other ranks, and about 2200 for Officers.
In the run up to the Indian general election of 2014, OROP became a politicized issue. It was an integral part of the election manifesto of many political parties including the INC and the BJP. Both Sonia Gandhi and Narendra Modi, at political rallies made repeated commitments to implement OROP, if elected. On 15 June 2015, despairing of the Government intent to implement OROP, Ex-servicemen Organizations launched nation wide protests, including hunger strikes. On 05 September 2015, the Defence Minister Manohar Parrikar announced that the government has accepted the concept of OROP and will implement it. In a statement issued by Defence Minister, he said “Despite huge financial burden, the government has taken a decision to implement the One Rank One Pension. Benefit of OROP will be given with effect from July 1, 2014, a date immediately after the present government assumed office”. The government has accepted all the demands of veterans except annual revision of Pension. The government has decided to revise the pension after every five years. Also, OROP arrears are to be paid in four half-yearly instalments; all widows, including war widows, to be paid arrears in one instalment. To begin with, OROP would be fixed on the basis of calendar year 2013. Pension will be re-fixed for all pensioners retiring in the same rank and same length of service. The government is considering appointing a committee under a judge to go into the issue of equalization of pension.
Legal and Financial Implications of OROP Implementation
The estimates of expenditure on account of OROP has undergone many revisions: according to early MOD estimates OROP was expected to cost – 3000 crores. The current estimates vary between 8,000-9,000 crores. Finance Ministry estimates for implementation of OROP in accordance with the accepted Koshyari definition, according to media reports in August 2015, were about 12000 crores , i.e., about 4000 crores more than estimated earlier.
Affordability of OROP-
Close examination of the financial implications of OROP by experts reveals OROP is affordable, and that opposition to it is based on ‘specious’ grounds. The estimated expenditure on OROP is a small fraction of the military pension budget of 54,500 crores(2015–16), which includes about 4,00,000 defence civilians. Defence civilians, which includes the entire civilian bureaucracy in the Ministry of Defence, retire at 60, are mostly based permanently in Delhi, and are not be covered by OROP. Ex-servicemen organisations have alledged that defence civilian bureaucracy, led by the Defence Secretary, has opposed grant of OROP. The Koshyari Committee disagreed with submissions by the Ministry of Defence and found “merit in the demand for One Rank One Pension by Armed Forces Personnel”, and urged the Government to implement OROP at the earliest.
Measures to reduce Armed Forces Pension bill-
The expenditure on military pensions can be drastically reduced by reducing the ratio of military pensioners to serving military personnel, which is 1.7 to 1. In comparison the ratio for civil pensioners to civil work force is 0.56 to 1. The 6 CPC and Koshyari Committee, to reduce the military pension bill, urged the Government to absorb Armed Forces personnel after their military engagement in Civil Government organisation including Police Organisation as is the custom in many countries, including in China, and in advanced economies like S Korea, Singapore, Israel, Switzerland, and the United States. The eminently sensible expedient of absorbing Armed Forces personnel after the end of their military service into suitable government organisations and departments where their unique skills, training, discipline and strengths can be optimally used, despite recommendations of the Parliament and Pay Commission, was ignored by the Government. This is mainly on account of want of energy and commitment by the MOD, and obstruction by Ministry of Home Affairs.
Sixth Central Pay Commission (6 CPC) Recommendations-
The 6 CPC found that Indian Para Military Forces, called Central Armed Police Forces—CAPFs, which has a total strength of about 7,00,000 (in 1996), and defence civilians in Ministry of Defence, which had a strength of 4,00,000, have a combined annual intake of around 35,000 personnel; in comparison Armed Forces personnel (Army, Air Force, and Navy) pensioned off every year (in 1996) was approximately 40,000. The 6 CPC on the basis of its analysis concluded that “potential to allow lateral shift of nearly all Defence Forces personnel to CPOs and various cadres of defence civilians exists”. The 6 CPC recommended that in future posts in the “CPOs/defence civilian organisations” should be filled by lateral transfer of Armed Forces personnel, including Short Service Commissioned Officers, after they complete their term of military service.
One Rank One Pension for Civil Services-
All officers of Civil services, who retire at the apex scale, i.e., the highest scale of pay in the Government of India, which is currently Rs. 80000(fixed), are covered by OROP. According to Avay Shukla, a former IAS officer, who retired at the apex grade, and is recipient of Apex Grade OROP linked pension, all officers, ie, 100% Indian Administrative Service (IAS), and Indian Foreign Service , Indian Forest Service(IFS) etc. retire at Apex pay grades, not with standing what their responsibilities or duties entailed. The OROP for the Civil services, Avay Shukla reveals, was achieved slyly, by “a slight of hand”, by a decree, “that all who retire in this scale (known loftily as the Apex Scale) would get OROP – that is, their pensions would always be linked to whatever revised Apex Scale the subsequent Pay Commissions decided. Since every single IAS (or IFS) officer retires in the Apex Scale this forever ensured OROP for themselves. To reduce any opposition to the stratagem, some Apex Scale posts were also made available to other All India services.”
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