The Narendra Modi government has cut its defence pension allocation in this year’s budget, angering ex-servicemen who were expecting an increased outlay in keeping with the one-rank-one-pension (Orop) scheme’s requirement of five-yearly pension revisions, already delayed by a year.
Retired officers said the country’s more than 30.5 lakh ex-servicemen felt cheated by a government that habitually hails the army to underline its nationalistic credentials. They now feared that let alone an increased pension, they might not even receive their arrears from previous years.
“The government had earlier cheated ex-servicemen by failing to implement Orop in letter and spirit (by balking at yearly pension revisions). It has now reduced the pension bill in this year’s budget. Neither jawan nor kisan is happy with this government,” a former army commander told The Telegraph, requesting anonymity.
Orop had been a longstanding demand from ex-servicemen seeking pension parity between those who had retired with the same rank and same length of service, irrespective of when they retired — with any future hikes for recent pensioners “automatically” passing on to their older peers.
While the Manmohan Singh government kept stalling, Modi had during the 2014 election campaign promised to implement the demand. His government introduced Orop in 2015 but stipulated parity-restoring revisions every five years, disappointing the veterans who wanted annual revisions.
While last year’s budget set aside Rs 133,804 crore for defence pensions in its budget, the allocation for 2021-22 is Rs 115,826 crore, a fall of more than 13.4 per cent. Even the actual spending in 2019-20 on defence pensions was higher than this year’s budget allocation. (See chart)
Defence ministry officials said the pension bill had been inflated last year to pay arrears of about Rs 18,000 crore, so the allocation was essentially the same this year.
Told that this year’s allocation suggested the government would not implement the five-yearly revision — already due last year — they said Orop was draining the exchequer and coming in the way of buying military hardware and executing modernisation programmes.
“The defence pension bill has more than doubled from Rs 55,000 crore in 2015, and is threatening to overtake the salary bill for serving personnel,” a ministry official said.
“The government has realised that its decision to implement Orop has boomeranged. This was why the UPA had dragged its feet on the matter.”
A serving army official too said: “The rise in pension expenditure has hobbled the modernisation of the armed forces amid the border standoff with China. The government has realised it and slashed the pension budget.”
But the veterans are unhappy. A retired officer said that had the five-yearly revision taken place, the government would have had to cough up an additional Rs 8,000-10,000 crore each year.
“Orop is another jumla (wordplay) by the government,” he said.
A retired colonel said: “It’s clear that the plank of Balakot-driven muscular nationalism was meant only to win votes. This government has cheated ex-servicemen by not even revising the pensions as promised.”
Overall, this year’s defence outlay is Rs 4.78 lakh crore, up from Rs 4.71 lakh crore last year. The allocation for capital expenditure is Rs 1.35 lakh core, up 19 per cent from last year’s Rs 1.13 lakh crore.
A recent proposal by the department of military affairs, headed by the Chief of Defence Staff, General Bipin Rawat, to raise the retirement age for officers and reduce pension for those choosing premature retirement too has angered serving and retired personnel.
Defence ministry sources said the proposal is to raise the retirement age from 54 to 57 for colonels, from 56 to 58 for brigadiers, and from 58 to 59 for major generals. Lieutenant generals’ retirement age remains 60.
Army sources said the main cause of the resentment was the suggestion to cut the pension entitlement of those seeking premature release.
Now, an officer can seek premature release after having served 20 years and is entitled to a pension that is half his or her last-drawn salary.
Under the new proposal, an officer with 20-25 years of service will get 50 per cent of the “entitled pension”, which in turn is half the last pay drawn.
An officer with 26-30 years’ service will get 60 per cent of the “entitled pension” and one with 30-35 years will get 75 per cent. Only officers who have served more than 35 years will be entitled to the full pension.
A defence ministry official said raising the retirement age would “ensure productivity” while “reducing the pension outgo will cut costs”.