TO Stop Accountants From Once Again Hoodwinking The Soldiers Rajnath Singh Forms...

TO Stop Accountants From Once Again Hoodwinking The Soldiers Rajnath Singh Forms Committee On OROP, Asks For Report In A Month


Defence Minister Rajnath Singh on Friday morning took the decision of equalisation of pensions of retired soldiers under the One Rank One Pension (OROP) formula. He has formed a committee to work out the modalities and method of the next revision of pension under OROP.

The Committee will he headed by the Controller General of Defence Accounts (CGDA). It will have representatives from all three armed forces besides other stakeholders. The committee has been asked to submit its report in a month’s time. It will make specific recommendations on the matter.

The issue cropped up as the CGDA had asked the Department of Ex-servicemen Welfare in the Ministry of Defence to clarify “whether any logic exists to initiate the process of OROP revision (equalisation) once the pension of past and current pensioners was equated on January 1, 2016”.

The revision in 2016 was done following the 7th Central Pay Commission (CPC).
In other words, the CGDA asked if pension should be revised now, that is five years from the original OROP cut-off date, or should it be revised later since it was revised from January 2016.

This meant pension of almost 25 lakh retired soldiers hanged in the balance.
The OROP for soldiers was implemented with effect from July 1, 2014, and a gazette notification said pension would be equalised after five years—that is July 1, 2019. The term ‘equalised’ means all soldiers who retired in the same rank and with the same length of service will be on par in terms of pension.

Retired soldiers have pointed out that increase in pension under the 7th CPC is not ‘equalisation’ of pension under OROP. Under OROP, pension is ‘equalised’ and not ‘revised’. Upward revision of pension due to implementation of the 7th CPC should not in any way be linked to the OROP equalisation.
In the ongoing fiscal, Rs 1,12,080 crore has been allocated for defence pensions. The services are literally weighed down by the bulging ‘establishment’ costs—salaries and pensions. The salaries of the three services and the civilians work out to be Rs 1,19,559 crore and now form 37 per cent of the budget of Rs 4,31,011 crore. Salaries and pensions take up more money than what is allocated for modernisation.

Views of Brig C S Vidyasagar on CGDAs note No 5699/AT-P/OROP-2/Vol-1 dated 05 Apr 2019 sent to Min of Def on OROP – 2018.

1. My considered views after going over the two page note of CGDA a number of times to understand their stand on OROP – 2018 are given in the succeeding paras.

2. OROP- 2013. Brig Kartar Singh (Retd), President, NCESMO & IESL has already written a letter to Min of Def (ESW) some time back to implement OROP – 2018 without any delay. In reply to his letter, Min of Def (ESW) confirmed to him in writing that they have issued instructions to CGDA to work out tables for OROP – 2018 as per the ministry’s instructions on OROP vide their letter dated 07 Nov 2017. The Ministry’s ibid letter, simply shows the method of working out OROP – 2013 by taking the pension of all those who retired in calendar year 2013 and to arrive at Average of Maximum and Minimum pension of each rank with QS ranging from six months to 33 years. Accordingly, Circular 555 for OROP – 2013 were issued fixing pension of all Pre – Jul 2014 pensioners from 01 Jul 2014. PDAs implemented new pension to all those who retired till 30 Jun 2014. Arrears from Jul 2014 to Feb 2016 were paid in four half yearly instalments in Mar 2016, Sep 2016, Mar 2017 and Sep 2017. For the gallantry award winners and single ladies, the arrears were paid in one go. Now CGDA has sought many clarifications on implementation of OROP – 2018 vide their letter dated 05 Apr 2019.
My Comments on CGDA letter No 5699/AT-P/OROP-2/Vol-1 dated 05 Apr 2019.

3. I read this letter atleast half dozen times to understand the contents. To many this letter may appear to be simply seeking some clarifications on implementation of OROP – 2018. But very few enlightened like you know that CGDA is questioning requirement of OROP itself. Their recommendation, to my mind, is not to implement OROP – 2018. I will show you how they are trying to influence Min of Def (ESE) not to implement OROP – 2018.

4. Para 2(a) Methodology for Implementaton of OROP – 2018. The CGDA as per their wont start their letter with simple queries on implementation of OROP – 2018. Their queries appear as if they know nothing how OROP is to be worked out. Min of Def (ESW) have already shown how the OROP is to be implemented vide Ministry’s letter dated 07 Nov 2017. The first query of CGDA is : Is same methodology to be implemented for OROP – 2018 as it was done for OROP – 2013. Even a 7th Standard student knows that OROP – 2018 is no different than OROP – 2013. Where is any doubt about OROP implementation of 2018 should be different than OROP – 2013? Having received instructions to commence work on OROP – 2018 few months back, now asking this simple query shows delaying tactics of CGDA. My answer is simply: Implement OROP – 2018 as it was done for OROP – 2013 vide Ministry of Defence letter dated 07 Nov 2017. That is the principle of Average of Maximum and Minimum pension of those retired in various ranks with varying QS in calendar year 2018 to be the pension in OROP – 2018 for all Pre – 2018 pensioners. The benefit of higher pension to flow from 01 Jul 2019

5. Para 2(b): Date of Effect of OROP – 2018. CGDA is asking Min of Def (ESW) to intimate from when the OROP – 2018 is to be effected. I am really surprised to see the naivety of CGDA by seeking clarification when no such clarification is needed. The OROP – 2013 was implemented from 01 Jul 2014. The next OROP is to be implemented after 5 years i.e. 01 Jul 2019 vide Min of Def (ESW) letter dated 07 Nov 2017. Therefore, the date of effectiveness of implementation of OROP – 2018 is 01 Jul 2014 + 5 years = 01 Jul 2019. If there is any change to this, Min of Def (ESW) would have given instructions long time back. Till date, there is no change to the date of effectiveness. Though many ESM organisations have demanded that OROP be implemented every year as per definition given in Koshiyari Committee report of 2011, Min of Def (ESW) has not changed their stance of implementation of OROP i.e. only once in 5 years.

6. Para 2(C): Recommendation of One Man Judicial Committee to be Factored into OROP – 2018. CGDA is asking Min of Def (ESW) to inform them of what all recommendations of OMJC report is to be factored in the OROP – 2018. Till date Min of Def (ESW) only constituted committee of Joint Secretaries of PMO, Min of Def (ESW) and Min of Fin. I am not aware whether the committee has submitted their recommendations and whether Min of Def (ESW) has taken any decision to implement fully or partly any of the recommendations of OMJC. Therefore, CGDA should simply implement OROP – 2018 without waiting for instructions of Min of Def (ESW) on the recommendations of OMJC.

7. Para 3: Impact of 7th CPC Recommendations were NOT Factored into OROP. The CGDA is deliberately creating confusion by linking 7th CPC and OROP. 7th CPC recommends pay to serving soldiers and pensions to retired soldiers w.e.f. Jan 2016. 7th CPC recommended fixation of pension by two methods. First is Notional Pay method and second one is 2.57 method. The 7th CPC also mentioned that till Notional pay method is finalized most beneficial out of the two methods to be implemented. Min of Def (ESW) vide their letter No : 17(01)/2017/D(Pensions/Policy) dated 05 Sep 2017 explained how the Notional Pay Method has to be worked out. They gave a number of illustrations as to how to arrive at Notional Pay as on Jan 2016 by multiplying the last drawn pay of all those retired with Fitment factor of intervening Central Pay Commissions right from 3rd CPC to 7th CPC. The Min of Def (ESW) in their illustrations showed that only those who retired later i.e. in 6th CPC are likely to benefit by Notional Pay Method as their basic pay, MSP and Grade pay when multiplied by fitment factor from 6th to 7th CPC of 2.57 will get them higher pension. For all Pre – 6th CPC pensioners, pension as on Jan 2016 = Pension in Dec 2015 x 2.57 is more beneficial.

8. Notional Pay Method Vs 2.57 Method of Pension Fixation as On Jan 2016. In the E-PPO given out by PCDA (Pensions) Allahabad / Prayagraj for me, a Brigadier with QS of 32 years’ service retired on 31 Mar 2004, the Notional Pay as on Jan 2016 is Rs 1,43,800 and with MSP of Rs 15,500, my pension on 01 Jan 2016 comes to Rs 0.50 x (143800 + 15500) = Rs 79,650 by Notional Pay Method. Whereas by 2.57 method it comes to: pension in Dec 2015 x 2.57 = Rs 37280 of OROP – 2013 x 2.57 = Rs 95,810. This again proves correctness of stand of Min of Def (ESW) that the Notional Pay Method benefits only those who retired closer to Dec 2015.

9. Impact of 7th CPC Not Being Factored into OROP. 7th CPC recommended that pension should be fixed by either of two methods. One is Notional Pay Method and second one is 2.57 method. I have not understood how can CGDA say 7th CPC recommendations have not been factored into OROP. The second method for Pre – Jul 2014 pensioners linked up OROP pension to pension in Jan 2016 by simple formula i.e. Pension in Jan 2016 = Pension in Dec 2015 x 2.57. For all Pre – Jul 2014 pensioners is pension in OROP. My pension as Brig with 32 years’ service retired in Mar 2004 is Rs 37280. Therefore, my pension by 2.57 method w.e.f. Jan 2016 = Rs 37280 x 2.57 = Rs 95,810. What more linkage do you want between 7th CPC and OROP – 2013. If they are referring to OROP – 2018, then pension w.e.f. Jul 2019 = Average of Pension of those retired in calendar year 2018 like it was done in OROP – 2013. Some would get higher pension than Average and some would get lesser than Average. Therefore, Average will ensure all Pre – Jul 2018 pensioners will get pension fixed w.e.f. Jul 2019. We have to understand one more point. All those whose pay was higher than Average pay of those retired in calendar year 2013 would continue to draw higher pay in 2014, 2015 and post – 2016. Some on the other hand would have drawn less pay than Average pay in calendar year 2013. Their pension in 2018 would still be less than Average pay of all those retired in a rank with a QS in calendar year 2018. What more orders from Min of Def (ESW) do CGDA need on this simple issue? May be I have not understood their point for which they want clarification from Min of Def (ESW).

10. Para 3(a) Notional Pay Method Brings Past Pensioners with Present Pensioners Hence there is NO NEED for OROP. CGDA in the garb of seeking simple clarifications, now come out with their bombshell of abolition of OROP altogether. CGDA’s argument is that Notional Pay method brings pension of all past pensioners with present pensioners. They, further say that same is the judgment of various Courts of Law. CGDA quotes judgment of Hon’ble Supreme Court in Maj Gen SPS Vains Vs UOI (2008) and DS Nakara case. This is the most damaging part of their note which veterans have to read, re-read many a time to understand how devious CGDA is now coming up with their true colours. The judgment simply says pension in 6th CPC of Maj Gens should be corresponding to their last pay drawn in 5th CPC and not at minimum pay in 6th CPC. Earlier method of pension fixation of Pre – 1996 Maj Gens from Jan 2006 denies benefit of increments earned by them while in service in 5th CPC. Whether a Pre – 1996 Maj Gen earned six increments or no increment, their pension in Jan 2006 in 6th CPC was fixed at 50% of minimum pay in SAI 2/S/2008 of Rs 60,700 i.e. pension is 0.50 x 60700 = Rs 30,350. W.e.f. Jan 2006 all Pre – 1996 Maj Gens got same pension of Rs 30,350 whereas they were drawing different pensions based on the number of increments earned in 5th CPC. With this judgment of Hon’ble Supreme Court, all Pre – 1996 Maj Gens got higher pension from Jan 2006 to Dec 2015 (than pension at Minimum of scale which was Rs 30,700 in 6th CPC). Many Maj Gens were fixed pension as high as Rs 35,750 pm w.e.f Jan 2006.

11. Notioanl Pay Method of Pension Fixation Method Does NOT Equate Pension of Past Pensioners with Present Pensioners. What veterans have to understand is that the Notional Pay Method of pension fixation does not equate pension of Past Pensioners with present Pensioners. I showed you by Notional Pay Method of Pension fixation, I, as Brigadier with 32 years’ service was fixed Notional Pay of Rs 1,43,800 only where as my counterparts in 2013 got Notional pay of Rs 1,76,199. The Average pension of Brig with 33 years in 2013 is Rs 37,280. The pay is Rs 37280 x 2 = Rs 74,560. MSP of Rs 6000 is to be deducted to arrive at Notional Pay in Jan 2016. The pay of Rs 74560 – 6000 = Rs 68,560. This is to be multiplied by fitment factor from 6th CPC to 7th CPC of 2.57. The Notional pay of Brigadier in Jan 2016 retired in calendar year 2013 is Rs 68560 x 2.57 = Rs 1,76,199. As per the arithmetic of CGDA pension of Brigadier with 32 years’ service retired in 2004 of Rs 1,43,800 and Brigadier of same length of service retired in 2013 of Rs 1,76,199 is same, then I have nothing more to say. How does Notional Pay equates pensions of any two pensioners of same rank and same length of QS in Jan 2016? It is totally wrong, misleading and incorrect assertion on the part of CGDA to state that Notional Pay method has equated pension of past pensioners with present pensioners in Jan 2016. Then the same 7th CPC in their wisdom knew that many past pensioners will not benefit by Notional Pay method, therefore added the second method i.e. Pension in Dec 2015 x 2.57 should be pension on Jan 2016.

12. Para 3(b): Notional Pay Method of Pension Fixaton as on Jan 2016. CGDA informs the Min of Def (ESW) that the revision by Notional pay method has just commenced, hence data for comparing pension of past pensioners with present pensioners is incomplete. The Min of Def (ESW) based on recommendation of CGDA himself has made exhaustive instructions on Notional Pay Method vide their letter No: 17(01)/2017/D(Pensions/Policy) dated 05 Sep 2017. Does CGDA take more than 18 months to commence work on Notional Pay method of pension fixation? They knew what was the fitment factor from 3rd CPC to 4th CPC, from 4th CPC to 5th CPC, from 5th CPC to 6th CPC and from 6th CPC to 7th CPC. The last drawn emoluments of pensioners retired in various CPCs is also known. The Min of Def (ESW) has given eight illustrations how Notional Pay Method is to be worked out way back in Sep 2017. One appendix is for JCOs / OR and second one is for Officers. Once you know the fitment factor of the intervening CPCs and the last pay drawn at the time of retirement, is it difficult for CDGA or PCDA (Pensions) Allahabad to work out Pension by Notional Pay Method as on Jan 2016?

13. Para 3(C): Anology of Post Jul 2014 Pensioners Getting Less Pension than OROP Pensioners. CGDA is back to their old game of abolition of OROP altogether. How is the Post – Jul 2014 pensioners get less pension than OROP Pensioners? Veterans must understand why this happened with few of them and not all the Post – Jul 2014 pensioners as alleged by CGDA. I explained in my innumerable mails in the past, that OROP – 2013 is based on Average of Maximum and Minimum Pension. Let me at the cost of repetition explain this for benefit of all pensioners once again. In Armed Forces, all the serving soldiers of a particular batch do not get promoted to next rank at the same time. You take JCOs / OR or Officers, the promotions are not uniform. Even in Infantry where promotions are based on the availability of vacancies, some one gets promoted as Naik at just 5 years’ service in one battalion, where as in another battalion of the same Regt, Rifleman gets promoted as Naik after 9 years of service. In the case of Officers, the promotion policy in my time was 0 – 1 – 2. Let us take the case of 1970 batch. All pass out from academies at the same time. One gets into Infantry. Similarly, based on the number of vacancies others are allotted different Arms and Services in the Army. The promotion policy is all Infantry, Mech Infantry and Armd Corps Officers must get benefit of early holding of promotion board. Let us take an example. If No 4 Selection Board of 1970 batch Infantry / Mech Inf / Armd Corps are held say in 1988 for Majors to Lt Col, then No 4 Selection Board for Artillery / Engineers / Signals are held in 1989 and for ASC / AOC / EME it is held in 1990. Even if all of them retire in the same year i.e. 2004 with total service of 34 years, the officers from combat arms will have higher last pay drawn due to the number of increments drawn compared to officers from AOC / ASC / EME. Therefore, the last drawn emoluments of these officers of same rank and with same QS is different at the time of retirement. Therefore, their pension is also different. The Ministry of Defence (ESW) rightly or wrongly fixed pension in OROP at Average of Maximum and Minimum of pension of all those retired in calendar year 2013. As I mentioned, the pension of officers from Infantry / Mech Inf / Armd Corps of rank of Lt Col with 34 years’ service in calendar year 2013 could be high say Rs 36,765 pm. The pension of Lt Col from ASC / AOC / EME with 34 years’ service may be lower than Average say at Rs 32,765 pm. The average is 0.50 x (36765 + 32765) = Rs 34,765 pm. All those who retired in calendar year 2013 with pension less than average of Rs 34,765 got fixed pension of Average i.e. Rs 34,765. For example, Lt Cols from ASC / AOC / EME with 34 years might have been fixed pension of Rs 32,765. Such officers got benefited by Rs 2000 in OROP. I am sure it must be same in Navy and IAF.

14. Why Some and Not All Post – Jul 2014 Pensoiners get Lesser Pension than OROP Pensoiners? All veterans must understand the reason for this to demolish the argument of CGDA, that this is widespread as if all Post – Jul 2014 pensioners got pension less than OROP Pensioners. I explained in para 13 above that in any year all pensioners of same rank with same QS will not have same pension. In few cases, the soldier might not have earned report and he is deferred in the promotion board. Even JCOs / OR in foreign assignment give Adverse Career Certificate as they want to continue in foreign assignment. Such soldiers miss out getting promotions along with their batch mates. They get promoted one or two years later and earn less number of increments in their promoted rank. Therefore, their pension for the same rank and same QS is not same. In such cases,pension will be less than others of the same batch but got promoted earlier.

But such personnel are not in majority. Very few Post – Jul 2014 retirees may have such lesser pension than OROP – 2013 pensioners.
15.% Now let us understand this anomaly of Post – Jul 2014 pensioners getting less pension than OROP – 2013 pensioners is not widespread as alleged by CGDA..

Let us take few more examples. The Officers from ASC / AOC / EME who retired post – 2014 will definitely have lesser pay than Average in 2013 as they got promoted 2 years later than batchmates of Infantry / Mech Inf / Armd Corps. Since these officers are not covered by OROP (as they retired later than in Jun 2014), they get only annual increment which is just 3% of (Pay in pay band + Grade pay) in 6th CPC.

When you keep giving them increment from 2013 to 2014 and to 2015 their pay will be lesser than Average Pay of 2013 and their pension in Jan 2016 is also going to be lesser pension of OROP – 2013 pensioners. But such cases are not large.

Therefore, CGDA by their statement “ If the anomaly turns out to be WIDESPREAD, the logic of revising pension of past pensioners to brig them to the level of current pensioners would not subsist” is to be understood as totally incorrect, misleading and deliberate attempt on their part to abolish OROP.

Veterans must understand that this dangerous statement of CGDA amounts to abolition of OROP. In such cases the Min of Def should enhance pension of such affected Post – Jul 2014 pensioners with that of OROP.

Brig Vinayak, I have given my considered views. It is now upto various ESM organisations to keep quiet about CGDA Note dated 05 Apr 2019 or send their representations to the Ministry of Defence (ESW).

I am also requesting Brig Kartar Singh, President NCESMO and IESL, to go through my long response to your observations on this very important issue and take it up with Min of Def (ESW) without waiting for an audience with Hon’ble Raksha Mantri.

Veterans who fought for OROP by organising agitations for many years now should not be mute spectators before the Min of Def (ESW) goes by ill advice of CGDA and abolish OROP altogether.

The efforts of various ESM Organisations fructified due to their struggle for many years, in that we got OROP though not to our satisfaction. OROP– 2018 should be implemented even with its shortcomings. Let the Govt of India, Min of Def take any decision on OMJC report later.

If some or all recommendations are approved then all pensioners who are adversely affected like Naiks, Havildars and Majors will benefit. Arrears in such cases can come out later.

Therefore, there should be no delay in implementation of OROP – 2018.