Tuesday, 9 August 2016

Who really governs India? Part - I

(From my Memoirs)

(Photo downloaded from internet)

Who really governs India? Part - I

It is lower bureaucracy when higher bureaucracy and politicians have no stakes

A case study: One rank One Pension  

Imagine an army Jawan who is posted at Indo-Pak border to India. Till December 31, 2015, the last day of his service in the army, he is facing mortar attacks  to defend India. Next month, in January 2016, he joins a group of ex-servicemen, from Jawans to Generals, on hunger strike at Jantar Mantar, New Delhi, requesting the government to grant one rank, one pension (OROP) because with the implementation of the recommendations of the Seventh Central Pay Commission (CPC), his pension would be very much less than the pension of his colleague in the same rank who retires in January, 2016. (1.1.2016 is the likely date of the implementation of the recommendations of the Seventh CPC.)

The scenario may sound dramatic but is not far from the truth unless mistakes committed in the past are rectified.

In his address to the nation on August 15, 2015, Prime Minister Modi said: “It has been struck for 20 years… OROP was considered by all governments, but there is no resolution yet. Even I have not been able to solve it.” Naturally, he could not give a date on which implementation would be announced but assured that the government has accepted the concept ‘in principle’. It seems the PM has not been briefed properly by his bureaucrats. The problem has been there for more than 40 years.

A day earlier, Rahul Gandhi, ‘expert’ on every subject (albeit without any knowledge) by virtue of being a scion of the ex-ruling dynasty and daily in search of some issue or even non-issue to attack the present government, had asked the PM to give a definite date by which OROP would be implemented. During her recent speech in the Lok Sabha on ‘Lalitgate’, Mrs Sushma Swaraj had rightly advised Rahul to read history of his family. If he does so, he would learn that the ‘mother’ of this problem is none other than his own grandmother (assuming the family history has been recorded honesty). 

For those not very much familiar with the issue, here is a brief account.

OROP means ‘one pension for all retirees from the same rank, irrespective of the length of service’. When retirees over a period of time are considered, it means ‘one pension for all retirees from the same rank, not only irrespective of the length of service but also irrespective of the date of retirement’. The benefit was available to the retirees of the Indian armed forces till December 1972. It was disturbed by the Third Central Pay Commission (CPC) in 1973, apparently in a bid to apply the same set of rules to the retirees of the armed forces which were applicable to the civilian retirees. Without realising the seriousness of implications of deviation from the age-old rule in the armed forces, the then Prime Minister Indira Gandhi announced the termination of OROP for the armed forces. This was a cruel jolt to the soldiers so soon after they had shown great bravery in the Bangladesh war. Since then, the retirees of the armed forces have been feeling agitated and demanding restoration of the original rule.  Briefly, one who retired in, say, 1990 gets much pension than one who retired in, say, 2010 because the pay scale in 1990 was much lower than the pay scale in 2010 for the same rank.  

Between 1973 and today, several suggestions were made to reduce the grievances and a few ad hoc measures were also taken. However, post-Sixth CPC the gap between the pre-1.1. 2006 and post-1. 1. 2006 retirees widened substantially and the old retirees became more agitated.

The Estimates Committee (1980-81) considered the disparity in pension between past and present pensioners of equal rank inequitable and recommended its end. Not only was this recommendation ignored, the Fourth CPC (June,1986) added to the woes of past retirees by stating that ‘the amount of pension undergoes change as and when pay scales are revised and any attempt to equalise pension with reference to the revised pay scales of pay would amount to retrospective application of pay scales.’ In 1991, a High-Level Empowered Committee headed by the then Defence Minister admitted that the terms and conditions of  service of the armed forces personnel being distinct, they needed a special dispensation but did not accept the demand of OROP. On the basis of the recommendations of the Committee, the government granted one-time increase to give same pension to all pre-1.1. 1973 retirees and post-1.1. 1973 retirees. The Fifth CPC recommended total parity between pre-1.1. 1986 and post-1.1. 1986 retirees by notional fixation of pay in post-1.1. 1986 scale of pay but recommended against parity between pre-1.1. 1996 and post-1.1. 1996 retirees. Instead, for the pre-1.1. 1996 retirees the CPC recommended a fitment formula whereby the pension of a pre-1.1. 1996 retiree would not be less than the minimum pension prescribed for the same rank.  

The Sixth CPC (2008) maintained the ‘modified parity’ parity. While the post-1.1.2006  retires got pension on the basis of substantially revised pay scales, for pre-1.1.2006 retirees a fitment formula was prescribed with a saving clause that ‘the revised pension, in no case, shall be lower than 50% of the sum of the minimum of the pay in the pay band and the grade pay thereon corresponding to the pre-revised pay scale from which the pensioner had retired.’ Of course every retiree gets full neutralization of price rise in form of dearness allowance.

Due to significant upward revision of pay-scale, post-Sixth CPC the difference in pension received by pre-1.1.2006 retirees and post-1.1.2006 retirees of the same rank became substantial. For example, according to a national daily ‘a soldier with 17 years of service who retired before 2006 gets Rs. 7605/- less than a soldier who retired in 2014 and a Major General who retired with 33 years of service who retired before 2006 gets Rs. 30,000/- less than a soldier who retired in 2014.  

In 2011, an all-party Parliamentary Committee, known as Koshiyari Committee, unanimously found ‘merit in the demand for OROP and strongly recommended its implementation in the defence forces across the board at the earliest. It even recommended formation of a separate commission to determine the future retirement benefits. Reportedly, the Defence Ministry had advised the Committee against such a recommendation. The UPA government did not take any action.

The Fifth and Sixth CPCs as well as the Koshiyari Committee suggested lateral transfer of servicemen, after a certain length of service, to the paramilitary forces to minimise the financial burden. This practice is followed in several countries. It will reduce annual recruitment to the paramilitary forces but there will be corresponding increase in recruitment to the army, thus giving good opportunity to the young men to serve the army during the prime of youth and then come to the paramilitary forces were retirement age is 60.

There is no information whether the UPA government worked or whether the present government is working on this suggestion.

The ex-servicemen continued to protest and the UPA government continued to ignore their demand until the 2014 general election looked closer. On February 27, 2014 the then Defence Minister announced the UPA government’s decision to implement the OROP by April 1, 2014. The deadline proved illusory. During the general election top leaders of Congress as well as BJP repeatedly announced commitment to implement OROP. Post-election, from time to time the Modi government announced its commitment to implement the OROP.  

If the government has accepted OROP ‘in principle’, the million dollar question is: what are the hurdles? Financial? Procedural? Or both? Or the fear that the retirees of the paramilitary forces would also make the same demand and thereafter the other civilian retirees? Why a man like Narendra Modi is sounding so defeatist?

It seems the file is shutting between the defence ministry and finance ministry. On May 16, 2015,   Defence Minister Manohar Parrikar had said that "OROP proposal is in final stage. The defence ministry has approved it and the finance ministry will clear it in a few days, "adding, "it is the first time that a clear proposal has been sent to finance ministry on OROP."

Considering the size of the defence budget of the country – Rs 2,46,727 crore in 2015-16 – it is a peanut, not even 5%. The morale of servicemen is as important as weapons for the defence of the country. It should not be difficult for the country to raise the requisite amount.

Of several reasons given from time to time the most important is financial burden. The current estimate is that it would cost around Rs. 8000-9000 crore per annum.

During a panel discussion on a TV channel soon after the Prime Minister’s address to the nation on August 15, former diplomat Mr. G. Parthasarathy blamed the IAS bureaucracy for the delay. The BJP spokesman strongly protested and asserted that with the change in the government, the situation had changed and the bureaucracy would not be able to hoodwink the government. Mr. Parthasarathy, a retired IFS (Indian Foreign Service) officer was speaking from his experience in the government while the BJP spokesman who has no experience of working in the government was speaking as a politician. Of course, there is change in government because it is headed by a BJP leader but the bureaucracy is the same. That is why the Prime Minister had to express his frustration on August 15.

To understand the real reason behind the delay despite political commitments, one has to understand the way our governments at the Centre and in the States function. This will be discussed in Part II of the article which will be uploaded tomorrow.

Devendra Narain

(This article was written in August 2015. The issue raised here is perennial. Please also read Part II. Link: http://naraindevendra.blogspot.com/2016/08/who-really-governs-india-part-ii.html