The demand for One Rank One Pension (OROP) was first raised 33 years ago. Neither the Congress, nor the NDA made a move on it.
Six years ago, the Supreme Court directed the UPA to implement OROP. For five years, the UPA did nothing. It’s been 12 months since the NDA came to power and apart from some reassuring words from Prime Minister Modi, precious little has been done. Why are both the Congress and the BJP hesitant to implement what appears to be, on the face of it, a just demand?
Money, is the one-word answer. Because OROP is not a one-time offer, but a lifetime liability on the country’s coffers.
1. Retirement Age
While civilian employees retire at the age of 60, armed forces personnel retire at a much younger age. Sepoys retire between the age of 35-38. Junior Commissioned Officers (JCOs) and Non-Commissioned Officers retire before they turn 45. Most officers retire before the age of 50 and only a few who make it to the rank of Lt General, Air Marshal and Vice-Admiral serve till the age of 60.
On an average, a retired soldier would live 30% of his life as a pensioner. Compare this to a civilian employee, who would live roughly 7% of his life on a pension.
2. Increased Life Span
World Bank data shows the life expectancy of the average Indian male in 1982 (when the demand for OROP was first made) was 56 years. Easier access to better medical care has pushed that age to 64.6 years in 2015. A longer lifespan translates to an added strain on the Pension Fund for ex-servicemen.
3. The Compound Effect
The Indian Ex-Servicemen Movement is demanding that those who retired before 1996 be upgraded to the pensions sanctioned by the Sixth Pay Commission.
Pay and pension for servicemen has already increased and will continue to increase with successive Pay Commissions. Also the number of retirees will swell every year. These two factors will have a compound effect on the money that leaves the State exchequer.
The Financial Express reports that defence pensions have doubled in the last five years to a whopping Rs 54,000 crore.
While that may look like a small amount to make for those who sacrifice their lives to defend the nation, it will rise dramatically when the next Pay Commission – its report has to be implemented from January 2016 – puts out its award.
– April 2, 2015 report in The Financial Express
4. The Domino Effect
If One Rank One Pension is granted to members of the three Armed Forces, what then about Paramilitary Forces (CRPF, CISF, BSF, ITBP) who could demand similar privileges? It could also lead to a similar demand from central and state government employees who were moved from a fixed pension scheme to a contributory system (Government Provident Fund) in 2004. This would spell financial ruin for the country.
5. Forced Compromises?
An Economic Times report says that despite a 7.9% hike in India’s defence budget, the country is spending only 1.7% of the country’s GDP on defence. In short - this is the lowest we have ever spent on defence.
The Hindu reports that implementation of OROP is going to push up defence pensions payment by 40% – posing a fresh challenge to the Finance Minister who is trying to keep the Fiscal Deficit within the budgetary target of 4.1% of the GDP. While Arun Jaitley had made a provision for the scheme he presented in his July 2014 Budget, there was no mention of One Rank One Pension in the Budget Speech earlier this year.
Money for One Rank One Pension is sanctioned under the Defence Pensions Bill. But the question is, will it become an either/or situation? If OROP is implemented, will we have to skimp on our defence shopping list? Will we have to further compromise on our already-shoddy defence preparedness from an already-emaciated budget?
What’s One Rank One Pension?
One Rank One Pension seeks to give equal pension to those belonging to the same rank, who’ve served for the same duration in any of the three Armed Forces, regardless of when they retired. Currently, those who retired before 1996 get less pension than those who retired after.
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