The Indian government wants soldiers to serve longer as it faces shortage of funds along with rising manpower cost. While that may temporarily address a burgeoning fiscal hole, it will increase the age-profile of the military.
The newly created Department of Military Affairs headed by General Bipin Rawat has proposed to increase the retirement age of officers of the Indian armed forces and to cut down pension of officers opting for premature retirement.
The proposal stated that DMA is reviewing the pension entitlements because the loss of high-skilled manpower results in a void in the services skill matrix and is counterproductive to the armed forces.
Pension Cuts
As per the proposal, only those who do more than 35 years of service will be entitled for full pension that is 50 percent of the last pay drawn.
The proposal also said that there will be no change of pension entitlements of battle casualties.
An officer with 20-25 years of service will get 50 percent of ‘entitled pension’. In other words the pension will be halved. The existing entitled pension is 50 percent of the last pay drawn.
An officer serving for 26-30 years would get 60 percent of 'entitled pension'; those doing 31-35 years of service will get 75 percent of entitled pension. Only those who do more than 35 years of service will be entitled for full pension, that is 50 percent of the last pay drawn.
Currently there are 3,235,370 defence pensioners, and approximately 55,000 pensioners are added every year.
A letter sent out by the DMA office on 29 October says that a draft of the Government Sanction Letter (GSL) "may kindly be processed for the perusal of secretary DMA by November 10, 2020." Secretary DMA is General Bipin Rawat.
Giving reasons for cutting down on pension, the letter stated that there are a large number of personnel who boarded out in view of lesser vacancies and some service restrictions.
It stated that at the same time there are several specialists or super specialists who are trained for high-skill jobs in the services that leave the service to work in other sectors. "Such loss of high-skilled manpower results in a void in the services skill matrix and is counterproductive to the armed forces. In view of this, it has been decided to review the pension entitlements," the letter stated.
Increase in Retirement Age
Further, there is a proposal to increase the retirement age of Colonels, Brigadiers and Major Generals to 57 years, 58 years and 59 years, respectively. The existing retirement age for Colonels, Brigadiers and Major Generals is 54 years, 56 years and 58 years, respectively. The same will apply to officers of similar ranks in the Navy and the Indian Air Force.
The letter stated that the proposal for increase in ages of retirement is presently under consideration. "Based on the feedback from the environment, and the deliberations/presentations on the subjects it is directed that a draft GSL (in two parts) be processed for changes in retirement profile and pension entitlements.."
The total defence budget, including pensions, in current fiscal stands at Rs 4.71 lakh crore. The allocation for defence pension was Rs 1.33 lakh crore.
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