In a desperate bid to woo the defence community comprising 14 lakh serving and over 25 lakh retired military personnel in the run-up to the Lok Sabha elections,the Centre pulled the long-demanded one-rank,one-pension rabbit out of its hat.
It will be implemented prospectively for armed forces from 2014-2015,finance minister P Chidambaram said on Monday,with the government transferring Rs 500 crore to the defence pension account.The defence community swells into a sizeable vote bank of close to two crore people if family members are taken into account.
This comes just after Congress vice-president Rahul Gandhi told a group of ex-servicemen last week that he fully backed their OROP demand,in what now seems to be a scripted interaction.The defence community,after all,swells into a sizeable and vocal vote bank of close to 20 million people if family members are also taken into account OROP basically implies payment of uniform pension to personnel retiring in the same rank with the same length of service irrespective of their date of retirement.
In a last-ditch gambit to woo the defence community of 14 lakh serving and over 25 lakh retired military personnel, the government has yanked the long-demanded, much-promised but never-implemented one-rank,one-pension (OROP) rabbit out of its hat in the run-up to general elections.
F M P Chidambaram said the OROP decision will be implemented prospectively for armed forces from 2014-15, with the government transferring Rs 500 crore to the defence pension account in the current fiscal to close the gap for all retirees (pre-2006 and post-2006 ) in all ranks. This comes just after Congress vicepresident Rahul Gandhi told a group of exservicemen last week that he fully backed their OROP demand,in what now seems to be a scripted interaction.The defence community,after all,swells into a sizeable and vocal vote bank of close to 20 million people if family members are also taken into account.
OROP basically implies payment of uniform pension to personnel retiring in the same rank with the same length of service irrespective of their date of retirement.Consequently,any further hike in pension rates is automatically passed on to past pensioners.
Irate ex-servicemen have been returning their medals and holding rallies over the past five years, which included one with BJP prime ministerial nominee Narendra Modi and former Army chief General V K Singh at Rewari last September, to protest against the non-implementation of OROP. On Monday, there was again scepticism about whether it was full OROP or just the eyewash of modified parity yet again. The UPA was in power for the past 10 years but this comes only now. Moreover, Rs 500 crore seems paltry. Earlier, the MoD and the CGDA had calculated Rs 1,730 crore for 2014-15. Another official figure was Rs 3,000 crore per year for OROP, said a senior military officer.
But MoD contended that the contours of OROP and its implementation will be worked out in the coming weeks.The Rs 500 crore is just a provisional figure to show the governments intent, said an offi cial.Chidambaram,too,said MoD had asked for Rs 500 crore but if more was required, it would be fully provided. The government, however, was mum on the legal and administrative reasons used in the past to junk the OROP proposal. Civilian pensioners, for instance, would demand the same with a heavy financial implication of Rs 8,000-9,000 crore per annum, it had held.
There will be no spurt in military modernization. It will continue to meander in its usual slow manner, with the defence outlay being marginally hiked to Rs 224,000 crore in the 2014-15 interim budget. The 10% hike over the previous outlay of Rs 203,672 crore basically just caters for inflation. In dollar terms,there has actually been a dip from $37.86 billion to $36.13 billion due to depreciation of the rupee. The worry among military experts is that Indias budgeted defence expenditure is merely 1.74% of the projected GDP for 2014-15, much less than the 3% being demanded for years to ensure modernization and requisite deterrence against both China and Pakistan. In fact, its even less than the 1.79% and 1.9% figures, respectively, of the last two fiscals.
Moreover, revenue expenditure(day-to-day costs &salaries) has gone up to Rs 134,412 cr. surpassing by far capital expenditure for new weapons,sensors and platforms at Rs 89,588 crore. A major chunk of the capital outlay will go to committed liabilities, not leaving much for new projects despite the armed forces being desperate for submarines and howitzers, air defence weapons and helicopters. The major project is the $20 billion medium multi-role combat aircraft deal for 126 fighters, with final commercial negotiations under way for French Rafale jets. This alone will see an outgo of over Rs 10,000 crore as the first instalment after the contract is inked. Some other important deals close to finalization include the acquisition of 22 Apache attack helicopters (around $1.4 billion), 15 Chinook heavy-lift helicopters (around $1 billion), and 145 M-777 ultra-light howitzers ($885 million), all from the US.
10% outlay hike will only cover inflation