Is Prime Minister Modi as helpless with IAS as Prime Minister Manmohan Singh

Primus Inter Predators? | Saikat Datta | Oct 13,2008 - Outlook

www.outlookindia.com/article/primus-inter-predators/238633

EXCLUSIVE

Sixth Pay Panel: IAS Advantage: The IAS lobby has cornered for itself far more pay than the Union cabinet cleared

Saikat Datta Outlook Magazine 13 October 2008

Smash & Grab

• The Union cabinet had cleared two additional increments for IAS officers, but bureaucrats gave themselves four
• Even the two additional increments cleared by the cabinet were meant only for a limited period. But the IAS lobby has manipulated to see that this incremental edge over others stays throughout service period.
• The additional fiscal burden for these increments not sanctioned by the cabinet is Rs 12 crore a year
• New notifications scripted by the babus have ensured that junior IAS officers will draw more than their seniors in other services
• Those in other services who were drawing the same pay as their IAS counterparts will now get less

Who is supreme, the Union cabinet or the bureaucrat? There was never the need to raise this question. But the flurry of notifications from babus of the department of personnel and training after the Sixth Pay Commission's recommendations were approved by the cabinet on August 14 makes one wonder whether bureaucrats—IAS officers—have overriding powers. Documents accessed by Outlook show that the cabinet approved a certain pay structure, but it was subverted by the IAS lobby for salary gains. (Please see Govt Resolution approving recommendations of 6th CPC, Para 1 (vii) for more details). 

 

At a conservative estimate, this manipulation entails an additional annual burden of Rs 12 crore on the exchequer, not taking into account the proportionate gains the IAS lobby has allowed the IFS, or foreign service. Besides, in terms of arrears, 4,000 IAS officers will end up being paid Rs 32 crore. All this is money that wasn't authorised by the cabinet in the first place. Here's how the interpretations and manipulations took place:

• On August 14, the cabinet okayed two additional increments for the IAS in the fifth year of service. This would put them ahead of other streams vis-a-vis salary till the completion of sixteen years, after which there is pay parity across all services.
• However, while interpreting the new pay band system, the IAS lobby slipped in an additional two increments in the tenth year as well.
• The bureaucrats have also ensured that the pay edge they have got over others remains till they retire. There will be no cutoff after the 16th year in service.

These machinations haven't gone down well with the other services. They have already shot off strong letters to the cabinet secretary and have also taken up the matter with senior members of the cabinet. "This malafide manipulation raises a basic question about who is supreme in the government—is it the Union cabinet or the IAS? The fact that this has been done shows that even the cabinet has no sanctity when it comes to the self-interest of a particular lobby in government," a senior police officer told Outlook.

State associations of IPS and Indian Forest Service (IFS) officers have sent in strong protests and representations, demanding not only a reversion to the original intent of the cabinet but also action against the officials responsible for "misinterpreting a cabinet decision."

In response to a fax to the Union finance ministry, an official associated with the pay commission told Outlook that the intention of the cabinet was to continue with the advantage for the IAS and IFS at three levels. "This was discussed at several meetings and has the sanction of the government," the official insisted, and pointed out that "members from the other services, including the IPS and the IFS, were present, they were fully aware of the implications, and gave their stamp of approval." However, the meetings took place on July 2, much before the issue came up before the cabinet.

Besides awarding themselves additional increments, the bureaucrats have also arbitrarily awarded themselves a higher salary structure than what was recommended through several arbitrary means. While the commission recommended Rs 9,000 as grade pay for joint secretary level officers, it has been increased straightaway to Rs 10,000.

The justification runs thus: an IAS officer of the director rank is equivalent to a colonel in the army or an SP in the police. The next step up the ladder makes a bureaucrat a joint secretary, equivalent to a major general or inspector general of police. However, police officers and those in the army and other defence services have to pass through one more rung—the brigadier-DIG level —before they are on par with a joint secretary. The commission's increment for DIG-level officers meant a grade pay of Rs 8,400—just Rs 100 more than an IAS director. The former protested and the grade salary was raised to Rs 8,900. This upset the joint secretaries, as their grade pay was Rs 9,000. The IAS lobby promptly raised it to Rs 10,000.

The cabinet mandated that the IAS has an edge over other services at only 3 middle levels, with 2 additional increments. But the new notification means that IAS officers get 4 additional increments, which continue throughout their career.

The manipulation of recommended pay structures doesn't end here. In a bizarre move, the slew of new pay notifications have also ensured that junior IAS officers get more money than their seniors in other services. For instance, a junior IAS officer drawing Rs 16,300 in the old pay structure will now get a gross of Rs 40,890 under the new scheme. But officers from other services, who were his seniors and were drawing a higher pay packet of Rs 16,400, will now get Rs 39,690.

The other services have also been crying foul at the way grade pays have been fixed for them, while keeping the IAS at an advantage. In representations to the Centre, other service associations have pointed out that their increments have been proportionately much lower than that of their IAS counterparts. While increments for other ranks have been higher, for the DIG/brigadier level the ratio has been kept at a measly 0.14. This has led to IAS officers at a lower level drawing more than DIGs and brigadiers.

Similarly, an IAS officer drawing Rs 15,100 today will now get Rs 39,690. But his counterpart in the other services, drawing the same salary, will now, inexplicably, get Rs 38,500. "It is not just about money," a police officer says. "Pay structure also decides seniority, perks and powers. By ensuring the superiority of one service at the cost of all other services, you are ensuring bad governance. This will mean that other services will remain subservient to the wishes of the IAS. Is that desirable in our framework of good governance or in view of the efforts that Prime Minister Manmohan Singh is making to bring about more professional delivery of governance in India?" he asks.

In the end, even as bureaucrats bestow increments and sops on themselves, can citizens expect better governance? All government employees associations have rejected a key recommendation made by the commission: to link twenty per cent of annual increment to performance. So, while the exchequer is drained at the expense of the common man, the babu has ensured that he will continue to reap benefits—even as he short-changes the government he is supposed to serve.

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Who is Afraid of the Truth in OROP?

 Why the Government Must Tell 125 Crore Indians

The Simple Truth about One Rank One Pension (OROP)

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"Satyameva Jayate" (Sanskrit: सत्यमेव जयते satyam-eva jayate; literally "Truth alone triumphs") is a mantra from the ancient Indian scripture Mundaka Upanishad. It was adopted as the national motto of independent India.

On 14^th August 2015, the Delhi police, which functions directly under the Central Govt, and the NDMC, by their action provided the much needed media exposure to the ESM agitation. It also united the other ‘sitting on the wall’ ESM organisations.

On 11^th September 2015, in Chandigarh, the PM, by those few words re-invigorated the reportedly ‘factionalised’ ESM into protesting with much more vigour. Proof is the attendance at ESM rally on 12^th September 2015 and the myriad photographs doing the rounds on social media. Most print media, with the exception of The Hindu, either blanked off or covered desultorily and the usually voluble TV channels did not cover the rally but also did not consider the impact of the social media.

The PM’s words achieved one aim. It may have been a political speech, as some retired BJP supporters amongst ESM said, or it was the PM’s anger at the continuing agitation by ESM in New Delhi or their statements about campaigning in Bihar, but the words reinforced the feeling that the Govt’s professed love and respect for the Jawan conceals disdain for ESM and widows of ESM.

But, all ESM, and their widows to a large extent, are a literate lot, and they ask many questions. They find answers to most questions on the Govt’s websites, but they ask more questions that only the Govt can answer. The ESM and widows ask

Do 125 crore Indians know what OROP really is and why it was being requested, and is now demanded?

Does it mean that two different Governments led by two different political parties, aided by a phalanx of bureaucrats misunderstand the reasons, the concept, the aim, and the implications – financial, administrative, and legal – of OROP?

If approving OROP was a desperate UPA’s electoral death throes, then what was the BJP’s repeated “committed to OROP” about?   

Do 125 crore Indians know how much the widow of a sepoy, or a Subedar Major or of a Brigadier draw as Family pension?

How has the Govt given away Rs 1, 23, 000 crore from the money of the poor (Rs 63, 000 crores as tax exemptions to rich corporates in 2014-15, Rs 20, 000 crores to offset losses of Public Sector Banks (PSB) by their bad loans of poor people’s money to offenders, and Rs 40, 000 crore of the poor to Foreign Portfolio Investors (FPI) in 2015-16),

If outgo of Rs 8300 crore or Rs 10, 000 crore or Rs 12, 000 crore for OROP will drive India into a Greece like situation, as some learned commentators, editors and retired bureaucrats predict, then what about the amount stated above?

Pension for Government’s Civilian Employees vis-à-vis ESM

Compare that with any retired Class B and IAS officer with equivalent years of service and the truth will be apparent from what is reproduced below: (source: http://www.pensionersportal.gov.in/retire-benefit.asp): -

The minimum eligibility period for receipt of pension is 10 years. A Central Government servant retiring in accordance with the Pension Rules is entitled to receive superannuation pension on completion of at least 10 years of qualifying service (see qualifying service for Defence Forces personnel above) [emphasis supplied].

Compare this with 15 years for ORs and 20 years for Officers of the Defence Forces to be eligible to draw pensions.

In the case of Family Pension for a Govt’s civilian employee the widow is eligible to receive pension on death of her spouse after completion of one year of continuous service or before even completion of one year if the Government servant had been examined by the appropriate Medical Authority and declared fit for Government service [emphasis supplied].

PCDA (Pension) states that a Family Pensioner of the Defence Forces (source: http://www.pcdapension.nic.in/gen/faq.htm), inter alia, states, “No family pension is admissible in cases where the ex-servicemen was not a pensioner on the date of his death.”

Corrected based on advice of Maj Navdeep Singh

Actually the requirement of family pension is exactly the same in the defence as well as the civil services. There is no requirement of minimum qualifying service for deaths in harness to earn an ordinary family pension. What you have done by mistake is, that you have compared an in-harness death of a civil employee on one hand with the death of a military pensioner on the other hand. If a person dies in-harness, then families are entitled to ordinary family pension without any linkage with qualifying service both on the civil as well as military side. If a person dies after release then family is entitled only if the individual had been a pensioner, again both in military as well as civil.

Also, the minimum qualifying service of 10 years is applicable under CCS (Pension) Rules, 1972 only when a person superannuates and in rare circumstances is released by the Govt on completing 10+ years of service. For example, if a person joins at 45 years of service and retires at 60 years after completing 15 years service, he/she is entitled to pension since he/she had completed more than 10 years. For other cases, including voluntary retirees, the length required for earning a pension remains 20 years on the civil side while it is 15 years in the military for jawans/JCOs and 20 years for officers.

Hope this explains the issues raised by 'Vicky' above too.

The widows (nearly 6 lakh) of ESM are near penury as they are paid just 30% of the last pay drawn by their husbands as family pensions. The family pension for a Group X (the highest paid) Sepoy’s widow is Rs 3672 + 113% Dearness Relief (DR) = Rs 7822 per month (Rs 260 per day) to Rs 6507 +113% DR = Rs 13859 per month (Rs 462 per day) for the widow of a Gp X Sub Maj who served 30 years but whose pension reached the top of the pension table at 28 years?

Compare the above with the MGNREGA daily wages for 2015-16 for unskilled, unemployed labourers for some States: -

Haryana – Rs 251; Chandigarh – Rs 239; Punjab – Rs 210; lowest Madhya Pradesh and Chattisgarh Rs 159.

(Complete text of F No. J-1011/1/2009-MGNREGA (Pt III) dated 31^st March 2015, at nrega.nic.in.)    

 

Widows of Lt Col, Colonel, Brigadier draw Rs 15759, Rs 16677 and Rs 17487 + 113% DR as family pensions, respectively.

The ESM amongst Officers cadre are no better – Lt Col’s pension Rs 21490 at 20 years of service, Colonel’s pension Rs 26265 at 26 years of service and Brigadier’s pension Rs 29145 at 30 years of service. It is all taxable and that is why they have to find employment outside.

(Source: Circular Nos. 501 & 547 for Other Ranks Pensioners and No. 500 & 548 for Officers’ Pensioners issued by PCDA (and updated on 11^th September 2015).

Defence Forces Pensioners are Income Tax Payees

Of the 30 lakh ESM pensioners, including family pensioners, a majority pay income tax, and many uninformed (sic?) trolls think defence pension is income-tax exempt.

ESM contributed part of the Rs 63, 000 crore tax exemption & incentives gifted to the corporate sector, and part of the first tranche of Rs 20, 000 to re-capitalise PSBs’ for the irrecoverable loans they handed out, and part of Rs 40,000 crore the Govt has exempted the FII from paying MAT, and the several hundred crore that is paid to Air India for Air India One’s flights and Rs 40 crore spent of the PM’s 15 trips abroad.

Or why the poor are being deprived to pay OROP of Rs 10, 000 crore to ESM but are not deprived when the Govt foregoes Revenue (taxes) of Rs 63000 crore, gives Rs 20000 crore to PSB and Rs 40000 crore FPI of the poor peoples’ money in 2015-16?

In this context it would be educative for all to read what Shri Uttam Gupta, a financial analyst, has written in the Deccan Herald, 14^th September 2015, in his comment titled Minimum Alternate Tax (MAT), Don’t Override the Judicial Process, inter alia, “After Justice Shah Committee recommended… He (FM) has also promised to come out with an amendment to Section 115J of the Finance Act to exempt all FPIs nt having permanent establishments in India from levy of MAT…….By giving these assurances the Narendra Modi Govt has not only gone back on the principle espoused by the Govt but also pre-empted the judicial process….”    

OROP Commitments and Implementation Issue

Then PM-candidate, by his now famed his oratorical flourishes, raised the forlorn hopes of ESM in Rewari in September 2013, and with his every subsequent assurances and statements of implementation of OROP, kept those hopes high.

Are 125 crore Indians aware of subsequent and recorded on file statements by the UPA’s Raksha Mantri (RM) and the Finance Minister (FM) that “Rs 500 crore was just a token amount and more would be forthcoming as soon as the amount could be worked out?” 

Those pre-election speeches might also have been the reason for the otherwise slow moving Defence Minister of the UPA to constitute a Joint Working Group (JWG), engrave the definition of OROP (equal pension for those with the same rank and same years of service and automatic future enhancements) in the pages of MoD’s files with alacrity, even haste, and set what now seems to be the OROP fireball on its way.  

Jean Paul Sartre said, “Commitment is not just a word. It is an act.” So, the newly formed NDA Govt had its chance of converting that commitment of OROP into fulfilling a promise in the Budget 2014-15.

Though 125 crore Indians, of whom 30 lakh are ESM and widows of ESM, may think that Budgets are made by the FM and his (sealed up in the North Block) bureaucrats, they are by norm, prepared in consultation with the Prime Minister. FM (also the RM till November 2014) must have been aware of the PM’s priorities when he framed the Budgets 2014-15 and 2015-16.

The Budgets for 2014-2015 & 2015-16 make it clear that Ex-Servicemen (ESM) were led up the commitment path till 5^th September 2015 by repeated announcements.

If the 125 crore Indians, the poor and income tax paying ESM & widows, do not believe it, they just need a cursory reading of Demand No. 22, available on the Ministry of Finance website [Source: Notes on Demands for Grants, 2015-2016, MoD, Demand No. 22, and Defence Pensions at indiabudget.nic.in/ub2015-16/eb/sbe22.pdf].

The extract of Demand No. 22 below shows that the FM did not project any demand for OROP and so FM (also the RM) made no provision in Revised Budget 2014-2015, in fact he deducted the Rs 1000 crore he grandly set aside for OROP: -

	Budget 2013-14	Budget 2014-15	Revised 2014-15	Budget 2015-16
Total (in crore rupees)	45493.75	50966.95	49959.79	54466.95

 Note: -1. Pensions and Other Retirement Benefits:. Defence Pensions provides for pensionary charges in respect of retired Defence personnel (including civilian employees) of three Services viz. Army, Navy and Air Force and also employees of Ordnance Factories, etc. It covers payment of service pensions, gratuity, family pension, disability pension, commuted value of pension and leave encashment. The increase in BE 2015-16 is mainly due to normal growth in pensionary benefits and increase in provision towards payment of Gratuity, Commuted Value of Pension and Superannuation and Retirement Benefits. Increase of higher provision is also due to increase in number of pensioners and anticipated provisions of Dearness Relief” (emphasis supplied).

The Note below the table in Demand No. 22 makes one realise the jumla as it shows a conspicuous absence of OROP in thought, word, or deed, in contradiction, if one needs it, to the repeated “assurances and commitment.”

        So, the FM (also RM from 27^th May 2014 to 8^th November 2014) did not even plan for the OROP in Budget 2015-16 and hence the misery of depriving the poor to pay the tax paying ESM & widows.

It took the UPA Govt that never works faster sixteen months to realise that it can pay the Class A Services to reward their incompetence with the Non-Functional Financial Upgradation (NFU), so that performance and promotion of one is presumed to be windfall for the others, even though 2 years later, non-performance notwithstanding! Funnily, no department, the ubiquitous Department of Expenditure included, is aware, in replies to RTI, of how much of the income tax paying ESM and widows and the poor people’s money goes towards that NFU.     

The truth is that in the OROP case, 16 months or so after May 2014, while the Govt gave away as revenue foregone an amount of Rs 62, 398 crores (see Annex 12 on MoF website for more details), the Govt made no realistic provision for OROP either in Budget 2014-15 (wherein the additional Rs 1000 crore earmarked for OROP was deducted in the revised budget when the FM was also the RM. The evidence is there on MoF website but extracted here for ready reference 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] (emphasis supplied).

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 (emphasis supplied), with Defence Secretary, Secretary (ESW), FA (DS) and CGDA on the implementation of OROP. The modalities are under consideration.                                                                Work in progress

[Source: http://indiabudget.nic.in/]

(Note: FM was also RM from 27^th May 2014 to 8^th November 2014).  

For 2015-16 the RM must have apprised the FM (who was the former RM) of the funds required for OROP.

Now that the Govt is to implement OROP, a process which will be complete when the implementation orders are issued, there is that bogey of the costs and “at the expense of the poor” that is being spoken about.  

Don’t the 125 crore Indians, deserve to be told why the demands of the ESM for OROP deserves so much of their Govt’s disdain?

ESM hope that the PM will tell the truth about OROP in his future speech(es) and uphold the national motto - Satyam Ev Jayate.

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Rumour Mills contradict the Nakara and Vains judgments

Equalisation OROP – Stop irresponsible rumours

Chain emails are doing the rounds spreading avoidable alarm and exposing gross ignorance and irresponsibility that there will be loss in OROP after the 7^th CPC recommendations are implemented “because the next equalisation will take place in Mar 2018.”

          Whoever wrote the email appears not to know of, or have read the Hon’ble Supreme Court’s orders in D. S. Nakara vs UoI and UoI vs Maj Gen S. P. S Vains (why else would it be termed gross ignorance).

This is not a legal treatise, so here are a few relevant passages from the judgments. Please read the complete judgments for more so that you may satisfy yourself and not get alarmed or add grist to the rumour mills: -  

D S Nakara Vs UoI by a 5 Judge Constitution Bench

                                                

"HEAD NOTE:

By a Memorandum dated May 25, 1979 (Exhibit P-1) the Government of India liberal the formula for computation of pension in respect of employees governed by the Central Civil Services (Pension) Rules, 1972 and made it applicable to employees retiring on or after March 31, 1979. By another Memorandum issued on September 23, 1979 (Exhibit P-2) it extended the same, subject to certain limitations, to the Armed Forces' personnel retiring on or after April 1, 1979. Petitioners 1 and 2 who had retired in the year 1972 from the Central Civil Service and the Armed Forces' service respectively, and petitioner No. 3, a registered society espousing the cause of pensioners all over the country, challenged the validity of the above two memoranda in so far as the liberalisation in computation of pension had been made applicable only to those retiring on or after the date specified and the benefit of liberalisation had been denied to all those who had retired earlier.

Counsel for petitioners contended that all pensioners entitled to receive pension under the relevant rules form a class irrespective of the dates of their retirement and there cannot be a mini-classification within this class; that the differential treatment accorded to those who had retired prior to the specified date is violative of Art. 14 as the choice of specified date is wholly arbitrary and the classification based on the fortuitous circumstance of retirement before or subsequent to the specified date is invalid; and that the scheme of liberalisation in computation of pension must be uniformly enforced with regard to all pensioners.

Counsel for respondents contended that a classification based on the date of retirement is valid for the purpose of granting pensionary benefits; that the specified date is an integral part of the scheme of liberalisation and the Government would never have enforced the scheme devoid of the date; that the doctrine of severability cannot be invoked to sever the specified date from the scheme as it would have the effect of enlarging the class of pensioners covered by the scheme and when the legislature has expressly defined the class to which the legislation applies it would be outside the judicial function to enlarge the class; that there is not a single case where the court has included some category within the scope of provisions of a law to maintain its constitutionality; that since the scheme of liberalisation has financial implications, the Court cannot make it retroactive; that if more persons divided the available cake the residue falling to the share of each, especially to the share of those who are not before the court would become far less and therefore no relief could be given to the petitioners that pension is always correlated to the date of retirement and the court cannot change the date of retirement and impose fresh commutation benefit which may burden the exchequer to the tune of Rs. 233 crores; and that the third petitioner has no locus standi in the case.

Allowing the petitions,

HELD: Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. It is attracted where equals are treated differently without any reasonable basis. The principle underlying the guarantee is that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Equal laws would have to be applied to all in the same situation and there should be no discrimination between one person and another if as regards the subject-matter of the legislation their position is substantially the same. Article 14 forbids class legislation but permits reasonable classification for the purpose of legislation. The classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group and that differentia must have a rational nexus to the object sought to be achieved by the statute in question. In other words, there ought to be causal connection between the basis of classification and the object of the statute. The doctrine of classification was evolved by the Court for the purpose of sustaining a legislation or State action designed to help weaker sections of the society. Legislative and executive action may accordingly be sustained by the court if the State satisfies the twin tests of reasonable classification and the rational principle correlated to the object sought to be achieved. A discriminatory action is liable to be struck down unless it can be shown by the Government that the departure was not arbitrary but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.

Xxxx          xxxx                     xxxx

(iii) Both the impugned memoranda do not spell out the raison d'etre for liberalising the pension formula. In the affidavit in opposition it is stated that the liberalisation was decided by the government in view of the persistent demand of the employees represented in the scheme of Joint Consultative Machinery. This would clearly imply that the pre-liberalised scheme did not provide adequate protection in old age, and that a further liberalisation was necessary as a measure of economic security. The government also took note of the fact that continuous upward movement of the cost of living index and diminishing purchasing power of rupee necessitated upward revision of pension. When the government favourably responded to the demand it thereby ipso facto conceded that there was a larger available national cake, part of which could be utilised for providing higher security to retiring employees. With this underlying intendment of liberalisation, it cannot be asserted that it was good enough only for those who would retire subsequent to the specified date but not for those who had already retired.

2. If removal of arbitrariness can be brought about by severing the mischievous portion, the discriminatory part ought to be removed retaining the beneficial portion. [198 F]

In the instant case, the petitioners do not challenge, but seek the benefit of the liberalised pension scheme. Their grievance is of the denial to them of the same by arbitrary introduction of words of limitation. There is nothing immutable about the choosing of an event as an eligibility criteria subsequent to a specified date. If the event is certain but its occurrence at a point of time is considered wholly irrelevant and arbitrarily selected having an undesirable effect of dividing a homogeneous class and of introducing discrimination the same can be easily severed and set aside. It is therefore just and proper that the words introducing the arbitrary fortuitous circumstance which are vulnerable as denying equality be severed and struck down. In Exhibit P-1 the words:

"That in respect of the Government servants who were in service on the 31st March, 1979 and retiring from service on or after that date.

And in Exhibit P-2, the words:

"the new rates of pension are effective from 1^st April 1979 and will be applicable to all service officers who became/become non-effective on or after that date" are unconstitutional and are struck down with the specification that the date mentioned therein will be relevant as being one from which the liberalised pension scheme becomes operative. Omitting the unconstitutional part it is declared that all pensioners governed by the 1972 Rules and Army Pension Regulations shall be entitled to pension as computed under the liberalised pension scheme from the specified date, irrespective of the date of retirement. Arrears of pension prior to the specified date as per fresh computation is not admissible"……………………………etc

UoI Vs Maj Gen S P S Vains

Xxxx                    xxxx                     xxxx

"24.    The said decision of the Central Government does not address the problem of a disparity having created within the same class so that two officers both retiring as Major Generals, one prior to 1.1.1996 and the other after 1.1.1996, would get two different amounts of pension. While the officers who retired prior to 1.1.1996 would now get the same pension as payable to a Brigadier on account of the stepping up of pension in keeping with the Fundamental Rules, the other set of Major Generals who retired after 1.1.1996 will get a higher amount of pension since they would be entitled to the benefit of the revision of pay scales after 1.1.1996.

25.    In our view, it would be arbitrary to allow such a situation to continue since the same also offends the provisions of Article 14 of the Constitution.

26.    The question regarding creation of different classes within the same cadre on the basis of the doctrine of intelligible differentia having nexus with the object to be achieved, has fallen for consideration at various intervals for the High Courts as well as this Court, over the years. The said question was taken up by a Constitution Bench in the case of D.S. Nakara (supra) where in no uncertain terms throughout the judgment it has been repeatedly observed that the date of retirement of an employee cannot form a valid criterion for classification, for if that is the criterion those who retired by the end of the month will form a class by themselves.

In the context of that case, which is similar to that of the instant case, it was held that Article 14 of the Constitution had been wholly violated, inasmuch as, the Pension Rules being statutory in character, the amended Rules, specifying a cut off date resulted in differential and discriminatory treatment of equals in the matter of commutation of pension. It was further observed that it would have a traumatic effect on those who retired just before that date. The division which classified pensioners into two classes was held to be artificial and arbitrary and not based on any rational principle and whatever principle, if there was any, had not only no nexus to the objects sought to be achieved by amending the Pension Rules, but was counter productive and ran counter to the very object of the pension scheme. It was ultimately held that the classification did not satisfy the test of Article 14 of the Constitution.

27. The Constitution Bench has discussed in detail the objects of granting pension and we need not, therefore, dilate any further on the said subject, but the decision in the aforesaid case has been consistently referred to in various subsequent judgments of this Court, to which we need not refer.

28. In fact, all the relevant judgments delivered on the subject prior to the decision of the Constitution Bench have been considered and dealt with in detail in the aforesaid case.

29. The directions ultimately given by the Constitution Bench in the said case in order to resolve the dispute which had arisen, is of relevance to resolve the dispute in this case also.

30. However, before we give such directions we must also observe that the submissions advanced on behalf of the Union of India cannot be accepted in view of the decision in D.S. Nakara's case (supra). The object sought to be achieved was not to create a class within a class, but to ensure that the benefits of pension were made available to all persons of the same class equally. To hold otherwise would cause violence to the provisions of Article 14 of the Constitution. It could not also have been the intention of the authorities to equate the pension payable to officers of two different ranks by resorting to the step up principle envisaged in the Fundamental Rules in a manner where the other officers belonging to the same cadre would be receiving a higher pension.

31. We, accordingly, dismiss the appeal and modify the order of the High Court by directing that the pay of all pensioners in the rank of Major General and its equivalent rank in the two other Wings of the Defence Services be notionally fixed at the rate given to similar officers of the same rank after the revision of pay scales with effect from 1.1.1996, and, thereafter, to compute their pensionary benefits on such basis with prospective effect from the date of filing of the writ petition and to pay them the difference within three months from date with interest at 10% per annum. The respondents will not be entitled to payment on account of increased pension from prior to the date of filing of the writ petition.

(emphasis supplied)

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Who Prepared the Brief for RM and Notes for the PM to Subvert Satyam Ev Jayate?

One Rank One Pension (OROP) – Satyam Ev jayate

(Will Truth Prevail?)

Some one who has the ears, eyes and trust, mark the word, trust, some where in the byzantine maze of South and North Blocks, must be laughing about the briefs prepared for the Raksha Mantri (RM) and Prime Minister (Pradhan Mantri, Pradhan Sevak and, of course, Pradhan Santri)  on OROP and recalling Thomas A Edison’s words, “I have not failed. I've just found 10,000 ways that won't work.” How else can the learned RM read out on OROP something prepared by ‘someone’ on 5^th and, more seriously, the notes for the PM’s ex-tempore public address on 6^th September 2015 contain factual errors (gaffe for us lesser Indians)?

OROP – The Origin

          The first fact those ‘some one’ did not disclose to the RM & also the PM is that the OROP issue first came to the conscious knowledge of the Public, the Governments, and Ex-Servicemen (ESM) not 68 years ago (in 1947), not 42 years ago (in 1973), but actually 35 years ago (in 1980-81) when the Estimates Committee on Resettlement of ESM noticed the disparity in pensions of pensioners of Armed Forces retiring in different Central Pay Commission (CPC) regimes.

Then a torturous process of righting the wrong started.

          In 1984, Shri K P Singh Deo, the MoS, MoD (Congress Government), chaired a High Level Empowered Committee, which recommended that the 4^th CPC should consider the matter in line with the principle of pensions of Judges of the High Courts and the Supreme Court. The 4^th CPC did not make any observation or recommendation.      

          It was followed in 1991 when a High Level Empowered Committee headed by then RM (Congress Govt) Shri Sharad Pawar did not recommend OROP but recommended a one time increase for ORs, JCOs, Honorary Commissioned Officers, and Officers below the rank of Colonels and equivalents.

          In 1994-97, the 5^th CPC considered OROP but did not recommend it but the CPC did recommend full parity for personnel who had retired before 1986 and notional parity for those who retired after 1986.

          It was followed by, in 2003 when the first BJP Govt constituted an Inter-Ministerial Committee, serviced by Deptt of Pensions and Pensioners Welfare (DP & PW). The Committee submitted its report in Sep 2004 (UPA-I Govt) but the Ministry of Finance rejected (déjà vu?) it stating that it was not in consonance with the 5^th CPC recommendations and termed it as “a side door entry” for OROP.

          From 2005 to 2011, OROP was rejected by or not decided upon by different Ministries and Committees of Secretaries till on 19^th December 2011, the Bhagat Singh Koshiyari Committee recommended OROP and even defined OROP.      

          After the Koshiyari Committee came the Prime Minister constituted Cabinet Secretary  Committee in July 2012, which submitted its report in August 2012 that OROP is not viable, financially, administratively or legally and recommended passing the OROP baby and the hot water to the 7^th Central Pay Commission to consider it “holistically.”

          However, perhaps driven by the oratory of the PM-Candidate and the frenzy that ensued, the UPA Govt declared its intent of implemented OROP in the Interim Budget 2014-15.     

Assessment by the Koshiyari Committee and…..

          Let us now walk across the figures that ubiquitous ‘some one’ supplied to the Prime Minister, which he mentioned in his speech on 6^th September 2015.      

The estimated financial impact of implementing OROP was estimated by the Koshiyari Committee was Rs 1300 crore if implemented in 2011-12 (Para 11 of the Report) and not Rs 300 crore. The Koshiyari Committee recommended Rs 1300 crore in 2011-12, and the breakdown as Rs 1065 crore for PBOR pensioners and Rs 235 crore for officer pensioners. The Committee also estimated that outlay for OROP would increase at 10% annually , so contrary to what the esteemed FM states, the annual increase is not the figment of greedy imaginations of ESM but a fact recommended by a Parliamentary Committee.

In Para 11.1, the Committee noted and recorded “it is heartening to note that the Govt has ….spent Rs 2200 crore for the purpose of meeting the grievance of defence pensioners. The net result is that while the demand for OROP stands almost met in the case of PBOR, the officers’ category remains much behind the target…” This also substantiates the enhancement/improvement in pensions on 17^th January 2013!

A prior reading of the observations by the Committee at Para 11 would have been very illuminating for those who prepared the notes for the PM, the RM and, those Cassandras who advance the bogey of others demanding OROP or India facing a problem like Greece. But that Greece bit is for another day.

…..Only Rs 500 crore set aside by the UPA

The third fact omitted by that ubiquitous ‘some one’ is that speeches and pitch of the ‘candidate for PM’ starting from September 2013, might have compelled the UPA Govt to open the OROP box by including it in the Interim Budget statement on the floor of Lok Sabha on 17^th February 2014, and setting aside Rs 500 crore Interim Budget 2014-15.

Omitted from the notes for the PM was the truth that UPA’s Defence Minister and the Finance Minister (FM) stated that “Rs 500 crore was just a token amount and more would be forthcoming as soon as the amount could be worked out.”

This also was reiterated by then Defence Minister in his letter to Shri Rajeev Chandrasekar vide MoD ID No. 12(1)/2014-D (Pen/Pol) dated 26^th February 2014.

            It appears that the Prime Minister was not informed/reminded  by that ‘some one’ that Shri Jaitley, our learned FM in the NDA/BJP Govt, went one better, setting aside an additional Rs 1000 crore for OROP and the reading of the Budget (indiabudget.nic.in/ub2015-16/eb/sbe22.pdf). May be the Gujarat cadre loaded PMO did not understand the Dilli durbar to ask relevant questions when preparing notes for the PM’s speech of 6^th September 2015.

            Or, may be, the revelation would have taken the sheen off UPA bashing!

Definition of OROP & Methodology for implementation

Curiously, the ID of 26^th February 2014 also contained the definition of OROP. This definition was reproduced verbatim by the RM in his preface to the “Yes, we have given OROP” speech on 5^th September 2015.

To take the OROP forward, Shri A K Antony constituted a Joint Working Group (JWG) about two months (24^th April 2014 to be exact) after the announcement in the Interim Budget 2014, even beseeching the CGDA to be “considerate.”

The chairperson of the JWG was then CGDA, later promoted to Secretary & Financial Adviser in the MoD. Members of the JWG were from the MoD’s Deptt of Ex-Servicemen Welfare, Defence/Finance, and representatives from Service HQ (Chairmen of the Army, Navy and Air Force Pay Commission Cells and a few officers). But there was no representation from ESM organisations, though they could be consulted if Service HQ so decided, as stated in the ibid ID.

The first meeting of the JWG was convened on 2^nd May 2014 in the office of the CGDA, recorded by the O/o CGDA that “As future enhancements have to be automatically passed on to the pensioners, Services proposal for incremental increase in pension on 1^st July every year shall be considered.”

Chairman of Pay & Remuneration Committee (PARC) and also Chairman, Naval Pay Commission cell, being the senior-most from the Services at that meeting, scored out, repeat scored out the words incremental increase in pension on 1^st July every year, shall” and substituted with “annual revision of OROP tables should be considered.”    

In his Action Taken report (on the Budget of 2014-15) and in the Budget speech of 28^th February 2015, Shri Jaitley reported having held a meeting with the Defence Secretary, Secretary (ESW), Secretary (Defence/Finance), and CGDA on the implementation of OROP on 26^th August 2014. He added, “The modalities are under consideration” (source: indiabudget.nic.in). Curiously again, neither the Services HQ nor the ESM were part of the confabulations. They could have contributed facts and figures that now place the Government in a different light than “I love the Army men, so….” oratory.   

A dispassionate but intelligent perusal of calculations by Service HQ would have shown that up to the rank of Major (and equivalents) that are in service will have lower pay in April 2014 than, say, April 2007. Similarly, in higher ranks there is no guarantee that a Colonel with 28 years service in Apr 2014 will draw a lower pay and pension than a Colonel in the 28^th year completed in Apr 2015 or Apr 2016, simply due to the fact of higher fixation to the 2014 retiree in January 2006.

  Why the Annual Revision of OROP tables

          A perusal of the Koshiyari Committee Report brings out some aspects that will give a more rounded, and less strident, demand and rejection of the Annual or even a Bi-Annual Revision.

At Para 6.4 of the Report, the Army’s representative agrees that a 5 yearly review is agreeable. At Para 6.5 of the Report the Air Force’s representative concurs with this 5 yearly review. At Para 6.6 of the Report, the Navy’s representative is silent.

At Para 7 of the Report one will see a more comprehensive statement from the Deptt of Expenditure (MoF).

The DoE places the initial estimate in 2011-12 at Rs 1300 crore and projects a 10% annual increase to Rs 1430 crore in 2012-13, Rs 1573 crore in 2013-14, Rs 1730 crore in 2014-15, Rs 1903 crore in 2015-16 and a 25% increase to Rs 2379 crore in 2016-17 due to the 7^th Pay Commission’s recommendations.

At Para 8 the DP & PW  projects the demands from others but is silent on the estimate while the Cabinet Secretariat projects an amount of Rs 8000 crore to Rs 9000 crore.

         

In fact most cells in the OROP tables in the Draft Government Letter (DGL) prepared by Service HQ in April 2014 would not have changed every year except for cases like the following: -

Firstly, Col/Nb Sub/Hav ‘A’, with 30 years service, whose birth date is 15 June will retire on 30^th June 2015 and be denied an increment of 3% which falls due on 1^st July every year. Col/Nb Sub/Hav ‘B’, also with 30 years service, but whose birth date is 7^th July will retire on 31^st July 2015 and get an increment of 3% and therefore a higher pension.

Shouldn’t Col/Nb Sub/Hav ‘A’ also get the same pension as Col/Nb Sub/Hav ‘B’, both having served for 30 years and retired just a month apart in year 2015? It will not happen to others who might retire after 1^st July 2015 because they will be in receipt of the increment.

Secondly, on 16^th December 2004, the Ajai Vikram Singh Committee recommendations were implemented and time frames for promotions up to the rank of Colonel were reduced drastically. But there were promotees with 18 years of service who were promoted to rank of Major or Lt Col before 15^th December 2004. Their pensions will be to be rationalised because an officer with lesser number of years of service cannot, by the Govt’s Fundamental Rules, draw more pay than an officer with higher years of service. This is also the crux of the Apex Court’s judgment in Maj Gen S P S Vains (retd) Vs UoI.

Thirdly, a sepoy is paid Rs 7065 as pension if he has service between 20 and 27 years. But a sepoy who serves 27.5 years (a rarity) is paid a pension of Rs 7175. Shouldn’t the pension tables be rationalised so that all with 27 years of service draw the same pension and the next slab should be at 28 years instead of the half year?

          What would be the financial effect? Would we have a Greece like situation as some trolls, and even a learned managing editor of a financial periodical state?

The financial effect was calculated to be about Rs 185 crore in the first year and would reduce every subsequent year because all pensioners would reach the top of the pension table in 5 years, if the 7^th CPC did not change the methodology!   

Any one with the Higher Secondary School standard of knowledge of computers would have correctly briefed the Defence Minister (an IIT alumni) and the PM who has dealt with many a budget in his 12 years as CM of Gujarat.

And the VRS Issue

          This aspect was never discussed openly nor disclosed (for a Govt that maintains transparency as one of its virtues). Any knowledgeable persons amongst 125 crore Indians, let alone the RM, would be chagrined that the Armed Forces do not have VRS i.e a Golden Handshake where a lump sum is given and matter is closed.

The some one who prepared the brief/notes would have been more anxious that the RM & PM should not be told about nor read the Defence Services Regulations 2008, Army Pensions Rules – 2008, for only then, in an otherwise moment of generosity, the RM let Mr Scrooge prevail by denying OROP to those personnel (about 40% to 50%) who have opted out on PR from Service.

Defence Services Regulations, Army Pension Rules, Chapter VII, Section 5 define the types of pensions (pensions on PR are not mentioned) and Section 9 gives the legal status for withholding, suspending or discontinuing pensions. It can only be because, while in service the Serviceman committed an act construed as waging war against the Government of India or of a conspiracy to wage war against the Government of India and punishable under Section 121 of the IPC.

Didn’t the Chiefs or the Defence Secretary, who had places at the high table, know? Or just like on 26^th August 2014, the Chiefs were kept in the dark till that dark hour of 3 pm on 05 Sep 2015

Finally, if the PR personnel are denied OROP, then the Prime Minister would deny OROP to between 40% and 50% of ESM and to many whose wives would be widowed in subsequent years.

By denying OROP to PR personnel, the financial impact, first time and subsequent, will be half of Rs 8300 crore or Rs 10000 crore or Rs 12000 crore.

In Conclusion

In conclusion the Prime Minister has kept his word to implement OROP. But some one in his Government has found the myriad ways to ensure OROP as defined by the Koshiyari Committee and approved by Parliament in March 2014 and July 2015 will not work.

Therefore, it is difficult not to recall the words of Thomas A. Edison, “I have not failed. I've just found 10,000 ways that won't work.” Will those words be carved on the tombstone of this Government’s commitment to OROP?

Satyam Ev Jayate?