IESM: Chairman's Desk- OROP Reflected in the Budget 2009

Date: Tuesday, 7 July, 2009, 10:30 PM
Dear Colleagues,
Buoyed by the initial budget news through TV stickers yesterday, several ESM from nearby States of Haryana, Rajasthan and UP had called up to congratulate the IESM for getting OROP. With the reality taking root, most of them and many more called up again today to express their disillusionment and anger at the government misleading them and the public by falsely claiming that OROP had been sanctioned. Without exception they all resolved to carry on their struggle for OROP.
The exact implication of what the government plans to include in their 2100 Crores expenditure still lacks clarity. Plans for next action will be firmed up after the haze lifts.
Best regards,
Lt Gen (Emeritus) Raj Kadyan, PVSM, AVSM, VSM
Chairman IESM

Comments Budget 2009: OROP
The amount allocated in the Indian Union Budget 2009-10 toward OROP is Rs 2100 crore. If we divide this amount by 12 lakh as stated in the FM speech, we get a figure of Rs 17,500.00 per ESM. Even if we divide this figure by 22 lakh the total estimated number of ESM, we get a figure of Rs 9,545.00 per ESM. May be I am wrong in the above calculations - please recheck. If my above calculations are correct - which I think is correct, then why are we making these statements against the announcements made by the FM? I feel we should wait for the revised pension tables to be issued before we condemn the announcement made by FM and draw any other conclusions.
In Service of Indian Military Veterans
Chander Kamboj

It is good that this Govt seems to be sitting up and has started thinking seriously about OROP for armed forces Pensioners. The recent announcement in the budget speech by the Finance Minister is expected to provide some parity in pensions to pre/ post 1997 retirees in PBOR category. The exact details are, however, awaited. I suppose, it is a matter of time that this concept will be extended to the officers too.
Here is the verbatim extract from the Budget Speech:
Budget Proposal: One Rank One Pension for Ex-Servicemen (OROP)
1. "..... On the basis of these recommendations, the Government has decided to substantially improve the pension of pre 1.1.2006 defence pensioners below officer rank (PBOR) and bring pre 10.10.1997 pensioners on par with post 10.10.1997 pensioners.
2. Both these decisions will be implemented from 1st July 2009 resulting in enhanced pension for more than 12 lakh jawans and JCOs.
3. These measures will cost the exchequer more than Rs.2,100 crore annually.
Certain pension benefits being extended to war wounded and other disabled pensioners are also being liberalised."
A small calculation
Annual Budget for this OROP Rs 2100 Crores= Rs 2100 x 100= Rs 210000 Lakhs. Target beneficiaries 12 lakh jawans & JCOs (as per FM), therefore, Average per individual annual hike/ benefit Rs 210000 lakh/ 12,00,000= 0.175 Lakh. Average Monthly benefit per individual is Rs 17500/12= Rs 1458/- only. So what is the big deal and all the jubilation about? how is it going to bridge the gap? Or is it that i am missing something or making some stupid calculation mistake.
Col Rajaraman (Retd)

It is hoped that the Anomalies Committee will first debug the Pay Commission Maze of Mess. This debugging if done in isolation, will cause a estimated outflow of Rs 500- 600 crores...
The Government has constituted a high level committee headed by the Cabinet Secretary to reduce the gap in the pensionary benefits to soldiers and officers and bring it as close to `One Rank, One Pension'.

"The other members of the committee are Defence Secretary, Home Secretary, Secretary (Personnel), Secretary (Expenditure), and Secretary (Ex-Servicemen Welfare)," said a senior Defence ministry source.

Financially the decision will additionally cost the government around 500-600 crore per annum and would be much less than the estimated financial liability for grant of OROP, the source said.

The other committee set up by the Ministry of Defence will be headed by Secretary (Defence Finance), Indu Liberhan, to sort out anomalies in the implementation of orders relating to armed forces pensioners.

The Sixth Pay Commission report had recommended 50 per cent weightage for armed forces PBORs during retirement, whereas earlier they would receive 70 per cent weightage until rehabilitated in other paramilitary forces. (ANI)
High-level committees to look at ex-servicemen’s ‘One Rank, One Pension’ demand Submitted by Praful Kumar Singh on Mon, 05/04/2009 - 11:49