Published as an Issue Brief by the Observer Research Foundation (ORF)
http://www.orfonline.org/research/one-rank-one-pension-its-impact-on-the-defence-budget/
http://www.orfonline.org/research/one-rank-one-pension-its-impact-on-the-defence-budget/
The One Rank One Pension (OROP) scheme will pay a uniform pension to armed forces personnel, who retire with the same rank after the same length of service, regardless of their date of retirement. It has quickly become one of the most politicised of all military issues in the country today, which may be called odd, given that the political class rarely takes interest in matters related to the military. Indeed, the debate over OROP, ostensibly an employee-benefit programme, has become a leitmotif of all that is wrong with the nation's treatment of the military. Lost in the political din, however, is the key question of affordability. Not being discussed either are questions on long-pending structural reforms in the military, on issues like officer shortages and the need for modernisation. This paper examines the potential impact of OROP on the nation's coffers.
Dear Mr Mukherjee,
ReplyDeleteI read your paper with interest but believe there are factual errors which have led to erroneous conclusions being reached.
Firstly OROP has really never been about the money, but the fact that the forces have been deliberately downgraded by the Civil Services lobby thereby destroying their attractiveness as a career.
That apart the over all defence pension that you have worked on includes pension to civilians paid out of defence estimates. While service veterans and next of kin account for around 30 Lakh pensioners, while civilians paid from defence budget account for only 4Lakh. Yet the Pension Bill the Service pensioner for last FY was Rs 33000 Cr while that for the civilian pensioner was Rs 21,500 Cr.In per capita terms the civil pensioner gets five to six times more than the defence pensioner. This actually at the crux of the issue as he serves with full pay till 60 yrs and then gets a huge pension while to keep the forces young you throw him out between 35-45 and pay him a pittance as pension. In any case your calculations should not be at Rs54,500 Cr but at Rs33000 Cr.
I agree that DB concept costs the Government hugely, but if you do away with it for soldiers how exactly do you compensate him if he dies within a couple of years in service? I think any change in this will destroy any likelihood of soldiers willing to die for their country.
Finally I agree that there is a need to "rightsize" the forces but would;nt it be better to start with axing the civilian establishments that form a part of MOD and are paid by it. Their sanctioned strength is 585,000, which incidentally is larger than the Pakistani Army's active component.The MOD spends Rs1000 Cr annually on pay and allowances of personnel deputed to it from the Finance Ministry. The DRDO uses 61% of its budget for meeting establishment costs and the Military Engineering Services oversee projects worth Rs4800 Cr but spend Rs7200 Cr on their establishment.
Brigadier
ReplyDeletethanks for the comments,apologies for the delayed response.
the paper was about costs of pensions,not rank parity with civil services. BTW,Indian service chiefs/commanders enjoy superior orders of precedence compared to US.
the point on civilian employees in MoD is moot,globally defence budgets include both military and defence civilian costs. we need righsizong,which should extend to MoD civilian employees too!
Last, death/disability in action should be covered with generous ex gratia from the government,again isn't a point linked to the large majority of pensions.
the real issue with services is about attracting better quality officers and funding modernisation. OROP doesn't address either