OROP - Just the Truth

 

OROP – Just Truth

Introduction

 1.         Information  obtained through RTI Act, 2005 from official documents has been utilised to arrive at views expressed herein and links provided for verification. Please accept the judgement of the hon’ble Court with equanimity armed/equipped with this information.

 Part I

Third Central Pay Commission (3^rd CPC) did not abolish One Rank One Pension

https://drive.google.com/file/d/0B24ZEelYKwZ9Qy1mV3AxRERQQm8/view?usp=sharing

 2.         Not One Rank One Pension but Standard Rate of Pension (SRP) existed up to and including Third Central Pay Commission (3^rd CPC). The principle of SRP was mooted in 1949-1950 by the Armed Forces Pension Revision Committee (AFPRC) commenced as the Post War Pension Code  (PWPC) of 1953 (Para 2, Chapter 53, Vol III of 3^rd CPC Report). Standard Rate of Pension (SRP) indicates that there was one fixed amount as pension for each rank and was directly related to (different) Standard (years of) service. Increments earned in the rank in which one retired/died did not matter.

 3.         The 3^rd CPC did not stop SRP in 1974 but increased the SRP amounts and gave benefit of additional years of notional service termed weightage for PBOR and Officers up to the rank of Brigadier to compensate for truncated careers. This weightage compensated for pro rata deduction as full pension could be earned only if an officer served for 33 years. 

 4.         Clarification concerning reduction of pension amount as available in Regulation No. 30, Air Force Pension Regulations, 1961 is re-produced below: -

 “30. Where an officer’s qualifying service is less than the standard service period for his rank, the amount of retiring pension is the standard rate for that rank reduced by one deduction according to the table below for each year or part of year of the deficiency.

Retiring Pension (Rs per month)	Rate of deduction (Rs pm)
1000 to 751	30
750 to 601	20
600 to 401	15
400-301	10
300-201	5
200 and below	2.50

 Deductions shall be made successively until the number of deductions due to be made has been completed, and each deduction in turn shall be at the rate of appropriate to the amount remaining after the preceding deduction.”

 5.         Amounts of pay vis-à-vis SRP is shown in the table below [collated from Chapters 50 (Pay) and 53 (Non-Effective Benefits) of Vol III of Report of 3^rd CPC]. Percentages of pay as pension before & after 3^rd CPC have been worked out against maximum pay by this author: -

 

Rank	Maximum Pay before 3rd CPC	SRP before 3rd CPC	%	Maximum Pay Rec by 3rd CPC	SRP Rec by 3rd CPC	%	Standard period of service (years) to earn pension
Major	1300	482	37	1750	612	34	22
Lt Col	1500	587	39	1900 (1800 for TS)	700	36	24
Col	1930	638	33	2175	850	39	26
Brig	2150	696	32	2400	1000	42	28
Maj Gen	2750	735	26.7	2750	1050	36.6	30
Lt Gen	3000 (fixed)	819	27.3	3000 (fixed)	1100	36.6	30
Army Cdr	3000 +250 (PP)**	819	25.2	3000+ 250 (PP)	1100	33.8	30
COAS*	4000 (PP)**	1000	25	4000 (PP)	1150	27.5	30

 * Pension for an officer of rank of General was set at Rs 3500.

** PP indicates Personal Pay

Change to 50% of last pay drawn as pension was also recommended by Services HQ to 4^th CPC

https://drive.google.com/file/d/1Rv4-biUA5IBiElRmAkUBdYz8BH8iZ-C0/view?usp=sharing

 6.         4^th CPC (at Chapter 13, Part II) of its report confirms that 3^rd CPC continued the practice of SRP in the following words: -

 “Retiring Pension

 Officers

       

13.5.    The concept of standard period of service and standard rate of pension was recommended to be continued by Third Pay Commission also. They also recommended certain weightages to the standard period which were modified by the Govt…” 

 Other Ranks

 13.6.    The concept of standard rate of pension is also applicable to personnel below officer rank with the difference that no standard period of service is fixed and the retiring pension is calculated with reference to qualifying service with weightage of 5 years. Standard rate of pension is worked out separately for each of the ranks in different pay groups….The slab system is also applicable to personnel below officer rank for working out retiring pension” (emphasis supplied).

7.         The 4^th CPC at Para 13.10 of Part II of its report states, inter alia, “The Services headquarters have suggested that the quantum of pension for each rank should be calculated at a flat rate of 50 per cent of the maximum pay (including rank pay)……We have recommended in Chapter 5 that pension which confers a long term benefit should be related to basic pay only and that instead of the slab system, it should be calculated at 50 per cent of pay drawn during the last ten months of service. We recommend that for armed forces personnel also pension should be worked out on a similar basis with rank pay added to the basic pay” (emphasis supplied).

 

Part II

Conjectures, Speculations and Erroneous Submissions

142^nd Report of Rajya Sabha Committee on Petitions (Koshyari Committee) at

http://164.100.47.5/newcommittee/reports/EnglishCommittees/Committee%20on%20Petitions/142.pdf

 

Annexures 1 & 2 to Koshyari Committee Report at

https://drive.google.com/file/d/12vpWlfTEt6GbLPprCTb4-mUSNd7IbTm3/view?usp=sharing

 

UPA Govt’s Interim Budget Feb 2014 (www.indiabudget.nic.in/budget2014-2015(I)/ub2014-15/bs/bs.pdf)

NDA Govt’s Budget speech of Jul 2014, then Finance Minister (also RM) Arun Jaitley stated (finmin.nic.in/fmspeech/fm_budgetspeech_july2014.pdf)

Concept and definition of One Rank One Pension

8.         It has been stated/quoted in the public domain that the Rajya Sabha Committee on Petitions (henceforth referred to as Koshyari Committee) and two successive Govts defined OROP as “Same Rank, Same Years of Service, Same Amount of Pension” and that the OROP would be revised annually. It is not borne out by documented facts, re-produced below for ready reference:-

(a)        Koshyari Committee defined OROP in the following words in the 142^nd Report: -

Concept of One Rank One Pension

 3.         One Rank One Pension (OROP) implies that uniform pension be paid to the Armed Forces Personnel retiring in the same rank with the same length of service irrespective of their date of retirement and any future enhancement in the rates of pension to be automatically passed on to the past pensioners. This implies bridging the gap between the rate of pension of the current pensioners and the past pensioners, and also future enhancements in the rate of pension to be automatically passed on to the past pensioners” (italics & emphasis supplied).

(b)        Ministry of Defence of the UPA Govt defined OROP in a meeting chaired by then RM (Shri A K Antony) with Vice Chiefs of the Army, Navy and Air Force, FA (DS) and CGDA vide MoD ID No. 12 (01)/2014-D (Pen/Pol) dated 26 Feb 14 as follows: -

3. It was noted that “One Rank One Pension” implies that uniform pension be paid to the Armed Forces personnel retiring in the same rank with the same length of service irrespective of their date of retirement and any future enhancement in the rates of pension to be automatically passed on to the past pensioners. This implies bridging the gap between the rate of pension of the current pensioners and the past pensioners and also future enhancements in the rate of pension to be automatically passed on to past pensioners” (italics and emphasis supplied).    

(c)        Government Statements by UPA and NDA in Parliament make no mention of approval of 142^nd Report of the Rajya Sabha Committee on Petitions or the impugned definition of OROP as may be evidenced from the following: -

(i)         In the UPA Govt’s Interim Budget Feb 2014, the record of proceedings is follows: -

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 Rs 500 crore and, as an earnest of the UPA Government’s commitment, I propose to transfer a sum of Rs 500 crore to the Defence Pension Account in the current financial year itself (italics and emphasis supplied).

(ii)        In the NDA Govt’s Budget speech of Jul 2014, then Finance Minister (also RM) Arun Jaitley stated 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 (italics and emphasis supplied).

(c)        The representative(s) of the Army stated (in Slide 2 of Annexure II) “Implications of OROP” (i) Uniform Pension to be paid to the Armed Forces Personnel retiring in the same rank with same length of service irrespective of date of retirement, and (ii) Any future enhancement in the rates of pension be automatically passed on to the past pensioners.”  

 9.         It may be seen from the foregoing that neither the Koshyari Committee in 2011 nor the Govts in 2014 defined OROP as “Same Rank, Same years of service, same pension” and all three recommended that future enhancement be “automatically passed” on without any periodicity.

Part III

Incorrect Submissions to the Koshyari Committee

10.       Several ESM and ESM Organisations made submissions to the Koshyari Committee as per Annexure 1 to the Report. Army HQ made a presentation as per Annexure 2. However, all appear to have made erroneous submissions to the Committee which appears to have resulted in erroneous recommendations and conclusions.

 11.       By the time representative(s) of the Indian Army made their submissions to the Committee on 27 May 2011 the following Govt/MoD notifications were available to the Armed Forces and to the Committee: -  

 (a)        GoI Resolution No. 304 dated 29 Aug 2008 approving Pay Bands for Armed Forces personnel  

(b)        SAI 1/S/2008 for Other Ranks and SAI/2/S/2008 for Officers dated 11 Oct 2008, and  

(c)        Amendment of placement of Lt Cols in Pay Band 4 and consequent pay scales through SAI/3/S/2008 issued in 2009

12.       Justification/necessity for 3^rd CPC to do away with OROP not brought before the Committee: - Paras 11.3 & 4 of the Report appears to have been compelled the Koshyari Committee to remark that necessity or justification for the Govt to change to civilians pension mode and cessation of OROP by 3^rd CPC was not brought before the Committee (by the incorrect submissions). However, from the afore-mentioned, it is reasonable to attribute the following: -   

 (a)        Neither the representative(s) of Army/Navy/Air Force nor ESM (incl IESM) stated that there was a Standard Rate of Pension or SRP (approved by the GoI vide Resolution dated 01 May 1974). SRP was one fixed amount for each rank and did not increase every year and that SRP was continued by 3^rd CPC with some improvements

(b)        Though the 4^th CPC Report (Chapter 13, Para 13.10) were available to the Army Representatives and ESM by May 2011, neither of them provided to the Koshyari Committee the factum of who and why SRP was changed to Pension being 50% of last pay drawn (plus rank pay for Armed Forces officers)   

 Therefore, if 3^rd CPC did not tinker with SRP, let alone cease a non-existent OROP, any justification  was still born (or as the medical authorities say, “Dead on Arrival).  

13.       The next erroneous submission to the Koshyari Committee by the Army representative was that ‘Pension of retired Lt Col to Maj Gen was fixed at Rs 37400 in PB-4’ (see Para 6.2 of the  Report).

 (a)        A more truthful submission by Army/ESM to the Koshyari Committee should have been extracted from SAI No. 2/S/2008 that the starting pay for each rank as (i) Rs 37400 for Lt Col, (ii) Rs 40890 for Col, (iii) Rs 43390 for Brig, (iv) Rs 50700 for Maj Gen and (v) Rs 51850 for Lt Gen in SAI 2/S/2008 dated 11 Oct 2008.

(b)        Further, neither Army/ESM drew the Koshyari Committee’s attention that uniform/same pension for same rank for same years of service would need an amendment/corrigendum  to  MoD letter No. 17 (4)/2008(2)/D(Pen/Pol) dated 12 Nov 2008, wherein it is stated in Para 3.1 that Reckonable Emoluments (RE) to calculate pension would comprise  “Pay in the Pay Band, Grade Pay Military Service Pay and NPA if any, last drawn” (emphasis supplied). 

 This incorrect input appears to have resulted in the Koshyari Committee’s Report  in Para 11.6 holding, "officers of higher rank would remain at disadvantageous position because of pay being fixed at the minimum of PB-4 for Lt Col to Maj Gen.”

 14.       K P Singh Deo Committee: - In Annexure 2 (last slide), the Army rep has stated that “there was historical acceptance (of OROP) yet not implemented” and quotes the ‘Brig K P Singh Deo (retd) Committee Report of 1983’. This is yet another erroneous submission. Chapter 14, Para 14.5 of Part II of 4^th CPC’s report clearly states as follows:-

 “  14.5.            …..Therefore, for the first time government considered it necessary to have a comprehensive review of the work done so far in regard to resettlement and welfare of ex-servicemen and appointed a Committee in March 1984 under the Chairmanship of the then Minister of State in the Ministry of Defence. The report of the high level Committee was submitted to government in October 1984. We have been informed that the Committee had given 68 recommendations out of which 46 recommendations have already been fully accepted by the government and others are in different stages of consideration. A list showing the position in respect of the various recommendations as on August 8, 1986 is given at Annexure 14.1……

 14.6.    The following three recommendations made by the Committee regarding pension structure were referred by (the) government to us: -

 (i)         Recommendation No. 15.37: ‘Rank for Rank’ pension and grant of increased pensions whenever pensions are revised (emphasis supplied).

(ii)        Recommendation No. 15.38: Appointing a permanent standing committee for inter-relating the cost of living index to pension.

(iii)       Recommendation No. 15.59: Restoration of commuted value of pension…….”

Annexure 14.1

VI (A)	RECOMMENDATIONS UNDER CONSIDERATION; DECSION ON WHICH WILL BE TAKEN AFTER RECEIPT OF THE REPORT OF THE FOURTH PAY COMMISSION
1	15.37	Rank-for-rank pension and grant of increased pension whenever pensions are revised
2	15.38	Appointing a permanent standing committee for inter-relating the cost of living index to the pension
3	15.39	Restoration of commuted value of pension

 15.       In Para 165.4, the Fifth Pay Commission reports that, inter alia “The Fourth Pay Commission considered the issue and stated that amount of pension undergoes changes as and when pay scales are revised and any attempt to equalise pension to revised scales of pay would amount to retrospective application of pay scales” (emphasis supplied).

PART IV – Other Issues

Periodicity of Revision 

 

16.       The Koshyari Committee in its Recommendations at Para 11 has made no mention of periodicity of revisions. However, the Koshyari Committee places on record in Para 6.4 that the Army rep, “He further submitted that there is administrative difficulty on the part of the Ministry that pensioners cannot be given increment every year. So, perpetually they will never be at par with current retirees. As a way out, he suggested fixing a period of five years or every Pay Commission to Pay Commission, for bringing all pensioners at par. He suggested a similar exercise for the family pensioners also” (emphasis supplied).

 PBORs who are at maximum of the scale across 3 Services

 17.       It is for information that PBORs across the 3 Services are not affected because they are granted pension at 50% of highest/maximum pay drawn across the Services as pension [PCDA (P) Circular 471 (https://pcdapension.nic.in/pcdapension/6cpc/Circular-471.pdf], which at Para 3 (ii) states inter alia, “Since common pay scales under revised pay structure have been introduced for PBOR of the three Services, the highest of such maximum for the rank and group in which discharged/invalided out, will be reckoned across the three Services for computation of pension” (emphasis supplied).  

Problems of Pension of Commissioned Officers at Maximum of the scale (being common)

 19.       One of the ‘demands’ floated as an alternative to the ‘One Rank Several Pensions’ problem is that Commissioned Officers too should have their pension fixed on the highest/maximum across 3 Services. However, the maximum of the scale across 3 Services for PBOR for a particular rank and Group does not exceed pay/pension of the higher rank(s) of the same Group because all PBORs are entitled to MSP*. For example: -

Naib Subedar (Level 6) Rs 112400+ MSP 5200 =Rs 117600 (Rs 58000) 

Subedar (Level 7) Rs 142400 + MSP 5200 = Rs 147600 (Rs 73800), and 

Subedar Major (Level 8) Rs 151100+ MSP Rs 5200= 156300 (Rs 78150)

 

* Group X Pay (for all PBORs of Gp X) and Classification Allowance (for Hav & equivalent below excluded)

 

20.       However, if the same formula is applied to officers, junior officers will draw more pay and pension than their senior officers as MSP is restricted to officers up to the ranks of Brig (and equivalents). See tabulation below

 

Rank	6th CPC*		7th CPC**
	(SAI/SNI/SAFI 2/S/2008)		Pay Rules/Pay Regs 2017
	Pay +GP + MSP	Pension	Level	Pay + MSP	Pension
Army Cdr	80000+0	40000	17	225000 +0	112500
Lt Gen (HAG+)	80000+0	39500 Paras 4(a) (ii) and 7 (a) (v) of SAI 2/S/2008)	16	224400 + 0	112200
Lt Gen (HAG)	67000+ GP 12000+0 = 79000+0	39500	15	224100 + 0	112050
Maj Gen	67000+GP 10000+0 =73000+0	36500	14	218200 +0	109100
Brig	67000+ GP 8900+ MSP 6000= 81900	40950	13A	217600+15500=233100	116500
Col	67000+ GP 8700+ MSP 6000=81700	40850	13	215900+15500= 231400	115700
Lt Col	67000+ GP 8000+ MSP 6000=81000	40500	12A	212400+15500=227900	113950

 

* Respective PCsDA have stated in reply to RTI applications that there were a total of 500 (non AMC/ADC/RVC) officers of ranks of Lt Col to Brig (and equivalents) earned the above stated amounts as on 31.12.2015.

 

** Respective PCsDA have stated in replies to RTI applications that there are a total of 180 officers of ranks of Lt Col to Brig (and equivalents) (non AMC/ADC/RVC) earning the above stated amounts as on 31.1.2020.

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