Indian government revises pension scheme for soldiers

Indian Army veterans celebrate following the government's announcement that it will accept One Rank One Pension (OROP) reforms in New Delhi on September 5. AFP Photo

NEW DELHI // The Indian government on Saturday revised its pension scheme for soldiers, bowing to long-standing demands from ex-servicemen, despite the additional financial burden as its struggles to close a budget deficit.

But army veterans, some of whom have staged hunger strikes in New Delhi since June 15, said they were still not satisfied.

“We will continue with our protest as the government has not accepted all our demands,” said Satbir Singh, a retired major general who has been spearheading the protests.

The One Rank One Pension, or Orop, scheme will pay equal pensions to all former soldiers with the same rank and duration of service, irrespective of when they retired.

For example, a colonel who retired in 1985 after 22 years in the military will be entitled to the same pension as a colonel who quit last year after an equal length of service.

These pensions differed previously because they were based upon the soldier’s last salary received, whereas salaries have risen over the years to reflect the cost of living.

The new scheme will benefit roughly 2.85 million people — 2.25 million ex-servicemen and 600,000 widows of soldiers who either died in battle or after retirement. There are roughly 1.3 million servicemen currently enrolled in the armed forces.

Defence minister Manohar Parrikar said the Orop scheme was being implemented “despite the huge fiscal burden”.

“The government is proud of our armed forces personnel,” he said. “I hope the Orop issue is behind us.”

India had followed a policy of equal pensions until 1973, when it was terminated by the then prime minister, Indira Gandhi. Servicemen have been asking for its reinstitution ever since, particularly after a government committee recommended it in December 2011.

Prime minister Narendra Modi has promised to implement Orop since he began campaigning for the top office. But it has taken 15 months for his government to deliver, sparking anger among army veterans.

The implementation of the scheme has great financial implications.

India already pays out 545 billion rupees (Dh30bn) a year in pensions to former military personnel. Mr Parrikar estimated Orop would increase this amount by 83 billion rupees.

The defence sector accounts for nearly 43 per cent of pensions paid out by the government. More than 85 per cent of army personnel retire before the age of 40 and are immediately eligible for pensions, even if they find employment elsewhere. Other government servants must serve until the age of 60 before beginning to draw pensions.

The pension bill will rise based on the recommendations of future government pay commissions, which periodically set new pay and pension scales for government personnel.

“The challenge is that it is impossible to project going forward because we don’t know what the next pay commission will recommend,” said Sushant Singh, a New Delhi-based analyst and retired lieutenant colonel. “And because those recommendations will affect all pensioners, the impact will be huge.”

The Orop scheme will raise pensions for soldiers by at least 3,500 rupees a month, and at least 8,000 rupees a month for officers, depending upon when they left service.

However Satbir Singh, the leader of the ex-servicemen’s protests, told the IANS news agency that the Orop formulation was not acceptable. “We are not fully satisfied as they have not accepted the six points demanded by the ex-servicemen,” Mr Singh said, citing the exclusion from the scheme of servicemen who retired early.

Soldiers can opt for premature retirement after 15 years of service, and officers after 20 years — well before the official retirement ages, which vary by rank. They will still be eligible for pensions under the old scheme, fixed to their last salary

Mr Singh also wants pensions to be reviewed every two years, instead of every five years as promised by the government.

“If the government feels we are rigid, it is very sad,” Mr Singh said. “The soldiers give their life for the nation. Every day, two or three soldiers are martyred. We are demanding payment for service we have already rendered.”