OROP: Govt in a dilemma

There is another fear lurking for the government in the form of civilian protests seeking a similar facility. The government has already announced a contributory pension scheme for the civilians. If the civilian employees want to switch over to the old system again, it would be a problem that no government could handle every year without affecting the economy drastically. That is, fiscal prudence prohibits the same

When scores of Army men sat on a hunger strike at Jantar Mantar here a few days ago, it was an unfamiliar site. These were all men guarding our borders till the other day. They were ready to lay down their lives in the line of duty. But they were forced to gather at the site to protest non-implementation of a long pending promise.

But, the party and the leader who promised implementation of the OROP (One Rank One Pension) before coming to power, are caught in the throes of dilemma. "One Rank One Pension aims at dispensing the same amount of pension for each rank, with similar length of service, and with the benefits of future enhancements passed on to past retirees of the Indian Army" is how the ruling parties explained in the past to lure this vote bank.

Put simply, OROP means that every soldier who retires in the same rank gets the same pension, irrespective of his date of retirement. As of now, soldiers who retired more recently receive more pension than those who did earlier, because pensions are dependent on the last salary drawn — and successive pay commissions have hiked salaries.

The Manmohan Singh government in its second tenure calculated that OROP would benefit more than 20 lakh ex-servicemen, and about six lakh war widows. The UPA II agreed on OROP in the last months of its tenure, hoping to garner the support of the retired defense personnel. It also made a provision of Rs 500 crore in the interim budget.

During his election campaign, Modi criticised Manmohan Singh’s government, for being “fraudulent,” and claimed that only his government could implement the One Rank One Pension scheme. He campaigned on behalf of the retired Service personnel seeking a realistic allocation to meet the real requirement and not an eye-wash statement.

This had raised the hopes of Army men in the country as they saw in Narendra Modi a real champion of not only their cause but also that of the armed forces as Modi was speaking sense clubbing several issues dogging the forces and the men including giving a fitting reply to Pakistan if it crossed its limits in future. This led the ex-servicemen to believe that 'Achche Din" for them and their families were just round the corner.

But the government has been indecisive on the issue for the past several months. The dilly-dallying on part of the government without any explanations has given room to a suspicion that it is no different from the Congress governments. That both the governments had not really given a thought before promising One Rank One Pension is obvious in the calculations that are on now in deciding the monetary burden, present as well of the future.

The jawans constitute the bulk of the Army, and mostly retire by the age of 35. This means that they often draw pension for more number of years than they earn their salaries for, it is being argued. As pay commissions are mostly set up with a gap of more than 10 years between them, most jawans get the benefits of just one pay commission’s recommendation of salary hikes during their careers.

Compare this to the civilians who enjoy at least three pay commission benefits during their 60 years of service with the Centre. The ball is now in the Finance Ministry's court, the Government says, in spite of the confusion over whether the OROP benefit is to be extended to other Central forces like the CSIF or not. The problem, no doubt, is complicated, all said and done.

In the past, Parliamentary Standing Committee on Defence and Rajya Sabha Committee on petitions recommended holistic implementation of OROP and in his first full budget last July, Finance Minister Arun Jaitley, reiterated his government's commitment to the same by allotting Rs 1,000 crore towards it. However, it had remained on paper.

After taking over as the Defence Minister, Manohar Parrikar spoke of 80 per cent satisfaction levels for pensioners with his model of OROP, which was also widely reported. Sources admit that the debate over what constitutes OROP – and the formula to fix the OROP pension – has exercised the Defence services and the Defence Ministry.

Even soldiers who retire in the same rank do not usually draw the same last salary. This is because one Brigadier could spend more time in the rank of Brigadier while another Brigadier may take longer to get promoted, thus getting less pay as Brigadier — or one could reach retirement age earlier than the other, the Ministry officials argue.

The formula prepared by the Defence Ministry, with the concurrence of the three Defence services, overcame the problem of variations in rank and last pay drawn by creating standardized slabs for each rank with a certain length of service, they added. This proposal was sent to the finance ministry for approval, they point out.

In one of the interviews given in this regard, Prime Minister Narendra Modi said “there are too many definitions going around yet, and we are looking for one on which all stakeholders agree.” The burden for the government is bound to increase every year and with every successive pay commission – a constant escalation of the implicit pension debt on the government.

Sources further explained that as military personnel retire at a younger age compared to their civilian counterparts, Defence pensions are paid for a much longer period. This fear of an increasingly unsustainable Defence pensions bill – which is already at Rs 54,500 crore this year without OROP – is perhaps holding back the government now, it is being feared by the veterans. "This is not something new.

You people have reported the same without much variation in the past. There is nothing new to be added", the officials shrug it off. There is another fear lurking for the government in the form of civilian protests seeking a similar facility. The government has already announced a contributory pension scheme for the civilians.

If the civilian employees want to switch over to the old system again, it would be a problem that no government could handle every year without affecting the economy drastically. That is, fiscal prudence prohibits the same. Then there are other security forces rendering similar services to the nation as the Defence personnel in the troubled areas.

There is no guarantee that these forces too would keep quiet not seeking benefits on a par with the Defence service personnel as they are facing equal tasks and risks. The latest statement of Parikkar gives some hope to the soldiers as he said the matter is now pending with the Finance Ministry and his Ministry won’t create any hurdles at all. "Our job is over. We did what we are supposed to do and it is going to be good news to one and all,” was what he said to the soldiers on July 9 in Lucknow.

Will Modi government usher in Achche Din for the veterans soon?

The Opposition has far too many - more political weapons rather – to deal with the government this monsoon session, anyway. OROP may not sound that attractive to it now in the backdrop of VYAPAM and Lalit Modi's issue vis-a-vis Union Ministers etc. Still it is an issue ready to be flagged.