On the 1st of March Ecomonic Times Hyderabad published an article by Manu.pabby@timesgroup.com titled (PENSIONS SINK DEFENCE MODERNISATION). The purport of the article is that the OROP scheme had caused an unprecedented cut to the modernization outlay leaving less money available for buying new equipment for the Armed forces.
In this case the following figures are relevant
The total Defence budget is 2.58 lakh crores. The total pension bill for Defence personnel is Rs. 82332 cr which added to the budget (for the first time as per the article) make the total Defence outlay Rs. 3.4 lakh crores.
The OROP by itself has been known to be 7500cr of which the Govt will get back IT of at least 20% thus reducing the amount to only 6000cr. This 6000cr is just about 1.76% of the Defence outlay and not a “burgeoning” increase which the article makes it out to be.
In any case the original pension would have only been less by approximately 6000cr had the OROP not been granted. Whether it is within the total defence outlay or is out side of it, is immaterial as pensions are a mandatory requirement for all Govt Defence or Civil personnel. Incidently the Govt was only fulfilling their obligation and rectifying an inequity perpetuated over a long time – since 1973.
It will be seen that the 6% DA increase for all the Govt staff (as per announcement of 24rd March 2016 is estimated at 14000cr which is far more than the OROP.
The procurement of RAFALE Jets or other similar high cost items like howitzers, attack helicopters, submarines etc. need a far greater investment than what the poor OROP stands for. Even if service pensioners forgo all their OROP to procure such military equipment it will still be no where.
THIS IS INDEED A CRUEL IRONY EMBEDDDED IN THIS ARTICLE AND SO BRAZEN.!! AN UNKIND CUT.
Look at some other facts
Over the years the MOD has been understood to be parking large sums like 5 to 10000 cr every March with the defence PSUs ostensibly towards future projects that may be given to the DPSUs. The interest earned (as reflected in their profits) is enormous and perhaps can easily fund a number of OROPs.
Another point made is about the large sums to the tune of 12 to 15000 cr returned by MOD year after year to the Ministry of Finance consequent to the failure to spend funds and not procuring the most vital equipment required for the Defence forces. It may be noted that this is mainly due to bureaucratic delays and not clearing the files which has been very glaring. A case in point is the combat aircraft procurement, which is going on for more than 10 years and still not concluded. Because of the attrition of the air fleet the Air Force has recently gone on record to say that they do not now have a capacity to fight a two front war.
Obviously every year the MOD must be budgeting for such procurements and failing to procure, return the money. The Defence forces are the affected party with no modernisation and will carry the can for any failures.
There are many such points which come to mind. The most important being that if you wish to guard a vast border and also preserve a respectable position in the comity of nations you have to jolly well afford a solid Defence force and lets not therefore whinge at OROP. It is insulting to say the least.
Are we at any time saying that the salary of the civilian beaurocrats, the politicians and others in similar categories must be curtailed to pay for economic and developmental activities?
AUTHORS
Air Cmde A K Venkateswaran (retd)
Wg Cmr K S Chandrasekar (retd) – Ex Director ECIL
Disclaimer
The above comments have been framed to bring out the correct facts in the matter and have no other intention.