On Budget and One Rank One Pension

Dear Veterans,
Some us have promptly converted the 2100 crores given by the FM to the net average increase in pension @ Rs1460/= pm for the personnel other than the Commissioned Officers. My interaction with many reveals that this increase has delighted all and they are of the view that it is OROP for them. Delighted they are because initial pension revision got 25% more and now another 20% is likely to be added. Handsome is it not!

Let us take the case of a Naik of ‘Y’ Group.
He gets a pension of 4850 as on today
His revised basic pension is therefore 4850/1.22 = 3980
His basic pension before revision is therefore 3980/2.26 = 1770
His revised basic pension was fixed as 1770 * 2.26 = 4001 ie. 4010
This 1770 is @50% and not 70%. If it was at 70% the basic pension would have been 1770 * 1.4 = 2480
His revised basic pension would have been 2480 * 2.26 = 5610. A net increase in the raised basic pension to the extent of 5610 – 4010 = 1600
He would be drawing today a total of 5610 * 1.22 = 6850
Hence the net increase by this budget proposal is 6850-4850 = 2000 ie. 41% increase as on 01 July 2009.

The above illustration is more or less a true picture, subject to some fine tuning. I am given to understand that prior to the Vth CPC, pension was @70%, which was changed to 50% by the Vth CPC. If that is the case, you will agree that the Government has just restored 70%, which was one of the demands after Vth CPC recommendation was implemented.

Similar is the logic for those whose pension has been fixed as per Annexure iii. Thus all pre 2006 pensioners of a particular rank other than those of Commissioned Officers draw same pension if their pension is fixed as per Annexure iii and not as per Annexure i.

Now let us talk on OROP. The basic pension for all the pensioners today is at the bottom of the pay band as per annexure ii & iii, provided they have completed a total service 33 years including the grace period. Thus talking of a colonel with 26 years and another of 35 years of service, you find that they get the same pension 26050. Similar is the case with respect to all others. Is it not OROP? Except that those whose pension fixed as per Annexure i being higher than that of Annexure iii, get different pension though of the same rank.

Hence the claim by the Government that OROP has been granted for all the ESM (pre 2006 pensioners) can be interpreted as correct at its intrinsic and not implied meaning. The phrase ‘One Rank One Pension’ means to the Government and many of the ESM that the pension for two persons holding the same rank is the same. This was the case pre 1970.

Now Brig Rangachari correctly highlighted another paragraph from the speech of the FM which talks of rank based pension with no regard to the year of retirement. A few proposals have been put forward by various people claiming the same. Some chose the notional pay as the mean of the minimum of the pay scale as per the fitment tables of SAI and the maximum of the corresponding Pay Band. Some chose the maximum of the pay scale as per the fitment tables of the SAI as the notional pay. In any case the proposals are not in tune with OROP as propounded by ESM. “No two soldiers holding the same rank and same total length of service to their credit shall draw different pensions.” By this it is implied that more years of service entitles higher pension even if the rank is the same.

By these proposals referred to above some, who drew pay less than the notional pay at the time of retirement benefit and the some who drew more pay stand to lose. Government may choose to oblige us because by the law of average the financial implications may work out to be advantageous to the Government. The seniors suffer a loss in their pension which goes to the junior. Is it want intended by seeking ‘OROP’.

This is the precise reason why I was harping on Absolute Parity in Pension, the parity in pension between two soldiers holding the same rank and same length of service, the date of retirement being immaterial.
Let us see what happens!
Regards,
RN Radhakrishnan (Retired Major General)