OROP – A Noble Government Initiative mired in Bureaucratic Slime
A Solution soaked in Mischief and Exaggerated Figures
Karan Kharb
(An edited version of this article is also published in Organiser, New Delhi Sep 20, 2015)
The announcement of the government decision by Defence Minister Manohar Parrikar on September 5 to implement the long outstanding one rank one pension (OROP) demand of the Ex-servicemen (ESM) has evoked a mixed response from the ESM – a term that includes all pensioners, war widows, war wounded and disabled veterans of the Army, Navy and Air Force. Whereas the ESM community in the country is largely happy and thankful to the Prime Minister for fulfilling his oft repeated commitment to implement the concept of OROP, they are feeling insidiously cheated by the bureaucrats who have deftly twisted the political intentions and decisions. Military pensioners eloquently acknowledge the sincerity of the Modi Sarkar in addressing the issue of OROP that has festered for over 42 years. The cordiality with which they have been able to interact with the Defence Minister and senior officials at the PMO has underscored their faith and pride in the political leadership that had become almost extinct during the long spell of Congress-UPA regimes. Never before has there been a Government so favourably disposed towards safeguarding the genuine interests of Military personnel, veterans and matters of national security.
Lt Gen Balbir Singh (retd), President, ‘Utkarsh – The Turning Point’ presenting cheques to widows of martyrs.
The government resolve to implement OROP in letter and spirit has, however, been muddled in its details – and that is what has angered the ESM who smell a rat in the fine print of the government press release issued ironically by the Defence Minister himself on September 5. An analysis of the OROP press release does reveal that the written word subtly deviates from the candour and sincerity displayed by the Prime Minister and the Defence Minister. Some of the major flaws irking the ESM discussed below do point to some crafty brains at work in the backrooms of ministers which also highlights the widening gulf in civil-military relationship. Arresting this drift and restoring a mutually trustworthy, cohesive working environment in the Ministry of Defence (MoD) is itself a significant issue harming military morale and preparedness which, if allowed to persist, can seriously endanger our national security.
Flaws in the Solution
The ‘VRS’ Mischief: The last minute insertion of voluntary retirement scheme’ (VRS) has angered the ESM community most. This issue had never figured during discussions between the ESM leaders and the Government which were frequent and spanned over three months. In the already trust-deficit civil-military relationship, the sudden mention of VRS is ridiculous, firstly, because there is no such thing as ‘VRS’ in military service and secondly, because wherever applicable in Civil Services, it is a one-time package settlement given to the employee concerned – a ‘scheme’ which is alien to military personnel. Civilian employees seeking VRS voluntarily opt for ‘no pension’ because the ‘scheme’ itself compensates them so adequately that they voluntarily forego their pension and opt for this scheme. Military personnel, on the other hand, do seek ‘pre-mature retirement (PMR) but that is only after the concerned Officer/JCO/OR has earned ‘pensionable service’. Such cases are already appropriately covered within the accepted definition of OROP which stipulates ‘length of service’ as a criterion to determine pension. Military pensioners going on PMR would have already lost a portion of their pension entitlement because of having sought pension earlier than their batch-mates/equivalents superannuating after serving longer and, therefore, becoming entitled to more pension. Denying OROP benefits to VRS/PMR categories is, therefore, utterly illogical and arbitrary which shall continue to embarrass the government unless deleted from the OROP dialogue as a bad joke. Legal experts also opine that it will not stand scrutiny of law if the affected ESM chose to challenge it in the court.
The 5-year Equalisation Plan: This government decision to ‘equalise military pensions once in five years’ defeats the very concept of OROP. In the modern era of automated computing in banks and offices, there should be no problems in devising an appropriate software and applying the formulae to equalize pensions every year or even earlier without hassles. Rather than achieving ‘equality’, this exercise would be perpetuating the ‘inequality’ for five years which is genuinely resented by the ESM. Hopefully, the One-man Committee ordered by the government shall resolve this tangle in the spirit of the OROP definition – “same pension for same rank, same length of service irrespective of date of retirement.”
‘Average of Maximum and Minimum’: Lt Gen Balbir Singh (retd), President, Indian Ex-Services League who represented the United Front of Ex-servicemen (UFESM) along with Maj Gen Satbir Singh (retd), in negotiating the OROP settlement with the Government, says, “Year 2013-14 was accepted by us as the Base Year for the initial equalisation with the understanding that the top of the pension scales as they existed on 31 Mar 2014 would be applied. But the government press release now says that the Base Year would be ‘calendar year 2013’ and the ‘equalisation’ would be based on the ‘average of maximum and minimum’ of that year. This is not acceptable”, Lt Gen Balbir Singh (retd) said, “because rather than equalising, its application would trigger even more disparities between the existing pensioners and the subsequent pensioners in the same year. Only top of the scale can be an equaliser.”
The Fallacy of ‘Unbearable’ Financial Burden
Baseless stories have been hyped expressing fears of the mounting pension budget going beyond affordability limits of the government if OROP as promised by the Prime Minister is implemented. Initial pay-out of OROP including arrears earlier assumed to take effect from April 1, 2014 stood at Rs 8,294 crore. Yet, arbitrary figures ranging from Rs 10,000 crore to 22,000 crore have been irresponsibly but quite frequently have been allowed to float in the media. It is therefore necessary to clear public confusion by explaining the existing defence pension budget and the OROP effect on it which is explained hereunder:-
Total ‘Defence Pensions’ Budget (2014-15) = Rs 54500 cr
Share of Defence Civilians (37%) = Rs 20165 cr
Share of Armed Forces Pensioners (63%) = Rs 34335 cr
Subtract one time pay-outs (Gratuity/Leave encashment etc) = Rs 15000 cr
Net Pension load = Rs 19335 cr
Total OROP (Initial outgo incl arrears) = Rs 8300 cr
Enhanced OROP share for the next year (0.85%) = Rs 183 cr
For every successive year the enhanced OROP share will decline until it becomes zero in the fifth year. It might appear strange to those who have heard that every year thousands of military pensioners are added to the existing 2.6 million and, therefore, so much more pension burden is added to the annual pension budget. No doubt, the overall pension budget shall increase but it will be grossly wrong to attribute the existing ratio of annual increase to the OROP effect which shall be reducing every year becoming nearly zero in the fifth year after OROP implementation.
The 6th Pay Commission had resorted to ‘bunching’ the service seniority of military personnel in different trades for the purpose of fixing their pay scales in respective pay band. As a result, these personnel are now retiring drawing pension at the ‘bunched’ scale despite the number of their years in service being different. These bunched categories are now in their last leg of service and would taper off in another 4-5 years. Thanks to this ‘bunching effect’, the enhanced proportion of OROP will diminish rather than escalate every year.
Civil-military relationship has been a cause of concern for long now. The widening trust deficit must be checked and concerted efforts are most urgently required to be made to restore and build up a healthy trustworthy working environment in the MoD by integrating and inducting military expertise in the Babodom of the ministry. Such a reorientation needed resolute, dynamic leadership which is now available in Prime Minister Narendra Modi who is heading a strong government at the centre after a long time.
Long ago, Chanakya had advised Chandragupta Maurya, “while the citizenry of the State contributes to see that the State prospers and flourishes, the soldier guarantees it continues to EXIST as a State1 To this man, O Rajadhiraja, you owe a debt: plese, therefore, see to it, on your own, that the soldier continuously gets his dues in every form and respect, be they his needs or his wants for he is not likely to ask for them himself.” Then Kautilya, known also as Chanakya gave his king this blunt warning: “The day the soldier has to demand his dues will be a sad day for Magadha for then, on that day, you will have lost all moral sanction to be king.”
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