Thursday, 20 August 2015

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


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……………….


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: -


 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


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 30th 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]

 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.



  1. In spite of PM, DM and others asking him to sort out the issue he is trying to be funny. Very poor sense of humour. I strongly feel that Calamity Jack of a FM must be shown the door. Is he still so anti-fauji just because he was voted out during the last elections and managed a back door entry although Mr. Modi did not want him there. The next time he wants to stand for elections he may have to be nominated from some where North Eastern States. Punjab is out for him.

  2. This transfer from Natl Calamity (Contingency) fund is justified and should be acceptable. In J&K ; Uttarakhand; Nepal and Yemen there would have been huge operational costs incurred due to the deployment of Defence forces. All these costs should have been carried out by debiting the National Calamity (Contingency) Fund. Else, the operational cost would be borne by the Defence budget. The Service HQs should demand the recompense for operations in aid of Natural calamities. This would more than adequately take care of the OROP shortfall. A rough estimate of wear & tear of defence eqpt and other admin cost would safely be around 1 Lakh crores in the past one and a half years. Therefore a transfer of even 15000 crores from the Natl Calamity Fund towards OROP is perfectly justified and should be demanded by the Service HQs and ESM.

    1. "... should be demanded by the Service HQs and ESM."

      How the Hon'ble FM manages the funding of OROP is entirely up to him. With his acumen, he should be able to resolve the matter easily. What the Services HQs and ESM should certainly demand is that OROP be implemented meeting all provisions of the Services HQs DGL.

      It would be interesting to see by how much the hyper-inflated estimates put out by scaremongers exceed the actual outgo on account of implementation of OROP as per modalities spelt out in that DGL when and if the implementation takes place.

  3. If anyone checks the track recordbof Jaitley he can understand what dubious character he is. He could not win an election and also drowned BJP in Delhi elecions ( he was i/c for delhi assy polls). He has been a failure n a big manipulator in DDCA n then in BCCI. Lalit Modi n Rajiv Shukla r his chuddy buddies. His only QR is his loyalty to PM for which he is there.
    To exect anything fair from such a man who has only been a manipulator n back door entrant is not correct. He always sits in Rajya Sabha n will be there only. Unless forced he will complicate the issue for one reason or the other

  4. This person rejected by electorate has stealthly in Govt by nomination.He should be simply relived for being a source of national disaster. Relived is mild ,he should be rather ....ed out.

  5. Yesterday in one of the TV programmes while the Industry pundits were discussing the improvements in Indian economy, the speaker was rather critical of Government appearing to veer towards accepting OROP fearing similar demands being raised at a later stage by other ministries. It is strange that all Group A Services enjoy enhanced pensions, as it is, due to higher salaries at the time of retirement due to NFU, which continues to be denied to the Armed Forces and yet do not want OROP to be released!



  7. Thanks Harry. Now all the fronts are covered - legal, financial, humanitarian ( as this Govt takes decisions on this ground), moral, and morale. As Omkar Goswami wrote in the Indian Express, let us see what the PM who prides himself as a nationalist will do, more important when!

    1. Dear Sir,

      More on OROP issue. This one is by Karan Thapar.

  8. Now it is very much clear that the FM is anti veteran and anti defense service. He has been telling lies through out. He should be sacked immediately by the honourable PM. The FM has damaged the image of PM and his party BJP govt so much so there are very big chances to get reflected in the Bihar election. So the PM and the BJP stalwarts must consider throwing this FM out of BJP. Remember he has no public mandate to be a member of ruling MPS and Minister. JAI HIND.