Defence pension jumps 13.6% in Budget 2020, but overall allocation rises just 3%

The total defence budget, including pensions, stands at Rs 4.71 lakh crore. Pensions constitute 28% of the defence ministry’s overall expenditure.

Indian soldiers (Representational image) | Commons

New Delhi: The allocation for defence pension has shot up by a significant 13.6 per cent to Rs 1.33 lakh crore in the Union Budget 2020-21, even though the overall capital budget allocation for the armed forces has seen a marginal increase of just 3 per cent, or Rs 3,400 crore.

The total defence budget this financial year, including pensions, stands at Rs 4.71 lakh crore. Excluding pensions, the defence budget has just increased by 1.82 per cent. The capital outlay for the Army has increased 10.3 per cent, while that for the Navy has risen 2 per cent. The outlay for the Indian Air Force, meanwhile, has decreased by 2.3 per cent.

Defence pensions, including those for civil employees of the defence ministry, are higher than the pay and allowances for the services, which stand at Rs 1.17 lakh crore. Pensions constitute 28 per cent of the overall expenditure of the defence ministry, even higher than the Rs 1.13 lakh crore earmarked for new acquisitions and modernisation of the armed forces.

The Army is the most manpower-intensive service of the three with a strength of 13 lakh personnel, and the pension allocation for it is Rs 1.13 lakh crore. For the Indian Air Force and the Navy, the figures stand at Rs 0.13 lakh crore and Rs 0.072 lakh crore respectively.

A matter of concern

Budget documents show that the increase in defence pension is largely because of an increase in pensioners and an impact of dearness relief.

A senior defence officer told ThePrint the services are aware of the burgeoning pensions, and have been looking for plausible solutions.

“We are aware of the problem, but it is difficult to cut down on defence pensions, as they are a factor in motivating defence personnel to serve in difficult conditions,” the officer said.

Calling the increasing defence pension a big concern, another senior officer said that the Army, in particular, has been contemplating ways to optimise engagement of its personnel by increasing the number of service years.

“Instead of taking any drastic measures, the feasibility of increasing the retirement age of soldiers is being studied. This could go a long way in reducing the pensions burden,” the second officer said, adding that increasing the retirement age of non-combatants by a few years is also under discussion.