Finance, defence ministries get to work on military pensions overhaul | india | Hindustan Times
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Finance, defence ministries get to work on military pensions overhaul

With Prime Minister Narendra Modi committed to the one-rank one-pension (OROP) scheme for the armed forces, the finance and defence ministries are working towards hammering out a consensus formula on the proposed retirement benefits.

india Updated: Jun 16, 2015 09:00 IST
Army-veterans-begin-relay-hunger-strike-to-demand-implementation-of-the-OROP-scheme-in-Delhi-s-Jantar-Mantar-on-Monday-Sonu-Mehta-HT-Photo-
Army-veterans-begin-relay-hunger-strike-to-demand-implementation-of-the-OROP-scheme-in-Delhi-s-Jantar-Mantar-on-Monday-Sonu-Mehta-HT-Photo-

With Prime Minister Narendra Modi committed to the one-rank one-pension (OROP) scheme for the armed forces, the finance and defence ministries are working towards hammering out a consensus formula on the proposed retirement benefits. The finance ministry, sources said, has pointed out that a way needs to be found out to fund the payouts, which are likely to increase every year given the definition of OROP.

The finance ministry was inclined to refer the matter to the Seventh Pay Commission headed by Justice Ashok Kumar Mathur to recommend the most appropriate method and roadmap for implementing OROP, sources said.

The ministry of defence (MoD), on the other hand, has communicated to the finance ministry that it wants an early implementation of OROP as it is committed to the interest of jawans who stand to benefit the most from the revised pensions, sources said. “The jawans’ interest is foremost for the MoD for which is why it is pressing for OROP’s implementation at the earliest. The officers are entitled to far higher perks and other benefits than jawans, who deserve OROP the most,” said a source on condition of anonymity.

OROP implementation will cost an estimated Rs 8,299 crore, of which pension arrears and payments for retired jawans and those of persons below officer rank (PBOR) would be about Rs 7,100 crore, sources said. The Prime Minister’s Office (PMO) is also of the view that defence personnel, particularly jawans and PBOR, deserve better retirement benefits.

Sources said that the Prime Minister’s Office (PMO) has taken favourably to an option of doubling the government’s contribution to pension of soldiers as a formula for making OROP work.

The Bharatiya Janata Party (BJP) is also pressing for a roll-out of OROP keeping in mind the jawans’ interest. Last month, Modi, in his monthly radio talk show, Mann Ki Baat, said: “We are committed to OROP”. In February, the Supreme Court had directed the Centre to implement its six-year-old verdict to follow the OROP principle for retired armed forces personnel. OROP will ensure a uniform pension for defence personnel retiring in the same rank with the same length of service, irrespective of their date of retirement. It has been a long-standing demand of over two million ex-servicemen in the country.

Under the current rules, retirement benefits and pensions are calculated according to last draw salary. Thus, a recently retired Colonel, for instance, receives more pension than an officer of similar rank who retired earlier. Besides, the regulation dearness allowances and other hikes, salaries have also gone up because of hikes handed out by successive pay commissions. Moreover, in many cases even similar ranking defence personnel retiring simultaneously do not draw identical salaries. This is because one soldier would have got promoted to a particular rank, say Colonel, much earlier than his colleague, making his last drawn salary greater.