Wednesday, June 25, 2014

OROP (A little belated) Update: Meeting of 12 Jun 14

Tuesday, 24 June 2014

Definition of OROP approved by RM – Same rank, same years of service, same amount of pension as drawn by officers & Other Ranks after 1.1.2006 and also future enhancements in pension; please note there isn’t any distinction between groups in Other Ranks

Working Group approved by RM - comprising representatives of the Service HQ (Army, Navy, Air Force Pay Cells) and ESM where appropriate as determined by Service HQ  


Ø              Entrusted to coordinate the discussions of the Working Group

Ø              Had asked the Service HQ to provide a Draft Government Letter (DGL) though it was the mandate of the CGDA to do so

Ø              Has estimated that taking pay in the pay band as on 31 Mar 2014 for paying OROP w.e.f. 01 Apr 2014, a sum of Rs 9100 crores would be the annual Cost to the Public Exchequer (CPE).

Back of the Envelope Calculations

Ø              Rs 9100 crore is possible only if: - 

§                 Even at Sepoy level, pension of 20 years would have to be paid though the Sepoy level personnel are discharged at 17, 15 and 15 years service from the Army, Navy, and Air Force respectively.

§                 That all officers retire with 30 years of qualifying service as indicated in PCDA (P) Circular 500 thereby inflating the estimated CPE   
§                 Not taking into consideration that ORs can opt to change from Gp Y to Gp X after 13 years of service and therefore weightage needs to be been given to this aspect

§                 Not considering that after AVSC, some officers (Majors to Brigadiers) will reach the top of the pay Band 4 (Rs 67000) and adding Grade Pay + MSP will draw more emoluments than an Army Cdr. Examples are available from amongst serving officers (Lt Cols to Brig).

·         Lt Col Rs 67000+GP 8000+ MSP 6000= Rs 81000

·          Col Rs 67000+GP 8700+MSP 6000 = Rs 81700

·            Brig Rs 67000+ GP 8900 + MSP 6000 = Rs 81900

·                 Pay of VCOAS/Army Cdr                   = Rs 80000 making a case for notional MSP for Maj Gens and above
Ø              Whether sums paid on the implementation of the following have been added to/subtracted from to arrive at a figure of Rs 9100 crores: -

§                 PCDA (P) Circular No. 453 - Revision of pension of pre-1.1.2006 Armed Forces Pensioners/Family Pensioners vide Annexure to MoD letter No. 17 (3)/2010-D (Pension/Policy) dated 15 Nov 2010

§                 PCDA(P) Circular No. 471 - Implementation of Govt decision on recommendations of the 6th CPC – Pension of PBOR discharged from service on or after 01 Jan 06

§                 PCDA (P) Circular No. 482 - Revised Pension Payments made due to OROP for certain categories of Other Ranks vide Appendix to MoD letter No. PC.10 (01)/2009-D(Pen/Pol)-Vol II dated 27 Mar 2012,

§                 PCDA (P) Circular No. 494 dated 19 Mar 2013– Enhanced Ordinary Family Pension of pre-2006 Armed Forces family pensioners vide MoD letter No. 2(1)/2012/D(Pen/Policy) dated 16 Jan 2013

§                  PCDA (P) Circular No. 500 Enhanced Minimum guaranteed Pension to pre-2006 Commissioned Officers/Family Pensioners vide Annexures A, B, C, D, E, F, G to MoD letter No. 1(11)/2012-D (Pension/Policy) dated 17 Jan 13,

§                 PCDA (P) Circular No. 502  - Enhancement of ordinary family pension in respect of pre-2006 LCOs/ORs Family Pensioners vide Appendix to MoD letter No. 1 (14)/2012/D (Pension/Policy) dated 17 Jan 2013,

§                 PCDA (P) Circular No. 503 dated 17 Jan 2013– Improvement in Casualty Pensionary Awards for Pre-2006 Armed Forces Officers, JCOs/ORs vide MoD letter No. 1(16)/2012/D (Pen/Policy) dated 17 Jan 2013 and

§                 Re-fixation of pay due consequent to Hon’ble Supreme Court order of 04 Sep 12 and Opinion of Ld Attorney General dated 03 Sep 13 in the Rank Pay case which will increase the pay due from 1996 to 2005, and arrears thereof

§                 Re-fixation of pay in the pay bands in the Sixth CPC consequent to payment of Rank Pay due to restoration of the deduction and arrears thereof

§                 Arrears due to Hon’ble Supreme Court dismissing the SLP (C) 23055 of 2013 and related cases, Review Petition (C) No. 2492 of 2013 and Curative Petition (C) No. 126 of 2014 in Hon’ble High Court of Delhi CWP No. 1535 of 2012 in PB CAT OA No. 655 of 2010 and tagged cases in Central Government SAG (S-29) Pensioners vs UoI for change of date of effect from 24 Sep 13 to 01 Jan 2006 for payment of pension and arrears.     

Conclusion: CGDA needs to take into confidence Service HQ to ensure speedy implementation of OROP as assured by this Government as recent as 23 Jun 14, as reported by NDTV 24x7.


  1. Sir, in a scenario full of unknowns, the critical inputs, presently missing, for a full understanding of which way these issues may be headed, are as follows:

    *The current status of the SOCs on Rank Pay.
    *The current status of the contempt petition on Rank Pay implementation.
    *The current status of the matter associated with dismissal of curative petition.
    *The actual status re DGL on OROP which was required to be furnished by services HQs as sought by CGDA.

    With the post election stabilisation being over, and the summer vacation in Hon'ble Supreme Court now drawing to a close, some news could be expected to trickle in from various agencies involved, for the benefit of the large no. of stakeholders.

    This update is a most welcome first step and a big relief in a prolonged famine of information.
    1. As per information available

      Rank Pay Corrigendum: - (awaiting authentication by reply to RTI application dated 10 Jun 14) in the Rank Pay case is that the file has been re-submitted soon after MoF/DoE/E.III.A reply dated 06 Jun 14 that MoD withdrew the file before any action by MoF;

      Contempt Petition: Impleadment of present Def Secy and CGDA filed on 18 Apr 14 and next date will probably be given when Apex Court reconvenes;

      SAG-29 (Pensioners) Vs UoI; PB CAT in Contempt Petition No. 158 of 2012 heard after the Apex Court dismissed Curative Petition (C) No. 126 of 2014, had given UoI three months to implement the order;

      OROP: DGL is to be prepared by CGDA and it appears that information projected in post above was what was told to Defence Minister who directed the Chairperson (the CGDA) of the Jt Working Group to convene a meeting and resolve the differences in the amounts as projected by Service HQ which is about 60% of the CGDA/PCDA (P) estimate; CGDA is yet to convene the meeting and hopefully it would be before the Chiefs meet the Defence Minister and later the Prime Minister, which would be taking place shortly.
    2. Reply
  2. Dear Sir,

    An extract of Rajya Sabha Petition Committee Report is appended below:

    "Deposition of Department of Expenditure (M/o Finance) (15th July & 1st August, 2011)
    7. The Secretary (Expenditure) submitted that the figure relating to defence
    personnel’s pension was being maintained in the Office of Controller General of Defence Accounts, which was under the administrative control of Ministry of Defence. He submitted that the figure, as available in the Office of Controller General of Defence Accounts, had been procured by the Ministry of Finance in accordance of which 1,300 crore approximately would be an immediate additional burden on Union Government in case ‘one rank one pension’ is given to ex-servicemen only prior to 01-01-2006. Mentioning break-up of 1,300 crores, he said that 1,065 crores would be given to the retirees belonging to the Posts Below Officer Rank (PBOR) and 235 Crores would be given to the retired Commissioned Officers. The said total figure would be increasing taking into account minimum 10% annual increase which would go to 1,430 crores in 2012-13, 1573 crores in 2013-14, 1,730 crores in 2014-15, 1,903 crores in 2015-16."

    While implementing Modified Parity of Pension wef 24/09/2012, there was a propaganda of expenditure of 2300 crores which also appeared to be wrong in view of the estimates of this report. The amount on modified parity of pension has been paid after submission of Rajya Sabha Petition Committee Report and as such that expenditure should be reduced from the estimates of the report.

    CGDA is certainly inflating the likely expenditure on account of OROP.
    1. It does not matter because the observation of PB CAT in OA No. 655 of 2010 in para 29 (d): -

      "..........but the said proposal was turned down by the officer of the Department of Expenditure on the ground of financial implications. Once the Central Government has accepted the principle of modified parity, the benefit cannot be denied on the ground of financial constraints and cannot be said to be a valid reason......"
    2. Reply
  3. Sir,
    The base date is now given as 1.1.2006 , is it not a disadvantage since we were expecting 31.3.3014 to be the date for calculation of pension?
    1. Better to wait and see.

      There have been many enhancements and modified parities after 1.1.2006 - references of which have been given in the post above.

      There is also the change that will have to be made after adding Rank Pay to the 5th CPC scales and then multilying that by 1.86 to get the 6th CPC pay band etc.

      Increases may also need to be factored in on favourable ruling by the Apex Court on minimum of pay for each rank and increase to the extent of the deducted rank pay at the top of the integrated pay scale.
    2. (Source-Aerial View blog)

No comments:

Post a Comment