Tuesday, September 1, 2015
Arun Jaitley is also right on OROP, but issue needs a compromise solution - By R Jagannathan
With every passing day, the issue of OROP - one rank, one pension for retired armed forces personnel - is likely to become more unsolvable. When so many of them are sitting on strike at Jantar Mantar and getting increasingly emotional about it, it is simply not possible for government to wave an account book in front of them and expect a reasonable compromise. Emotions cannot be tackled by an accountant's rationality beyond a point.
That this issue has been ruined by politicians promising OROP when they are not in power or as an election sop when they are about to lose power is obvious. Narendra Modi promised it before the 2014 elections, and so did the UPA before bowing out. Two finance ministers, P Chidambaram and Arun Jaitley, also promised OROP in vague terms in their budgets.
However, the real issue is emotional for ex-servicemen. They love their ranks, and two people who retired with similar ranks do not like being treated differently. They are also emotional because politicians made open-ended promises to honour their wishes without calculating the costs. They thus feel cheated repeatedly. The ordinary citizen will also back them out of emotion - for no Indian is ungrateful to men in the army who put their lives on the line to defend the country.
But just as emotions need to be handled well, rationality cannot be abandoned altogether. Arun Jaitley surely has a point when he says that "We cannot have an OROP where pensions are revised every month or year...can everyone come and start asking for annual revision of pension? You cannot create a liability which future generations have to pay."
Extremely well said. Nobody can disagree with this point, and as finance minister and guardian of public finances Jaitley cannot compromise national interests just to get over a political pressure point.
However, the point is this: if the OROP demanded by ex-servicemen is going to damage national finances significantly or irretrievably, why aren't these figures shared with the aggrieved parties and also put out in the public domain? Honesty and transparency is the only way to deal with an issue that has become emotive for millions of ex-servicemen and war widows.
This only proves that while politicians are good in stoking emotional responses from voters to get themselves elected, they are very poor at dealing with those same emotions once they catch fire. You can't make emotional pitches one day and then wave rationality and account books in their faces the next.
Is there a way out for the Modi government out of this self-created mess?
Yes, but it needs expert handling and a sensitivity that has not been on display so far.
First, the government must put out its own calculations of costs based on its numbers using two or three basic methods of calculating OROP, including the need for periodic adjustments. These figures should be discussed with ex-servicemen's representatives and even put out in the public domain. Putting things out in public has two advantages: the public becomes aware of the numbers involved, and this automatically serves as a restraint on the agitators from pushing their case too far. If it seems like they are demanding the moon, they will lose public sympathy very soon. Two, it also serves to underline that the government is being reasonable. Claiming OROP as too costly without mentioning the actual costs make the government's claims incredible. No one will believe it. It is time to shed excessive secrecy in such matters.
Second, to ensure that OROP does not become a permanent entitlement for all people now joining the armed forces, the government should make it clear how it will handle pension and OROP issues for future employees. The logic has to be this: we have to move away from defined payments and open-ended pension entitlements to defined contributions that can be periodically topped up by specified amounts of government payouts. This will protect taxpayers from being fleeced in the name of benefiting the armed forces even while giving them better pensions than before.
Third, an emotional issue has to be handled with emotional maturity even on the part of government. The Prime Minister needs to step in once the basic issues are settled to reasonable satisfaction. Men in uniform implicitly trust the BJP more than the other parties, and Modi himself has high credibility with them - though the OROP issue has dented this somewhat. If he re-enters the picture to seal a reasonable deal, he can pull it off. Maybe a well-publicised visit to Jantar Mantar is called for.
Fourth, emotional appeals are best countered with counter-appeals for higher motivations. If the basic creed of the army is sacrifice above self, it is foolish to believe that ex-servicemen will not respond to a call to accept less than what they are demanding in the national interest, where poor people also have to be fed from the same pot of national revenues. Sacrifices made to feed the country's poor are not less important than sacrifices made on our borders. Most armymen come from the same class as needs food and other forms of subsidy.
OROP has to be implemented with compromises quickly. Otherwise it will leave a huge gash across the hearts of the armed forces and the country they seek to serve.