The talk of the town this last month was “ no, not the insurgency on our borders or the constant numerous ceasefire violations, not the Lokpal or the GST logjam, and not even the Yuan crisis “ it was the “One Rank One Pension” to be or not to be that was supposedly the question!
The scheme which now has come to be popularly known as OROP presents a picture which is so typical of the way we first commit, then plan and then extend.
I do not at all mean to question the rationale when we speak with regard to our jawans, seamen or an aircraftmen guarding our borders or our seas and skies and who retire at 44 drawing a basic salary of Rs 20,000.
The OROP which was in fact prevalent till 1973 was actually discontinued after the implementation of the 3rd pay commission much to the disquiet within the armed forces.
The Joint Parliamentary Committee instituted to go into the subject of restoration of the OROP clearly agreed on its restoration back in December 2011.
It is of course not known how the monetary impacts were estimated first at Rs 500 crore then at Rs 3000 crore four years back and now at Rs 9000 crore (that too tentatively) per year.
What is even a bigger mystery is that both the previous UPA government and the current NDA government went on committing the OROP without apparently knowing precisely what the number of claimants would be and the precise amount of money that would be required for the purpose which the ordinary tax payer would have to shell out.
The BJP manifesto proclaimed it would implement the OROP if voted to power and the union budget magnanimously provided for Rs 1000 crore for the purpose. However, it now transpires that all these promises were made without any idea of the financial impact.
Defence is the third largest head of our expenditures. We spend around Rs 12 lakh crore on the total non plan expenditures “ of which defence accounts for around 2.5 lakh crore of which around 1 lakh crore goes towards salaries of the 20 lakh strong armed forces and another Rs 55,000 crore towards pensions. I estimate that 1,000 crore only of this is for OROP whereas “tentative” bill is for 9,000 crore.
Then there is a question of payment of arrears “ it is not known exactly how much arrears are going to be paid and in what mode “ from April 2014 or April 1973 or even before?
Viewed in these perspectives it is of course a big amount particularly when the 7th Pay Commission takes effect in January 2016 and the sum goes up further by say another 1000 crore year after year plus the normal inflation neutralizations of say another 7 per cent year on year.
On the flip side however thanks to our speed of implementation of projects for the last two years I have seen that we have been consistently surrendering 10 to 13 per cent of defence allocations since we could not spend the funds.
On the tenability of the scheme itself, our sepoys generally retire between 42 and 48 and even if they are reemployed on their own initiatives they would generally find at best a Group 4 type job that too with a labour contractor without minimum facilities. This can certainly not be what they deserve after guarding our borders and our citizens for 25 years.
But what then happens to the ranks of say the colonel and above who retire between 54 and 62? Here that argument of early superannuation would not hold good. Perhaps a little tweaking of the retirement age could end the disparity with other cadres and in today's circumstances it would be rather presumptuous in my view to conclude that a person in those ranks would not be fit anymore in those six years. There is a good scope for a reform in superannuation ages here.
Transparency would demand the data on the gradewise breakups of the 9,000 crore.
Also we have been now and then speaking of resettlement and lateral movements of retiring defence personnel “ retraining, etc “ but there has been very little done in this area. But what is more perplexing is the way the government seems to be going on about dealing rather unceremoniously with these war veterans. They have been on hunger strikes for more than two months repeatedly wanting a date from the Prime Minister “ a date for implementation and sorrowfully all that comes from the Red Fort are promises without timelines. Certainly our war veterans deserve more empathy and respect than that.
Perhaps a clear explanation from the Prime Minister on the magnitude and complexity of the issue, the implications on the tax payer year after year, the impacts on near similar positions in the paramilitary or say even other government jobs calling for immense amount of hardships say at the railways, the fire services, the police forces, etc could be shared. In these cases although arguably the service periods are more, what about the inherent occupational hazards they handle?
It is of urgent national interest that our retired valiant warriors are not pushed to protest on the streets where the world at large and our neighbours in particular would look at us askance.
- Binayak Datta is a chartered accounting and corporate consultant
