Wednesday, March 19, 2014

OROP, if done properly, may console veterans


Addressing members of Parliament while presenting the Interim Budget on 17 March 2014, finance minister P. Chidambaram announced that the government had “decided to walk the last mile and close the gap for all retirees in all ranks” and “accepted the principle of One Rank One Pension (OROP) for the defence forces… It is an emotive issue, it has legal implications, and it has to be handled with great sensitivity. Changes in the pension rules applicable to the defence services were notified on three occasions in 2006, 2010 and 2013. As a result, the gap between pre-2006 retirees and post-2006 retirees has been closed in four ranks (subject to some anomalies that are being addressed): Havildar, Naib Subedar, Subedar and Subedar Major. There is still a small gap in the ranks of Sepoy and Naik and a gap in the ranks of Major and above. We need a young fighting force, we need young jawans, and we need young officers. We also need to take care of those who served in the defence forces only for a limited number of years. This decision will be implemented prospectively from the financial year 2014-15. The requirement for 2014-15 is estimated at `500 crore and, as an earnest of the UPA government’s commitment, I propose to transfer a sum of `500 crore to the Defence Pension Account in the current financial year itself”.

While the timing of this announcement is too obvious, it needs to be recalled just how emotive the issue is. About 22,000 gallantry and distinguished service medals of defence veterans were deposited with the President of India and Supreme Commander of the Armed Forces between 2009 to 2012 on six different occasions following umpteen representations of the genuine demands ignored by the government with impunity. While the 22,000 medals were accepted by the President’s staff at Rashtrapati Bhavan, when nothing happened for long, the veterans decided to hand over another 10,000 medals only to the President in person. When the President did not accept them, the delegation of defence veterans and widows brought them back to deposit them in the office of Indian Ex-Servicemens’ Movement (IESM).

 In February 2006 the government revised the concept of “modified parity” for junior commissioned officers (JCOs) and other ranks (ORs-sepoy to havildar) granting pension at the top of 5th Central Pay Commission (CPC) scale of the rank in which they retired (as on 01 January 1996). With the implementation of these orders, the concept of OROP for officers the modified parity in pension was computed at the bottom of the scale and threw up anomalies such as Maj. Gen. Drawing less pension than a Brigadier. By recommending continuation of the existing provisions and altering pay and pension structure, the 6th CPC upset the equilibrium between past and current retirees.

 The 6th CPC recommended the same fitment principle both for pay and pension, but applied the principle differently, in that:

 (a) The difference in pensions between pre and post 01 January 2006 and retirees widens with increase in length of service, thus nullifying the parity effect from 01 January 2006.

 (b) The division of pensioners into various groups on the basis of date of retirement does not stand judicial scrutiny and has been found to violate Article 14 of the Constitution by the Supreme Court.

 On December 19, 2011, not convinced with the government’s denial of OROP due to administrative, legal and financial reasons, the Rajya Sabha Committee on Petitions, in its tabled report strongly recommended that OROP be granted. The committee observed that while the Department of Ex-Servicemen Welfare (DESW) of ministry of defence quoted a figure of `3000 crores additional per year, the department of expenditure pegged the annual expense for the first year at `1300 crores. Out of this `1,065 crores would go for JCOs and other ranks retirees and `235 crores for the commissioned officers. The committee felt that `1300 crores is not a very big amount for a country of our size and economy, particularly in view of the objective for which it would be spent. On the administrative angle, the committee felt that since all the existing pensioners/family pensioners are still drawing their pension/family pension, revision of their pension would not pose any administrative hurdle. On the legal aspect, the committee was not convinced by the argument put forth against the implementation of OROP because the pension/family pension is based upon the service rendered by personnel while in service and comparison of services rendered during two sets of period does not seem to be of much relevance.

 Pension of the past retirees should be determined with reference to notional top-of-the-scale and this pension should be subjected to pro-rata reduction for qualifying service less than 33 years. The pensioner should be given an option to choose between notional top-of-the-scale or 50 per cent of reckonable emoluments. The final letter must also update pensions for all ranks from soldier/sailor/airman to chief up to March 31, 2014 and cater for an annual increment of 3 per cent.

 While Mr Chidambaram has verbally assured whatever the veterans have been agitating for and what they rightly deserve, with 20,24,000 beneficiaries involved and only `500 crores sanctioned so far against the required `1300 crores, it remains to be seen how and by when OROP will be disbursed. If implemented in letter and spirit, veterans and widows concerned will gratefully accept back the 32,000 medals deposited to express deep anguish.

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