An email and what the Min of Fin website states - OROP

Part of an email received on 19 Aug 2015 from Lt Gen P G Kamat (retd), former Commandant of the Army War College

Quote

My Dear Sirs,

I have got information from an authentic source regarding the confabulations that took place at the PMO prior to I Day. The details are as under: -

(a)  The PM met the Fin Minister, RM, Home Minister, and Minister for External Affairs and the OROP was discussed. All agreed to grant OROP except the Finance Minister, who said that he cannot raise the amount except from under the head of Calamities. He was then instructed to come back on the issue soon and the amount would be given from 'Calamity Fund'. He was all set to announce it on I DAY speech, but……………….

Unquote

So where does that leave the OROP?

It is well known that our Minister of Finance has a wry (synonyms: ironic, cynical, sardonic) sense of humour. If the email (quoting a senior but retired bureaucrat close) re-produced in part doing the rounds is to be believed, it only reinforces this fact.

What is the National Calamity (Contingency) Fund (see his Ministry’s website for more details)? Briefly, it provides financial assistance in case of Natural calamities of cyclone, drought, earthquake, fire, flood, tsunami, hailstorm, landslide, avalanche, cloud burst ,and pest attack.

Does OROP qualify as a natural calamity? Maybe it does because the cause and effect is gaining momentum, especially after the unnecessary and avoidable Delhi Police & NDMC (who point fingers at each other) misadventure on 14 Aug 2015. It brought the OROP off the dusty & quiet shelf of the TV and print media and gave it the publicity it lacked from 14 Jun 2015, when Lalit Modi, the Rajes and the Swarajs dominated the air waves and print media.   

 Now, let us just cast a glance at what transpired in the Budget speeches of Feb and June 2014, and how different they are from Budget speech of 28 Feb 2015. The quotes below are from the Ministry of Finance website.

May be, just maybe, you will agree that the Minister has a wry sense of humour. Or will you find a kernel of truth because he has not planned payment of the OROP in Budget 2015?

 First, Shri P Chidambaram, Finance Minister of the UPA stated in Parliament his budget speech on 17 Feb 2014 as follows: -

ONE RANK ONE PENSION

 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 Rs 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…..

Then Shri Arun Jaitley, Minister of Finance of the NDA stated in his budget speech 2014-15 in June 2014 in Parliament as follows: -

"One Rank One Pension

140. We reaffirm our commitment to our brave soldiers. A policy of “One Rank One Pension” has been adopted by the Government to address the pension disparities. We propose to set aside a further sum of Rs. 1,000 crore to meet this year’s requirement."

  

Finally in Shri Arun Jaitley budget speech 2015-16 on 28 February 2015 there was no mention of OROP for he stated: -

"91. Non-Plan expenditure estimates for the Financial Year are estimated at Rs 13, 12, 200 crore. Plan expenditure is estimated to be Rs 4, 65, 277 crore, which is very near to the R.E. of 2014-15. Total Expenditure has accordingly been estimated at Rs 17, 77, 477 crore. The requirements for expenditure on Defence, Internal Security and other necessary expenditures are adequately provided."

As the R E for Defence Pensions for 2014-15 was Rs 50, 000 crore and he has allocated 54,000 crore in 2015-16 as the information below indicates

DEMAND NO. 22

DEFENCE PENSIONS

I. Estimates of the amount required in the year ending 31st March, 2016 to defray charges in respect of DEFENCE PENSIONS

Revenue                   Capital                      Total

(In crores of Rupees)

Charged:                               0.74                           ...                                0.74

Voted:                                    54499.26                   ...                                 54499.26

Budget estimate for Defence Pensions in 2014-15 was Rs 51,000 crore, Revised estimate was Rs 50, 000 crore]

 So where is the provision of Rs 8300 crore for OROP in BE 2015-16 – Nil

From Implementation of Budget Announcements 2014-15 (pages 33 and 34)

One Rank One Pension

                                                                        (Position reported on 30^th January, 2015)

S No.   Para No.

125          140 Budget Announcement:  

         

We reaffirm our commitment to our brave soldiers. A policy of "One Rank One Pension" has been adopted by the Government to address the pension disparities. We propose to set aside a further sum of Rs 1,000 crore to meet this year's requirement. [Nodal Ministry/Department: Ministry of Defence]

Status of Implementation

A working Group was constituted under the Chairmanship of CGDA for examining the proposal. The Working Group after deliberation suggested some possible options for implementation of One Rank One Pension (OROP). Meetings were held on 26.8.2014 under the Chairmanship of Defence Minister with Defence Secretary, Secretary (ESW), FA (DS) and CGDA on the implementation of OROP. The modalities are under consideration.

 Work in progress

[All the above information is available on http://indiabudget.nic.in/]

 Despite all the commitments made in public by the Prime Minister, his Minister of Finance appears to have, repeat, have set aside only Rs 1500 crore for One Rank One Pension in 2014-15, and nothing in 2015-16, certainly not Rs 8329 crore.

So now does fulfillment from diverse oratorical platforms of the commitment to pay OROP really need the assistance of the National Calamity Contingency Fund? What would the C & AG have to state when it does its audit? 

Like I wrote, the Minister of Finance has a wry sense of humour.