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The Big Picture – OROP Decision: What’s in it?

The Big Picture – OROP Decision: What’s in it?

Summary:

The One Rank One Pension issue, for which the pensioners of the Indian defence forces have been agitating for the last several years, has been announced by the government. Accepting the demand, the defence minister said that the commitment of the government has been fulfilled. The PM himself clarified that the defence personnel who retired voluntarily would also be covered under the OROP scheme. The defence minister had earlier said that those persons who had retired voluntarily would not be covered under the scheme. The defence minister also said that despite the huge financial burden the scheme will still be implemented and revision of pension will be done after every five years. The protesters, however, have decided to continue their protests as most of their demands were not fulfilled.

OROP is a scheme by which every retired (pension-eligible) soldiers belonging to a particular rank, will be getting the same amount of pension irrespective of the date he has retired on. OROP’s history dates back to 1973. It was in that year the Indian National Congress terminated OROP. This decision of the government was highly criticised and since then, has been a matter of strong controversy.

OROP is a complex issue. A thorough examination of interests of retirees of different periods and different ranks is needed. The inter-service issues of the three forces also require consideration. The estimated cost to implement the scheme would be Rs 8,000-10,000 crore. Arrears will be paid in four half-yearly instalments. Close to 26 lakh retired servicemen and over six lakh war widows stand to be immediate beneficiaries of the scheme. Pension will be re-fixed for all pensioners retiring in the same rank and with the same length of service as the average of minimum and maximum pension in 2013.

The veterans’ main concerns centre around premature retirees, pension revision, mode of re-calculation and base year for reworking pensions. They have been assured that premature retirees will not be deprived of OROP, but there’s no word from the government yet on the other demands. The defence minister has also announced that a one man judicial commission would be formed to look into the anomalies. But, veterans are opposing this. They want a five member committee.

Other unfulfilled demands of veterans:

  • Government wants to implement it from July 1, 2014 but the veterans want it from 1st April, 2014.
  • OROP offers an average of minimum and maximum pension scale in 2013 but the veterans want a maximum of the pension scale in 2013.
  • OROP grants a revision every 5 years. The veterans wanted revision in one or two years.
  • Government wants a one-member judicial commission to submit report in six months while the veterans demand a five-member team under Defense Minister to submit report in one month.
  • Initially it was decided that the OROP will also be applicable for war widows, disables and for those who took voluntary retirement. This has also stirred disagreement between the government and the veterans

Arguments for OROP:

  • Jawans retire at the age of 35 whereas a civilian can continue in service till the age of 60. So the salary, based on which the pension is decided is very less when compared to the salary officers are entitled at the age of 60. This rule financially handicaps a soldier. OROP will be beneficial in this situation.
  • Also, once these soldiers have retired at the age of 35, they are no longer absorbed in the workforce of the country, thus ending their career permanently. OROP can be a way to express the obligation of the government towards these veterans.

Arguments against OROP:

  • OROP will be very expensive and will put a huge financial burden on the government. This is not an onetime cost as this cost will keep on increasing as one pay commission succeed another.
  • The other uniformed personnel like the paramilitary and the state police forces will also start demanding to put them within the folds of the OROP
  • The legal argument states that the person who retired 50 years ago cannot be paid the same pension as someone who retired now. Also according to OROP, the veteran who served as colonel for 5 years will get the same money as someone who served in the same post for 2 year. This is the most important legal challenge before OROP.

Currently, officers who have served at least 20 years in the military get 50% of their last salary before retirement, as pension.