Monday, 17 February 2014

Update 180214 - OROP - Really? Fully? Completely? Not Really!

Is it really OROP or modified parity by the new name?


Deccan Herald, Bangalore edition page 8, 18 Feb 14:

"Interim budget: Uniform payout approved for ex-servicemen, One-rank, one-pension for defence staff.................. Defence ministry sources said OROP is expected to cost about Rs 2500 crores every year and Rs 500 crore is only the initial allocation." - DH News Service.

From Times of India: 

One rank, one pension: '14 gun salute for Indian armed forces' by Rajat Pandit 

"On Monday, there was again scepticism whether it was full OROP or just "the eyewash of modified parity" yet again. "The UPA was in power for last 10 years but this comes only now. Moreover, Rs 500 crore seems paltry. Earlier, MoD and the controller general of defence accounts had calculated Rs 1,730 crore for 2014-2015. Another official figure was Rs 3,000 crore per year for OROP," said a senior military officer. But MoD contended the contours of OROP and its implementation will be worked out in the coming weeks. "The Rs 500 crore is just a provisional figure to show the government's intent," said an official. Chidambaram, too, said MoD had asked for Rs 500 crore but if more was required, it would be "fully provided".

The government, however, was mum on the legal and administrative reasons used in the past to junk the OROP proposal. Civilian pensioners, for instance, would demand the same with "a heavy financial implication of Rs 8,000-9,000 crore per annum", it had held. 


Does it mean a Col  or any other rank who retired at 25 years of service in 1996 will get the same amount of pension as a Col or any other rank who retired on 17 Feb 2014?

Does it mean relaxation of the 33 year clause for the Col  or any other rank who retired in 1996 to be eligible for same pension as the Col  or any other rank who retired on 17 Feb 2014.

Here is an earlier opinion expressed by an expert (not myself):

1.     Please refer to the Hon’ble Finance Minister’s declaration of the acceptance of the principle of one rank one pension for the Armed Forces. The text of the speech is: -

"One Rank One Pension
56.    Hon’ble Members are aware of the long standing demand of the Defence Services for One Rank One Pension (OROP). It is an emotive issue, it has legal implications, and it has to be handled with great sensitivity. During the tenure of the UPA Governments, changes in the pension rules applicable to the defence services were notified on three occasions in 2006, 2010, and 2013. As a result, the gap between pre-2006 retirees and post-2006 retirees has been closed in four ranks (subject to some anomalies that are being addressed): Havildar, Naib Subedar, Subedar and Subedar Major. There is still a small gap in the ranks of Sepoy and Naik and a gap in the ranks of Major and above. We need a young fighting force, we need young jawans, and we need young officers. We also need to take care of those who served in the defence forces only for a limited number of years. Government has therefore decided to walk the last mile and close the gap for all retirees in all ranks. I am happy to announce that Government has accepted the principle of One Rank One Pension for the defence forces. This decision will be implemented prospectively from the financial year 2014-15. The requirement for 2014-15 is estimated at 500 crore and, as an earnest of the UPA Government’s commitment, I propose to transfer a sum of `500 crore to the Defence Pension Account in the current financial year itself."

2.    The speech seeks to bridge the gap between the pensions of the pre and post 2006 retirees. This is the MODIFIED PARITY IN PENSIONS and not One Rank One Pension.

3.    The modified parity is applicable to all employees Soldier and Civilians alike and ensures that pre 2006 pensioners get the minimum pension applicable to post 2006 pensioners.  

4.   Another important issue regarding Modified Parity is that wef 1.1.2006 (post 6th CPC), the Govt had abolished the requirement of 33 years of service for full pension only for post 2006 employees while retaining it for pre 2006 employees as a part of the modified parity. Retention of the 33 yrs service pension clause for pre 2006 pensioners was challenged in the AFT in OA 106/2009 and in 2011, the AFT has declared the clause contained in para 5 of DESW letter No 17 (4) 2008(1)/D(Pen/Pol) dated 11 Nov 2008 unconstitutional. The govt has gone in appeal in the Supreme Court in the Case and WILL LOSE THE CASE in due course.  

5.  What the Govt has now done is that it has agreed to the judgement of AFT before its final  disposal in the Supreme Court. In fact the court judgement is effective from 1.1.2006 where FM has accepted is prospectively.

[Please see MA 673/2013 in OA 106/2009 Wg Cdr (Retd) VS Tomar ........Petitioner Versus Union of India & Ors. .......Respondents  elsewhere in this blog.]

6.   One rank one pension envisages same amount of pension for two soldiers who retired in the same rank after having served for the same length of service.

7.   The test of OROP is whether a Colonel who retired in Feb 1997 with 25 years of service will get the same amount of pension as a colonel retiring in Feb 2014 with same length of service.  

8.   The answer to this question is NO and hence what is announced as OROP is in fact MODIFIED Parity in pensions

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