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The Burden of Military Pensions

If the State cares for the people of India, it ought to know that without a radical change in its approach towards internal security, saving on pensionary benefits as well as improving the compensation package for military personnel would amount to a mere tinkering that will not travel far.



The “administrative, financial and legal

The Burden of Military Pensions

reasons” were not spelled out. Five days prior to that, the MoD was even more cryptic. On 10 December 2008, the Rajya Sabha was Gautam Navlakha informed by that “Government has not

If the State cares for the people of India, it ought to know that without a radical change in its approach towards internal security, saving on pensionary benefits as well as improving the compensation package for military personnel would amount to a mere tinkering that will not travel far.


ntil the Third Pay Commission, the pensions of soldiers were based on rank and the length of service and not linked to the pay drawn at the time of retirement. The Fourth Pay Commission (1983-86) disturbed this format, and the ex-servicemen have been protesting ever since.

Under the aegis of the Indian Ex-Servicemen Movement (IESM), the jawans and officers of the Indian army have been protesting against the government’s refusal to concede their demand for OneRank-One-Pension (OROP). What the members of IESM find particularly galling is the fact that the central government has offered a differential pension for those who retired before 1996 and those after 2006. As a result a lieutenant general who retired in 1996 would get a lower pension than a colonel retiring today. In a rankconscious and hierarchical organisation such as the armed forces these anomalies cause much heartburn.

The government of India’s response to the demand for OROP is provided in a written reply by the ministry of defence (MoD) to the unstarred question # 2268, on 15 December 2008, in the Lok Sabha.

The demand for ‘One Rank One Pension’ was not found acceptable due to administrative, financial and legal reasons. More over, the pensionary benefits of the Personnel Below Officer Rank, particularly of the three ranks of Sepoy, Naik and Havildar, have been significantly increased by increasing weightage from 5 years to 10, 8 and 6 years respectively, and by allowing pension of pre-01.01.1996 to be computed with reference to the maximum of the pay-scale introduced w e.f. 01.01.1996.

april 25, 2009

found the demand (for OROP) a cceptable”.

In response to another question on pension for ex-jawans who quit after 14 years, the MoD said on 16 April 2008 that “As per provisions, the minimum qualifying service required to earn service pension is 20 years for commissioned officers and 15 years for PBOR (Personnel Below Officer Rank). No change in the existing policy is presently contemplated by the Government.” Until the 1960s, the length of service of soldiers was seven years, which was first increased to nine years and then to 17 years. Thus whereas previously soldiers married after retirement at age 25, subsequent years saw the pattern change. Also unlike earlier when a battalion commander was in his 30s, the average age now is 40s (The Tribune, 17 August 2007).

A pension is a deferred wage for services already rendered. The IESM argues that persons rendering equal service, both in terms of quantum and quality, must receive equal pension. However, the pay commission award becomes effective only prospectively, and the disparity between past pensioners and their younger equivalents keeps widening. The Sixth Central Pay Commission (ScPC) award was no different. T ables 1 and 2 (p 19) highlight this aspect:

Thus, a sepoy who retired after 1 January 2006 gets a pension that is 82% more than the pension of a sepoy who retired before 1 January 1996 and 37% more than a havildar who retired pre 1 January 1996, despite the sepoy being two ranks lower in the military hierarchy.

But the disparity between the older and the younger retirees is not unique to the

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Table 1: Monthly Pension: Personnel Below Officer Rank (Rs)

Rank Pre Pre Post 1 January 1996 1 January 2006 1 January 2006

Sepoy 3,764 4,667 6,860

Naik 4,417 4,828 6,950

Havildar 5,008 5,239 8,030

Naib Subedar 7,967 9,198 8,980

Subedar 9,323 10,532 9,915

Subedar Major 10,792 10,792 10,795

Table 2: Monthly Pension for Officers (Rs)

Rank Pre Pre Post
1 January 1996 1 January 2006 1 January 2006
Lieutenant 13,500 13,500 15,885
Captain 13,850 13,850 17,865
Major 14,464 18,137 22,135
Lt Colonel 25,700 25,700 25,700
Brigadier 26,150 26,150 31,170
Major General 26,700 26,700 33,925
Lt General 27,700 27,700 38,190

Source: Raj Kadyan, Chairman, Indian IESM in www.

defence forces. It is visible among the civi lian employees too. However, the defence forces have a job profile which sets them apart from their civilian counterparts. And rank and hierarchy is an intrinsic part of the defence forces. It is contended by some members of the IESM that the financial burden on the exchequer to remove the anomalies would be Rs 2,200 crore. So, why is there a reluctance to accede to this demand and why the emphasis on savings? Let us begin by looking at the government’s p ension bill.

Pension Bill of the Government

According to the (interim) Expenditure Budget (Volume I), the Government of I ndia’s pension bill for 2009-10 is budgeted to be Rs 34,980.35 crore. This comprises Rs 21,790 crore towards defence and Rs 13,190.35 crore for civil departments. This does not include the pensionary charges for railways (Rs 7,610 crore) and department of posts (Rs 2,710 crore), which are treated as part of their operating expenses. Were these to be added then the total bill would be Rs 45,335 crore. Significantly, out of an estimated strength of

14.06 lakh civil government personnel, i e, excluding 4.84 lakh postal employees and

13.98 lakh railway employees – 8.40 lakhs or 60% belong to central paramilitary forces (CPMF). Thus, if we conservatively assume that CPMF pensioners constitute 40% of the civil pensioners, then the pension bill for the former can be approximately Rs 5,300 crore. And the combined pension bill for the defence and paramilitary forces would be Rs 27,090 crore which is more than 60% of the total pension outgo of the government (railways and posts included).

To place it in a perspective the total budgetary allocation for the defence and paramilitary forces is budgeted to be Rs 1,98,814.25 crore for 2009-10, which is nearly 22% of the total estimated plan and non-plan expenditure of Rs 9,53,230.95 crore. Out of this allocation, the wage bill, i e, expenditure on account of salary, w ages and allowances, is budgeted to be Rs 63,810 crore for all the military personnel. If one adds pension, which is deferred wages, then the total wage bill would be Rs 90,900 crore. This represents 40-45% of the total defence outlay. In other words, military pension is not only the largest chunk of the government’s pension bill, but also one which has not been scrutinised. While the rising burden is linked to awards by the pay commissions, the increased cost is also related to manpower augmentation.

Lateral Absorption

The SPC had argued that the lateral absorption of ex-servicemen into the CPMF would help save Rs 700 crore annually or Rs 7,800 crore over 13 years. According to the commission every year 40,000 armed forces personnel retire as against which the total number of vacancies in CPMF every year is 35,000. On the face of it this makes sense. But this saving is less than 1% of the defence pension bill and only a fraction of the total pensionary liability of the central government. This will go a very small way in reducing the pension bill. Although, with lateral induction, the pension being paid after 17 years can be paid after 30 to 33 years since it will become “lifetime employment” accor ding to the SPC. This change in ser vice condition, how ever, must first negotiate other problem.

The SPC has brought out counterinsurgency as a link which enables lateral movement from defence to paramilitary forces. The ministry of home affairs argued against that and said that the defence personnel are “trained to kill whereas police forces personnel are trained to control and not kill”. The SPC answered that defence personnel are “highly disciplined and are trained to take action as per the orders given and as per the demand of the situation”. And then went on: “defence forces are now being used in a major way in all the counter-insurgency operations…(as well as) being used for various kinds of duties in the interior of the country” (p 141). To the argument that this “will curtail the available employment opportunities” the answer was that “the scheme will provide lifetime employment to successful candidates who will serve for a few years in the defence forces and thereafter be literally shifted to CPOs/defence civilian organisation” (p 142).

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Economic & Political Weekly

april 25, 2009 vol xliv no 17


The important thing to note is that there is not much difference in training between the infantry regiments of the army and CPMF, with one-third of the defence forces and at least 50% of the CPMFs engaged in low intensity operations. Another problem is that a critical feature of counter-insurgency in India is the recruitment of people in the area where an insurgency is on. For instance, as per the MHA recruitment norms, 20% posts in the Border Guarding Forces (BGFs) and 40% in non-BGFs are to be filled by local recruits in militancy affected areas, i e, Jammu and Kashmir, northeast and “left wing extremist” affected areas, in every central armed police b attalion raised. Even otherwise, the c entral government recruits up to 60% on the basis of population of each state or union territory and is also enforcing minority representation in CPMF of up to 10%. These norms will have to be set aside were vacancies in the CPMF to be filled by inducting personnel from the defence forces.

But there is also a fundamental issue involved here which needs to be looked into. The Rashtriya Rifles (RR) was raised as a dedicated counter-insurgency force for use in Jammu and Kashmir. It was carved out from existing regiments of the army from 1990 onwards and at present, has 66 battalions with each battalion h aving 1,150 personnel. From a budgetary outlay of Rs 263 crore in 1998-99 it has grown in 2009-10 to a budgeted Rs 2,626.57 crore! Now as militancy declines what will happen to the RR? Will it be wound up or kept for use elsewhere?

Take another example. The budget for 2009-10 projects that total strength of CPMF, which was 7,89,866 in 2008, will reach a strength of 8,39,498 by 2010! Significantly, the strength of the CPMF was 4,97,058 in 1990. This does not include 134 Indian Reserve battalions raised by different states and paid for by the central government. The expansion in CPMFs strength is made on the basis of the assessment of the internal security requirement. So does it mean that the government believes that the future threat assessment demands this expansion? But what h appens if this threat assessment is exaggerated and misplaced? Militancy is on the decline in J&K, and barring Manipur also coming down in the rest of the northeast including Assam, where the United L iberation Front of Asom (ULFA) has split with one faction coming overground. When this is the current scenario, what are the future projections based on?

Even as conflict over pensions continues the central government has encouraged states to recruit ex-servicemen in new battalions being raised to combat left wing extremism as is being done in Bihar, Chhattisgarh, Jharkhand and Orissa. In fact, with simultaneous augmentation of manpower in the military and paramilitary forces (both at the central and state levels), this problem is going to increase. The point is that there are contradictions and pulls and pressure which are difficult to reconcile. Thus, being parsimonious in pension benefits while remaining profligate in recruitment for security forces (which will increase the future pension burden) does not suggest a sensible approach.

The Way Out

Somewhere along the line people have to question the burgeoning cost of an expanding security force, in which the dividing line between the defence and paramilitary forces has blurred, and the security forces have been deployed for long periods against our own people. Given that most armed conflicts are aggravated by military intervention, we may witness their proliferation as discontent rises due to economic crises. This amounts to the worsening of a problem and contributing to a criminal waste of human and material resources.

In other words, it may be possible for the government to ward off pressure from retired servicemen for higher pensions. But the more pertinent issue is, does the State care for the welfare of the people? If it does, then it ought to know that without a radical change in the approach towards internal security, every suggestion on saving on pensionary benefits as well as improving the c ompensation package for military personnel would amount to mere tinkering. Thus, rather than accept manpower expansion of armed personnel as a given and persist with colonial mindset of treating our own people as the “enemy” or “adversary”, there is a need to shed the anachronistic approach and explore democratic ways of resolving political problems. This alone can generate substantive and meaningful manpower and financial savings, enhance the credibility of and compensation for the defence forces, and direct our collective labour to better productive use.

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