- News: The One Rank One Pension scheme has received ex-post facto approval from the Cabinet
- Background: It was brought in Nov 2015, to benefit more than 2.5 million ex- servicemen and war widows
- Scheme: Pension would be revised on the basis of the pension of retirees of calendar year 2013 and the benefit will be effective from July 1, 2014
- In future, the pension would be revised every five years
- News: The govt is reconsidering the denial of One Rank One Pension (OROP) to personnel opting Pre-Mature Retirement
- Those personnel opting Pre-Mature Retirement are not entitled to the benefits of the OROP, as per the current standing
- Reason: Creating a distinction between those leaving service for greener pastures and those leaving for the sake of the country
- Criticism: It goes against the recommendations of the A.V. Singh committee of 2004 which recommended ways of lowering the age of Commanding officers and brigade commanders for combat and support arms
- The veterans wanted equalisation of pension every year, or at least every 2 years.
- But the government has notified that it would happen only once in 5 years.
- Can you explain OROP in one sentence?
- OROP means military personnel retiring in the same rank with the same length of service would get the same pension.
- The govt. is planning to refer the issue of One Rank One Pension (OROP) to the 7th Pay Commission.
- Though the deliberations continued between govt. and representatives of ex-servicemen, but failed to sort out differences.
- Recently, the Pay Commission was given a 4-month extension, its recommendations could include the long-pending OROP scheme
- OROP seeks parity for all service personnel retiring on the same rank and tenure, irrespective of when they retire.
- The govt.’s commitment has done little to contain the growing unhappiness in the community of ex-servicemen.
- UPA govt. cleared the deal in-principle and allocated Rs. 500 crore, but there was no progress beyond.
- The process of completing administrative procedures across different departments seems to be an unending one.
- It will benefit 2.5 million ex-servicemen and women immediately, incurring nearly Rs. 8300 crore on govt. exchequer.
Everything That You Need to Know on OROP
- It is a pension scheme for the armed forces personnel which was in existence till 1973.
- This scheme provided same pension for same rank and for the same length of service irrespective of the date of retirement which was the basis for determining the pension and benefits of the Indian Armed Forces till 1973.
- OROP was terminated by the government in 1973.
Which government was in power at that time and who was the PM of India?
Then came the Koshiyari committee –
Bhagat Singh Koshiyari headed a committee which comprised 10 members (an all party parliamentary panel). It was formed in 2011.
What were the recommendations of the committee?
- OROP should be implemented in the defence forces at the earliest and a separate commission should be formed to take decisions on pay allowances, pension, family pension etc. in respect of the defence personnel should be taken into the account by that committee.
- The committee recommended to absorb the Armed Forces personnel after their military engagement into other services of government which is a custom in countries like U.S. and China.
What would be the financial Implications?
- Early estimates were around 3000crores for OROP.( by Ministry of Defence)
- Revised estimates vary between 8000 to 9000 crores.
- According to the Koshiyari committee the estimates for implementation of OROP were around 12000 crores.
Is OROP expensive for the government?
- OROP is affordable by the government as it is a small fraction of the military pension budget.
- It includes about 4,00,000 defence civilians.
- Defence civilians, which includes the entire civilian bureaucracy in the ministry of defence ,retire at the age of 60 are mostly based permanently in Delhi and they are not covered by OROP.
- It is alleged that they oppose the OROP due to their exclusion from the scheme.
Government of India on OROP
- The government does not subscribe to the definition of Koshiyari committee, but states that there is a need for a new definition of OROP which should be acceptable to all the other ‘stakeholders’.
- The stakeholders were neither defined nor identified by the government.
- The government stand on the OROP prompted widespread dismay, disappointment and outrage amongst Armed Forces pensioners.
- The ministry of defence recommended the proposal for implementation after the approval of the Defence minister.
- Now it is with the of the Finance ministry which should make a call on the scheme.