Tuesday, September 15, 2015

Orop war ends, fund battle begins Breakthrough achieved but veterans complain that the government is yet to clear stand on key demands

Ex-armymen celebrate the government's decision to revise the pension scheme
A nudge from the RSS and BJP on September 2 goaded the government to finally push through the One Rank, One Pension (OROP) scheme. Senior RSS leaders Bhaiyyaji Joshi, Krishna Gopal and Dattatreya Hosabale, who were attending the three-day coordination meeting with their affiliate organisations in Delhi, urged Finance Minister Arun Jaitley to clear the OROP proposal. BJP President Amit Shah was also present at the scene. The RSS was worried about the fallout of the ongoing 80-day protest by the veterans at the Jantar Mantar in Delhi while Shah was more focused on the impact it can have on the forthcoming Bihar elections and the fact that the Congress and the Aam Aadmi Party could hijack the ex-servicemen's agitation.
Jaitley returned to his office in North Block later that evening, signed off on the OROP file before flying off to Turkey the next day to participate in the conference of G20 finance ministers. On September 5, just three days later, Defence Minister Manohar Parrikarannounced the single biggest relief measure by any government for retired military personnel. It resolved an issue that has bedevilled ex-servicemen for decades and allowed the government to cock a snook at the Congress-led UPA which in 2014 cleared OROP but allotted just a meagre Rs 500 crore for it. Over the next few months, the government will pay out an estimated Rs 16,000 crore in pension adjustments and arrears to nearly 2.2 million ex-servicemen and 600,000 widows. It will spend Rs 8,000-Rs 10,000 crore each year to ensure that ex-servicemen retiring at the same rank and length of service are paid the same pension.
The finance ministry's latest estimates show that OROP may cost the exchequer Rs 16,000 crore or 0.1% of GDP for the financial year 2016. Bureaucrats say they are scrambling to raise the finances, dipping into other revenue sources such as the Swachh Bharat cess.
Even a month back, an OROP rollout seemed impossible despite it being a BJP electoral promise and repeated assurances by PM Narendra Modi. The bureaucracy opposed it citing fiscal, legal and administrative hurdles. The veterans saw a glimmer of hope in Parrikar who took over as defence minister in November last year. In February this year, he personally worked out a Rs 8,293-crore figure which the government would need to pay out for OROP. "Parrikar went into the level of detailing that no defence minister before him has done," says Rajya Sabha MP Rajeev Chandrasekhar, who has raised the OROP issue in the Parliament for nine years. In March, the defence ministry sent the OROP file to the finance ministry for clearance.
This is where Parrikar's persistence hit a stone wall. Jaitley stood by finance ministry bureaucrats who firmly opposed the payout. Even earlier in June 2014, Jaitley-who then also held the defence portfolio-had asked the veterans to "lower their expectations" when he met them in his North Block office. The government would treat 2011 as the base year for pensions, he said, not the 2013-2014 pension scales as demanded by the veterans. The finance ministry's impasse with the defence ministry, which lasted between March and July this year, spurred shrill street protests by veterans at Jantar Mantar.
There was no greater irony than veterans, some heroes of the 1965 India-Pakistan War, boycotting the government's 50th anniversary celebrations of the conflict.
In early August, the PM's Principal Secretary Nripendra Misra called for the OROP file when the veterans' protests had begun to embarrass the government. Anurag Jain, joint secretary in the PMO, began consulting with the veterans. Chandrasekhar and former army chief General Ved Prakash Malik were called in as intermediaries on August 10. The talks failed because both sides were intransigent: the government on 2011 as the base year; the veterans on OROP to be followed exactly as defined by the Bhagat Singh Koshyari committee in the Rajya Sabha in 2011.
Even an intervention by Army chief General Dalbir Singh on August 27 failed to convince the veterans to budge. The PMO's proposal significantly diluted Parrikar's Rs 8,293-crore OROP figure.
Officials familiar with the negotiations say there was a fundamental shift in the government's attitude after Modi's OROP commitment on August 15, even though he didn't talk about it in his Independence Day speech. "The government swiftly moved the base year from when pensions would be considered from 2011 to 2013," says an official. The government had its new calculations ready on August 30, nearly a week before Parrikar's breakthrough announcement.
Veterans now say the government is yet to clarify on two riders introduced in Parrikar's statement-that pensions will be denied to premature retirees and that pensions will be revised only once every five years and not every year. "If you accept OROP, then you have to accept its definition," says Group Captain V.K. Gandhi, general secretary of the Indian Ex Servicemen's Movement (IESM).
Veterans feel the continued protests will hasten the government's slowgrind process of issuing an order that will actually transfer money into their bank accounts. "We are aware how the bureaucracy thinks-if you cannot deny, then delay," says Major General Surjit Singh (retired), a member of the fourth and fifth Pay Commission cell.
Military watchers point at how the bitter standoff has ruptured the already frayed bonds between the government, bureaucracy and ex- servicemen. An ugly precedence has now been established.

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