SCPC: Pension Order a new dispensation in reverse gear

One-Rank-One-Pension put in the Reverse Gear! WAR VETERANS BETRAYED

A good wage structure does not necessarily entail high salaries. It aims at equity and justice. Be it affluence or poverty, it must be distributed with prudence and sagacity.

A Trust Belied
It is appropriately said that the ‘politicians are a law unto themselves’. Promises made during the election rallies are like writings on shifting sand dunes; they are gone with the wind, the moment the votes have been cast. The ex-servicemen have just discovered this home truth with chagrin and dismay. The Chairperson of the current ruling alliance had personally endorsed one-rank-one-pension (OROP) format as a reasonable demand. Seen in that light, the letter issued by the Department of ESM Welfare on 11th Nov 2008 has come as a rude shock. The dispensation granted through this letter is eminently inferior to the pension structure granted by the Fourth as well as the Fifth Pay Commission. The OROP model has received a body blow. The very manner in which the above official communication was delivered to the Service Headquarters smacks of villainy. The captioned document, which affects more than two million veterans was unceremoniously handed over to the Pay Cells on the afternoon of Friday the 14th November a few minutes before the staff was packing up for the week end, three days after it had been signed. It was not considered prudent to communicate its contents to the press, because it was very well known that there is little in it to cheer the old soldiers or bring a smile on their wrinkled faces. We are told that the aforesaid Department was created to protect the veterans’ interests. The irony is that it is manned almost entirely by civilians and has “welfare” in its title. All that it has so far achieved is to create a few additional posts for civil servants, and issue obnoxious letters of the type mentioned above!

Let the Figures Tell the Tale
Government orders regulating the pensions of soldiers retiring after 1.1.2006 were issued a day later, and therefore, it is now possible to compare the quantum of pension sanctioned to pensioners of different vintages. A table which shows the comparative figures at a few representative ranks is given below. It is evident that the past pensioners have been given a raw deal in all cases except a handful of apex grade officers. Please note that this table assumes that the soldier retired after rendering the service prescribed by his terms of engagement and had reached the top of his scale. In case of the PBOR, combat category in the Y group has been chosen since it represents the largest population of soldiers. All the figures are the revised basic pension as on 1.1.2006.

Pre-1996/ 1996 to 2005/ Post 1.1.2006
Sepoy (19 yrs service): 3764/ 4667/ 6500
Hav (24 yrs service): 5008/ 5239/ 7845
Sub (28 yrs service): 9323/ 10532/ 10795
Lt Col (top of scale): 17,063/ 21,131/ 25,310
Col (top of scale): 26,050/ 26,050/ 30,375
Lt Gen (top of scale): 26,150/ 27,685/ 38190
Army Commander: 40,000/ 40,000/ 40,000

The Transition into the Revised Pension Paradigm
For the benefit of those who have not been able to comprehend the jargon in the paper and the maze of figures in the tables, the process of determining the revised pension is given below in a simplified form. With the exception of officers of the rank of Col, Brig and Maj Gen, the revised pension admissible to the pre-2006 retirees is derived simply by multiplying the Basic Pension (ie, without adding the 50% Dearness Pay merged on 1.4.2004) admissible before 1.4.2004 by a factor of 2.26. For those who retired after 1.4.2004, the multiplicand is 1.5067. This rule also applies to Lt Gens who retired after 1997 with a Basic Pay greater than Rs 23,450. All Cols have been granted Rs 26050 and all Brigs, Maj Gens and Lt Gens other than those whose Basic Pay was in excess of Rs 23,450 have been granted a uniform revised pension of Rs 26,150. It can be seen that this government order is a great leveler. It makes no distinction between the high and the low! Commuted portion of the pension (if any) will be deducted from the revised pension until the end of fifteen years from the date of retirement. In addition to the Basic Pension determined in the above manner, Dearness Relief (DR) will be admitted at the following rates. The rates of the existing DR already admitted on the Pensions will be adjusted while calculating the arrears. And these figures are given alongside for ready reference

New DR/ Old DR
1.1.2006: 0%/ 24%
1.7.2006: 2%/ 29%
1.1.2007: 6%/ 35%
1.7.2007: 9%/ 41%
1.1.2008: 12%/ 47%
1.7.2008: 16%/ 47%

Observations and Comments
The executive orders for the civilian pre-2006 pensioners were issued about a month ago. As such the orders for the military were long overdue. Consequently, it was widely believed that the major aspirations of the veterans would be met. But this dispensation falls well short of our minimum expectations. A preliminary review reveals the following defects:

OROP is a 25 year old demand. The Congress party has supported it all along. It was also a part of their election manifesto. We find that there is a very wide gap between the past pensions and the present ones. This is likely to arouse strong passions. It may also be mentioned that at the apex ranks (Chief and Army Cdrs) it is virtual OROP, and that may raise hackles amongst those who have been given a raw deal.

MSP Military Service Pay counts for pension. It will, therefore, raise the pensions of he post 2006 retirees. However in respect of the past pensioners, it has been engineered in such a manner that it is effective in a very selective and restricted manner. Neither for the PBOR nor for the junior officers does it make a substantial difference in the pension package. This is another issue which can cause bitterness.

Inter-se Relativities. Soldiers view their emoluments in relation with their peers and immediate seniors or juniors. In the instant case, the relativities have been disturbed so badly that the picture emerging at the end of the exercise is grotesque. There is a wide gap between the pensions of Lt Col and Col and the pension granted to four ranks from unit commanders to corps commanders is the same. Again there is a wide gap between the pension of Lt Gen and Army Commander. The structure fouls with the ethos of the military.

Aggregate benefit. The present perception is that there is a wide difference in the aggregate gain accruing to soldiers at different levels. Whereas at some levels, the ratio improvement is as high as three, in the case of the PBOR it is as low as 2.26. Further, since the revised DA formula is less liberal, the inflation neutralization is relatively lesser in magnitude. Those who have a head for figures would have observed that the index as per the old rates moved up from 124 in Jan 2006 to 147 on 1.1.2008 signifying an increase of 18.5%. During the same period, DA at the new rates moved up by 12% only. As a cumulative result of all these factors, the older veterans will have to tighten their belts and compromise on their nutrition standards and education of their children. And of course, consumer frills and thrills will have to be cut out completely.

Concluding Remarks
As one looks at the work done by the various Pay Commissions, it is observed that each of the previous three Pay Panels moved us closer to the OROP regime. The Fifth Pay Commission brought us down to just two categories, pre-1996 and post-96 pensioner. They introduced the concept of modified parity, through which the past pensioners were granted pensions equal to the minimum given to the future retirees. The current order puts this process in the reverse gear, and takes us farther from the OROP paradigm.

We are, indeed, very well aware of the very large population of military pensioners and conscious of the strain caused to the national exchequer by our increasing longevity. A viable long term solution was mooted by the Army as early as 1985; to reduce the number of pensioners through lateral shift of soldiers to the para-military forces. The Sixth Pay Commission has devoted a whole chapter, number 2.4, to this subject but as far as we can see, this very cogent suggestion has been put on the back burner by our dim-witted civil servants, mainly because of their lack of ability to comprehend the benefits and the mechanics of this administrative reform. It smacks of their lack of commitment to the armed forces.

Recommendation
I am tempted to offer a piece of unsolicited advice to the powers that be. To assuage the wide spread anguish created by the revised pensions granted by the government, I think there is a crying need to examine all aspects related with the problems of ex-servicemen. The imperatives for rejecting the OROP demand must be explained to the ex-servicemen and the genuine grievances of the veterans must be addressed with evident sincerity. The problem of re-settlement is far more acute and heartrending than inadequacy of pensions. The Sixth Pay Commission devoted a whole chapter, number 2.4, to this issue. If there are cogent reasons to put this issue on the back burner, we the people of India need to be educated on the subject. Many of us attribute the inaction on the part of the government to plain inefficiency and callous indifference to the plight of soldiers.

Acknowledgements
I am grateful to HE Lt Gen MM Lakhera, PVSM AVSM VSM the Hon’ble Governor of MIZORAM for motivating me to undertake this research and my lifelong friends, Lt Gen Raj Kadyan and Wg Cdr J Thomas, for some valuable inputs.

Maj Gen Surjit Singh (Retd)

Maj Gen (Retd) Surjit Singh, AVSM VSM FNAE has been associated with three Pay Commissions and has published a book “Wages Down the Ages". We once again thank General Surjit Singh for patiently deciphering the ESM pension pay orders. He has given our fraternity a lucid and crystal clear analysis of "One Rank one Pension" which has been effectively put in reverse gear by the SCPC. SCPC has betrayed the War Veterans and certainly as the nation grapples with the economic down slide, veterans need to tighten the buckle to greater degree than the rest of its citizens. The cheer, smiles and anticipation of veterans and widows reduced to despair and gloom!