Wednesday, June 7, 2023
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Veterans must know that rising defence pension bill needs to be tamed for military’s own good

Modi govt needs to come out with a new National Pension Scheme for India's armed forces to give them extra in comparison to the civilian workforce.

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The Department of Military Affairs headed by Chief of Defence Staff Gen. Bipin Rawat is working on a new proposal to increase the retirement age of officers, besides Junior Commissioned Officers and Other Ranks from selected streams. Gen. Rawat is also proposing a new pension policy for those taking Pre-Mature Release (PMR), which seeks to dissuade officers from leaving the force in their prime.

His move has drawn a sharp reaction from serving officers and the veterans.

Majority of those who take PMR are from specialised fields who have been trained on the job. They end up leaving the force and taking up jobs in the private sector, which is actually a loss for the Services — Army, Navy or Air Force — that invest heavily in them.

However this does not mean that one changes the rule of the game suddenly. I don’t see a reason why the Army would want to forcibly keep someone against his/her wish. Most of those who take PMR are those whose career is not progressing in the pyramidal structure of promotion in the armed forces or are disgruntled.

Rather than forcing them to stay back, the Services should work on ensuring that it remains attractive for them to stay on.

The real aim of Gen. Rawat, however, is to ensure that the pension bill of the armed forces is reduced. Whatever one may say about Gen. Rawat’s way of functioning and his proposal, the truth is that the booming defence pension bill harms the military capability and it needs to be tamed.

Also read: Don’t criticise CDS, service chiefs for integrity pledge. Accept corruption in armed forces

Steady rise in pension bills

Out of a total outlay of Rs 30.42 lakh crore in Union Budget 2020-21, Rs 4.71 lakh crore has been earmarked for defence, including pensions. This defence budget hence is about 15.5 per cent of the central government’s entire expenditure plan.

The fine print is a shocker. In the ongoing budget, the pensions, one of the biggest expenditure components of the defence ministry, stands at a whopping Rs 1.33 lakh crore — 13.6 per cent more from the revised estimates of Rs 1.17 lakh crore.

What is even more troubling is that the increase is higher than the hike given in revenue (which takes care of daily expenditure and salaries) and capital funds (modernisation and acquisition) for the forces.

And financial crunch is something that affects the capability of the armed forces. The Navy has been forced to scale back its plans of becoming a 200-ship strong force by 2027 because of a monetary crunch. It’s now aiming to be a 175-ship force. This comes at a time when China is investing heavily on its naval arm.

Even the IAF and the Army are feeling the pinch. The IAF needs new fighters to transport planes and mid-air refuellers, but has been forced to go slow due to cash crunch.

Research scholar Gary J. Schmitt, in his book A Hard Look at Hard Power, published by the US Army War College, writes that an “underperforming economy and the budgetary constraints have limited the Indian military’s expansionist capability”.

He also noted that the crisis afflicting Indian defence spending is mainly because the resources available for modernisation are being crowded out almost entirely by the “revenue expenditure” — costs that neither create assets nor reduce the government’s liabilities.

He added that almost 60 per cent of the defence budget is eaten up by pay and pensions, a testament to the steady increase in size of India’s personnel under arms over the last three decades — during which the 10 biggest defence spenders have done exactly the opposite.

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Armed forces and the NPS

The New Pension Scheme (NPS) was introduced for all central government employees — from the IAS and the IPS to the lower clerical staff — in 2004. But the armed forces personnel were kept out of the scheme.

This was because the working condition of the armed forces personnel was different from the civilian workforce of the government. And hence they cannot be clubbed together.

However, the central armed police forces’ (CAPFs) personnel were included in the NPS, even when their work is way different from their civilian counterparts and they get postings in extreme terrain and climatic conditions.

The whole idea of the NPS, which is self contributory, was to bring down the pension cost of the government. And this is also the way forward to bring down the defence pension cost.

The Narendra Modi government needs to come out with a new National Pension Scheme for the armed forces, which gives them extra in comparison to the civilian workforce.

Lt Gen Prakash Menon and researcher Pranay Kotasthane have argued that moving incoming defence personnel to the NPS is perhaps a long-term solution to the rising defence pension bill. But they also say it is a myth that this shift is possible under the current political circumstances.

In fact, the political feasibility of such a move is extremely low, they say. However, this is where the government needs to step in and take some hard decisions.

Also read: IPS Abhinav Kumar’s allegations baseless. CAPF cadre officers fighting an existential battle

Lateral entry into CAPFs

Another way to cut down pension costs is to ensure that lateral entry of the armed forces personnel needs to be ensured into the CAPFs, but not at the cost of the already slow-moving career of cadre officers.

Also, the government should try and bring in more defence personnel into government jobs. And once they are accommodated into a central government job, the pension should start only when they retire from the new job. Of course, the difference between the last salary drawn and the new one should be given as pension in case it is less.

In cases such as the Defence Security Corps (DSC), the personnel get a pension from even the new organisation after serving a minimum tenure as well as the earlier Service, thus drawing two pensions. This should be streamlined as well.

I am sure there are many ways to cut down pension costs. The Modi government and the armed forces need to come together and take some bitter decisions, which will work in the military’s favour in the longer run.

Views are personal. 

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  1. From the write up above, I get a feeling that defence of India is the responsibility of defence forces personnel alone. Others in the country are freeloaders. This country spends money in training the said personnel and does not screw the tax payers on educating other Indians. IIsT, medical colleges, other education, training of Babu’s and thieves in different garbs does not cost the exchequer. Others can train and enjoy at the cost of the country, resign within any period after training as per their choice and even get back into the service long after resignation has been accepted. But poor soldiers, there is only goolami for them. They can’t speak, they can’t protest even if you deny him food, give him no chhutti for mourning deaths of his parents, you deny him meagre allowance even when he braves snow in high altitude areas, you make him pay for his life insurance, make his life so difficult that he is , manytimes, forced to commit suicide or fratricide.
    Why should I think for such ungrateful citizen who is leaving no stone unturned to snatch the soldiers’ food from his mouth? I have decided not to permit any of my children to join defence forces for such ungratefuls. They must join these freeloaders. Let others too fight for the defence of the country.

  2. Why to argue on pension bill. Why don’t u implement a compulsory tenure of 5 yrs in defence to get a job in any sector. U will find that the manpower crunch and pension bill is tamed. And after serving 5 yrs in defence every youngster will come to know the value of life, value of money, value of humanity. And every sector they join will be benefitted by their approach towards the sector, their sense of humour, their nature of work, their punctuality, their sense of belonging ness, their cooperative mentality and many more good etiquette. So think about it. Economy will boost automatically in this way. And yes one thing should not be underestimated, that any type of Misutilising their quality will lead to a disaster to that firm and also a dangerous outcome. They have one goal. Be happy and let others to be happy. Not to be welthy and let others to creep. Because there is no limit to happiness but thr is a limit to wealth.

  3. This is witch hunting for people who are dying for you. Ask for money galloped by PMCARES Fund biggest scam.. remove the pensions of politicians and bureaucrats..
    My Puppet Singh Rawat.. wont dare not touch them

  4. No one forced you people to join the armed forces. Why always crib at any suggestion which tries to economise. There are millions in this country who slog all their lives in the private sector companies, pay their taxes but do not have any pension or post retirement benefit.

    • when the these ppl joined the forces 3 decades back.. they agreed on a term. they have given away their youth. they never lived a life with family.. served for peanuts at God foresaken places… they paid taxes.. they paid for everything they received (from ration.. to c-19 gears. that u civilians think is free). Now at the age of 50.. when they are exhausted and have no stamina left due to difficult terrains that take a toll on their health you would want them to stay away from their homes and slog. This is the price a patriot who survives gets!!

      Shameful for India..

      By the way Mr. Das.. did u get through the selection process for forces urself? Do u have anyone in your family who has been a veteran.. dont dare compare ur corporate lives with this noble profession. Let army retire from this country.. each citizen protect urself and ur homes..

    • Dear Mr das I presume you got kicked out of the selection process of SSB so I don’t mind ur vengeful words. I am sure u do not even pay a penny as income tax to the govt , for your info all army personals pay and it’s cut from their salary . So contribution of army in terms of protecting the integrity of the nation is one and it also contributes largely to the treasury through income tax and remember mr das it is you who is incompetent who could not serve the nation by joining the army and is working in a corporate Pvt sector and it’s your will and ur professionalism to go up and earn good amount of money no body is stopping you to go abroad and earn in dollars and I believe when u even join Pvt sectors you do sign a contract and terms and conditions same is with the army for pension and now the govt can’t change the terms and conditions of pension. For certain people like you mr Das who has never been to far flung areas of North East and Kashmir your knowledge of the army is limited to the size of your brain which is peanut and exactly the same reason that people like you should not be taken seriously .

    • Mr Das, the day army leaves the borders, on that very day your wife and sister will be raped in front of you. And you won’t be able to do anything.

    • Let us see if you can stand reduction in your pension to 50% . You want somebody to die for you and then you will cut his earned pension also. Perhaps none of your family has ever served in armed forces. Are you a politicians son who get three or four pensions.

  5. So long as we not tax the AGRICULTURAL INCOME we are wasting our time in arguing about everything else
    The people with AGRICULTURAL INCOME do not even want to file a return forget about paying tax on it.
    Everyone making money on the side shows it as AGRICULTURAL INCOME a perfect LAUNDRY.

    • Yes, fully agree with you. Akbar and Cornwallis managed our economy much better than any of the governments that came after 1947.

  6. Sure, and in the same breath, the Armed Forces need to be disbanded to enable the Politicians, Bureacurats, Judges and Police to give themselve fatter salaries, perquisites, bribes and even more subordinates. A geriatric army is best for defense.

  7. 👆a few observations on the rising pension bills and army not having money for any equipment
    1) has anyone asked and compared the pension outflow of other government departments like railways which by the way is the largest employer?or CAPFs?
    2) has anyone checked the affect of grant of NFU on the pension bills of every other government ministry?NFU ensures that the government employees get to the pay scale of Maj Gen at a minimum and thus retire with corresponding pension..
    3) while accepting civil services and CAPFs don’t have pension without batting ab eyelid,has anyone thought about the fact that New Pension Scheme is applicable for only those jointing after 2004?this means that every civilian employee including CAPFs are getting normal pension (enhanced due to NFU and 60 years of service )and will continue to do so..
    4) while clamouring for reduction in pension for fauj,did anyone try to understand that the savings from the much feted NPS will only accrue after 2035 and beyond ??
    5) fauj is asked to take a pay cut to pay for equipment..why not ask railway to follow suit to buy trains?or doctors to fight COVID??

  8. The reduction of pensions for PMR cases and increase of age isn’t going to decrease the pension bill in fact if calculated diligently it will end up increasing the pension bill. Secondly pensions of civil defense employees is much more than the soldiers which needs to be reduced

  9. The writer is stupid and he should ask for income tax on politicians and what about other central govt employees getting NFU you should give these points to save money from MOD.
    Dont do witch hunting for people who are dying for you.Ask for money galloped by PMCARES Fund biggest scam

  10. If views are personal then keep them in your head. Do not give half knowledge on news page. Almost half of the pay and pension goes to defence civilians, who all are not coming under this change in pension. When ever a benefit is given they are included but not when something is taken. This is because Indian defence forces are not allowed to make associations or unions. Incase of defence civilians, IAS lobby or other government employees the amount of pays and pension burden are much more, but they can’t be mingled as they are the vote bank. And without IAS and other bureaucrats government can not function. But they can function if few soldiers are killed by China or Pakistan as there death is not affecting Delhi. The number of soldiers are high but the expenditure is less as compared to other government organisations. Please get your facts checked first.

  11. Ex-MPs can take pension even if they get benefits as ex-MLAs or ex-MLCs even if they serve for one term each ie 10 years.. That should be slashed first.. Also the lion’s share of defence pension goes to Civilian Defence employees.. Kindly check.

  12. NPS is not completely ‘Self Contributory’ . While the employee contributes 15 % of his monthly salary, the government contributes similar matching amount to it. It means that the government pays 50 % of the NPS. The employee chips in only 50 % of NPS and not 100 % as the author implies

  13. The term ‘Defence Pension’ is misleading as it also includes the pension for large number of civilian employees of the Ministry of Defence who by the sheer virtue of their higher age of retirement of 58 years draw proportionately more pension than the military personnel.

    While comparing Army and Central Armed Police Forces (CAPFs) the author has ignored the main fact that personnel in CAPFs retire at 57 years onwards, where as most of personnel in military are made to retire at the age between 33 to 38 yeras due to the physically strenous requiremnts of their work.. The military has to be kept young to win a war.. India has a large Army because of our vast mountainous borders with Pakistan and China where the requierment of soldiers to man and protect the borders is very high.

    Various committees including Kargil Review Committee and several Pay Commissions have advised the government to laterally absorb the well trained and disciplined retiring military personnel in CAPFs or other government deptts. But there is a great resistance to it from these organisations..

    About NPS, civilian employees generally serve for about 35 years or more and are thus able to build a sizeable amount in their NPS accounts, Military personnel who serve for about 15 to 20 years only (almost half of their civilian counterparts) will be able to have only a very small amount deposited in their NPS accounts if applied for them.

  14. Snehesh,
    I have been following you for a while now. You are good at what are you are doing.
    I will be brief. I am not complaining but putting out some facts.Conditions of service have not been what it should have been as promised. As an example, in my married life, during my service, I have stayed in a proper house during my peace time tenures for only 30% of the time. By the time a family accommodation was allotted to me I was already in the third third on my tenure. Conditions of lower rank soldiers was worse. But we took it all in our stride. Pension is a motivating factor.
    While the pension of all Central Government employees comes from the central pool (not budgeted) Defence pensions form part of the Defence Budget. Some statistics may have missed your analysis. Only 55% of Defence pension outlay goes to 78% of Armed Forces Veterans (ESM under MOD). 45% of Defence pension’s outlay is consumed by 22% of Defence Civilians under MOD. You may want to check this out and clarify.
    A soldier including a veteran will be the first person who will always be willing to serve the Nation even in adverse conditions, as they have been, are and will do, whatever.
    Can all this be handled better? The issue is much beyond soaps and shampoos. It concerns a state of mind.

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