In a decision aimed to garner votes of a sizable chunk of ex-servicemen in the forthcoming lok Sabha polls, the Government has accepted the long-pending demand of “one rank, one pension.” Presenting the vote on account on Monday, Finance Minister P Chidambaram also hiked the Defence Budget by 10 per cent and pegged it at Rs 2,24,000-crore.
The “one rank, one pension” issue has been debated for years and backed by major political parties like the BJP, the JD(U), the SP, the left and others. With the implementation of “one rank one pension,” the UPA hopes to get electoral gains in many northern and eastern States which are the main contributors in terms of manpower to the armed forces. These States include Haryana, Punjab, Himachal Pradesh, Jammu & Kashmir, Uttar Pradesh, Bihar, Rajasthan and Jharkhand, besides certain tribal pockets of Odisha and West Bengal. The scheme will benefit more than 25 lakh ex-servicemen and their dependents.
Ex-servicemen were demanding “one rank, one pension” for the last 25 years or so and successive Governments evaded the issue by citing reasons like financial implications and possibility of a similar demand by other security force like the paramilitary forces.
‘One rank, one pension’ will ensure that soldiers of the same rank and same length of service get the same pension irrespective of the date of their retirement. The timing is bound to raise eyebrows since it comes just two months ahead of the polls.
Announcing the decision, Chidambaram said the Government would transfer Rs 500 crore to the defence pension account. The two UPA Governments, he said, had made changes in the pension rules for defence services on three occasions in 2006, 2010 and 2012 but some gaps remained in the ranks of ‘Sepoy’ and ‘Naik’ among non-officers and ‘Major’ and above among officers.
“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 numbers of years. The Government has, therefore, decided to walk the last mile and closed the gap for all retirees in all ranks,” he announced. last week, Congress vice-president Rahul Gandhi had backed the demand and assured a delegation of ex-servicemen that he will make all efforts to ensure it is met at the earliest.
As regards the financial implications, sources said the recurring expenditure is likely to be Rs 2,500 crore, adding the Finance Ministry had informed a parliamentary panel last year that the figure was Rs 1,730 crore.
On the issue of Rs 500 crore as announced by Chidambaram, they said this figure was provisional and showed the intent of the Government to implement “one rank one pension.” The entire contour of the scheme and its implementation will be worked out in the coming weeks, they said, adding the disparity in the pension of those who retired before 2006 and after that has now ended.
The 10 per cent hike in the defence budget over last year’s allocation of Rs 2,03,672 crore will help raising of the Mountain Strike Corps to counter China. This will require recruitment of nearly 45,000 personnel for which the process has already started.
Since this will consume a major share of the allocation, modernisation and acquisition could slow down given the current economic situation. Unless additional allotment is made by the next Government, the forces will have to take a conscious decision whether to increase manpower or go in for long pending acquisitions. Key acquisitions like medium multi-role combat aircraft, artillery guns and some other big ticket items are in the pipeline for final approval.
The break up of defence budget for next fiscal includes Rs 1,34, 412 crore for revenue expenditure and Rs 89,588 crore as capital budget for acquisitions. This represents a growth of 14 per cent and 3.28 per cent respectively in the revenue and capital allocation as compared to present allocation. The defence outlay constitutes 1.74 per cent of the GDP estimated to be Rs 128,39,952 crores.