Confidence dented but Truth should prevail

Facing the truth about the 3^rd Central Pay Commission

Did it really reduce Defence Personnel’s pensions to 50%

          Instances like these make me wonder why I seek to obtain and publish facts and truth about matters concerning ESM.

In the past few days, I have been at the receiving end of a vitriolic attack for suggesting that those perpetrating the myth that the 3^rd CPC reduced our pensions from 70% of last pay drawn to 50% after the victory of 1971 must own up before all ESM get tarnished with the same brush that we were all either ignorant, but more damagingly, we spoke an untruth and continue to repeat it.

My errors, if I may, were that I searched for the 3^rd CPC Report to vindicate that stand and, more importantly, provide the documentary proof of the above repeated assertion.

One ESM officer, an office bearer of an organisation, queried my disagreement for the method and manner of each of those myth perpetrators, as well as the philosophy of the organisation by using an untruth to increase the sense of injustice among ESM. He countered that many have received “diluted” OROP and have not queried it. Does that justify uttering and repeating an untruth?

I am more shaken that even after placing that Chapter 53 of the 3^rd CPC Report on this blog not many of the more vociferous readers and commentators have questioned things like these: -   

If you study this carefully, it may be a sinister plan something similar to the 3^rd CPC.

http://indianmilitaryveterans.blogspot.in/2015/07/military-pension-concept-by-brig-v.html

Why OROP is not ‘unconscionable’

The armed forces have got a raw deal in terms of pensions and pay since Independence

Earlier, armed forces personnel drew 70% of their last salary as pension while civilian government servants drew about 30% or so of last pay drawn, a practice that was in vogue the world over. The 3rd central Pay Commission (CPC), in 1973, made the pension percentage equal for both, reducing the armed forces personnel’s pension from 70% to 50 %, and increasing civil pension to 50%, on the logic that the armed forces would soon get pension under a new design—One Rank One Pension (OROP) — but that is yet to be implemented, 42 years later!

http://www.financialexpress.com/article/fe-columnist/why-orop-is-not-unconscionable/104629/

The discontent among the armed forces started in 1973 when the Indira Gandhi government decided to reduce pension as a part of the Third Pay Commission and aligned it to the civilian pension structure. Till then officers were entitled to 50 per cent of their last salary as pension, while in the case of jawans and junior commissioned officers the amount rose to 70 per cent of last drawn salary.

http://www.btvin.com/article/read/banner_story/2572/economicsurvey2016

Thus the Government ingeniously cut a soldiers pension from 70% to 30% of pay at the same time enhancing the civilian pension from 30% to 50%.

https://www.quora.com/Why-Indira-Gandhi-scrapped-out-One-Rank-One-pension-OROP

A SYSTEMATIC DEGRADATION OF INDIAN ARMED FORCES!

Aug 23, 2015

While so much has been shared on OROP, I would like to highlight certain facts,that MUST BE KNOWN to the Citizen of India.

Till 1973, the pensions of Armed Forces were 70% of the last pay drawn, while of the civilians, it was 30% of the last pay drawn.

https://www.linkedin.com/pulse/systematic-degradation-indian-armed-forces-darshan-pandher?forceNoSplash=true

The Facts (and the truth) from the 3^rd CPC Report (in italics) is this (emphasis supplied): -

The person associated with the 3^rd CPC Report was I. M. Lal and not M. B. Lal as quoted by one of the worthies above.

                                                                           

Officers

2.      The existing pension code for the Services is based on the recommendations of the Armed Forces Pension Revision Committee (AFPRC) which submitted its report in 1950. The introduction of the Death-cum-Retirement Gratuity (DCR Gratuity) Scheme for Servicemen in September 1970 is the only significant change that has taken place since the Post-War Pension Code was introduced with effect from 1^st June 1953 on the recommendations of AFPRC. Before formulating its recommendations, the AFPRC enunciated certain general factors for determining the entitlement to and assessment of pensions. The AFPRC viewed pensions and other terminal benefits as a reward for good service which should vary with the length and quality of service rendered; as an inducement to the right type of men to undertake continuous service; as compensations for early termination of career, liability to recall and for disabilities, if any, attributable to military service; and as an element towards the maintenance of those discharged and as support for the members of the family of deceased personnel.      

3.       The Services have, in their proposals, generally endorsed the principles enunciated by the AFPRC. They have also stated that Service pensions should take into account the peculiar conditions of service and the hierarchical set-up of the Services. They have added that an element on account of compensation for early retirement and liability to be recalled to service should be specifically provided when determining the pensionary benefits. In the case of death or disablement, the Services have proposed that compensation should be graded depending on the type of casualty ad degree of disablement. They have also proposed that pensioners should be protected against future inflationary trends.     

4.      By and large, the principles followed by the AFPRC continue to be valid. Our examination shows that it would not be proper to adopt the civil pension rules in the case of Service personnel because it would fail to take into account the peculiar hierarchical structure of the Services and the operational requirement of ensuring that the vast majority of the personnel in the armed forces be young and in sufficient good condition to cope with the rigours of Service life. We think that the grant of pension should be regulated as to enable Servicemen to earn full pensions at a relatively younger age compared to civilians. Further, the length of service beyond a point should not be allowed to influence pension rates, as that would induce these personnel to stay on in service in order to earn higher pensions even after they have ceased to be useful. We accept the need for providing an element of compensation in the pension rates for early retirement in the Service interest and we feel that this should be done in as explicit a manner possible. In formulating our recommendations with regard to the non-effective benefits, we have not considered it necessary to suggest changes in such matters as the age of retirement, the period of tenure prescribed for senior ranks, the periods of qualifying service for pension, and certain other conditions attaching to the grant of these benefits.

6…………………… The standard rates of pension for officers of the three Services in force from time to time are given in the table below: - 

TABLE IV

(in rupees)

Rank	Between 1-6-53 and 16-4-56	Between 17-4-56 and 30-9-61	From 1-10-61	Post DCR Gratuity pension after 10-9-70
(1)	(2)	(3)	(4)	(5)
2nd Lt/Lieut	275	275	300	272
Captain	350	350	425	377
Major	475	475	550	482
Lt Colonel	625	625	675	587
Colonel	675	675	750	638
Brigadier	725	800	825	696
Maj General	800	875	875	735
Lt General	900	900	900 (975 from 12.10.1970)	819
General	1000	1000	1000	840

The amounts in columns (4) and (5) of the above table are current rates of pension; rates in column (4) pertain to the amount of pension admissible where no DCR Gratuity is payable and those in column (5) to pension admissible in conjunction with DCR Gratuity.

7.       Although the Services favour the continuance of the existing standard rate system, they have pointed out that the pension earned by a Service officer is related to the minimum prescribed for the rank and is not increased if the actual period of qualifying service rendered by him is more. They have also proposed that the rate of earning pension after the provision of the DCR Gratuity in the case of Service officers should be higher than that prescribed for the civilians. The Services have criticised the manner in which the compensatory element for early retirement has been provided in Service pensions and have pointed out that this element fixed in 1953 has not undergone any change despite subsequent revisions in pay scales and pensions.

Personnel Below Officer Rank

38.    The AFPRC had broadly followed the civil pension rules in making recommendations on pensions for personnel below officer rank, without providing any compensatory element in pensions for early termination of career. However, they allowed the full benefit of the civil pension formula to only those Servicemen who were able to complete 25 years or more of colour service. Thus, while they suggested the minimum period of 15 years colour service for earning pensions, the minimum pension was calculated on the basis of 13/60 of emoluments and not 15/60. This depression was removed on the recommendations of the Kamath Committee in 1968. Since then, the only change that has taken place is the provision, in September 1970, of the DCR Gratuity on the civilian pattern for the personnel below officer rank also. After the provision of DCR Gratuity, the pension rates have been reduced by 11% to partially offset the cost of providing the DCR Gratuity.

43.    After detailed consideration, we have reached the conclusion that the right course would be to adopt the same approach for determining the pensions of personnel below officer rank as we have commended in relation to Service officers, viz., adding a weightage of 5 years to the prescribed length of qualifying service, subject to the total length of service reckonable for pension not exceeding 33 years, and applying the formula of 1/80 of emoluments as on the civil side for calculating the pension amount in conjunction with DCR Gratuity. We also proposed that the maximum of the pay scale prescribed for various ranks should be taken into account for calculating the pension of the rank. The addition of 5 years in cases where the period of qualifying service prescribed for earning pension of the rank is less than 20 years is a substantial benefit, which, we feel, provides adequate compensation for the liability to recall and the problems occasioned by early release from the Services, such as the transition from military to civil life, and the attendant uncertainty about securing suitable civil employment. We would again emphasise that the Government’s efforts should be viewed as a whole, and the adequacy of the 5 years weightage should be judged in the light of the package of other measures for the resettlement of released personnel from the Armed Forces.      

Finally, any one interested in the pdf version of the Volume III of the 3^rd CPC Report is welcome to either go to Digital Library of India or, take a short cut and email me for it.