IESM LETTER TO RM ON OROP ANOMALIES

21st January 2016

The Raksha Mantri
South Block, Ministry of Defence
New Delhi

Urgent Need to Rectify Anomalies in OROP
in Govt notification dated 7 Nov 15

Dear Shri Manohar Parrikar ji

Please refer to Govt executive letter dated 26 Feb 14, press release dated 5 Sep 15, Govt notification dated 7 Nov 15 and 14 Dec 15. Please also refer to the statement made by MOS Defense Sh Rao Inderjit Singh in Parliament on 2 Dec in reply to question asked by Sh Rajeev Chandrashekhar regarding implementation of OROP. (All attached)

One Rank One Pension was approved by UPA Govt in budget dated 17 Feb 14 and then by NDA Govt in their budget dated 10 Jun 14. UPA Government issued an executive order dated 26 Feb 14 for the implementation of OROP dues to veterans at the earliest. This was never implemented by the MOD nor a demand note was ever raised. The approved definition of OROP by two Governments is given below.

One Rank One Pension (OROP) implies that uniform pension be paid to the Armed Forces Personnel retiring in the same rankwith the same length of service irrespective of their date of retirement and any future enhancement in the rates of pension to beautomatically passed on to the past pensioners. This implies bridging the gap between the rate of pension of the current pensioners and the past pensioners, and also future enhancements in the rate of pension to be automatically passed on to the past pensioners.

OROP implies that a senior rank soldier should never draw pension less than his junior rank soldier. This cardinal principle is the soul of OROP and must never be violated.

Government issued a notification on 7 Nov 15 for implementing OROP. Government reiterated above-mentioned definition of OROP in the letter but introduced some conditions in the notification that completely destroy the definition approved by two parliaments. These conditions have created four anomalies which completely violates the definition and thereby, the soul of OROP. These anomalies are discussed in detail in succeeding paragraphs.

1) Fixation of Pension on calendar year of 2013 instead of FY of 2014: Fixation of pension as per calendar year 2013 would result in past retirees getting less pension of one increment than the soldier retiring today. This will result in past retirees drawing lesser pensions than present retirees. This will completely destroy definition of OROP approved by two Parliaments and will also result in loss of one increment across the board for past pensioners in perpetuity.

2) Fixation of pension as mean of Min and Max pension: Fixing pension as mean of Min and Max pension of 2013 would result in more anomalies wherein same ranks with same length of service will draw two or more different pensions thus violating the very principle of OROP. This issue was discussed with RM in various meetings and after due deliberations it was decided that accepting highest pension of each rank in the year would meet the requirement as base of pension.

3) Payment wef 1st Jul 14 instead of 1st Apr 14: OROP has been approved in budget of 2014-15 by two parliaments. As per norms of Government, all proposals approved in budget are applicable from 1st April of that FY. In the case of OROP, the Govt had issued specific orders to its applicability wef 1st April 14. Hence implementation date for OROP from 1st July will be against the Parliament approval. Changing the date would result in loss of 3 months emoluments for OROP across the board. However, if OROP implementation date is to be kept as 1st July, then the base pension should also be accepted as per the PPOs of July 2014.

4) Pension Equalisation every five year: Pension equalisation every five year will result in a senior rank soldier drawing lesser pension than a junior rank soldier for five years thus OROP definition will be violated for five years. This will also result in permanent violation of definition as fresh cases will come up every year.

These anomalies will result in lesser pensions to widows, soldiers, NCOs and JCOs than what will be due to them on approval of OROP. This will result in veterans not getting OROP as per approved definition and will create large discontentment across all ranks.

There is a need to have a relook at the pensions of Hon Nb Subedars, Majors and Lt Cols.

a) Some Havildars are granted rank of Hon Naib Subedar in view of their exemplary service. These soldiers are not granted pension of Naib Subedar thus making the Hon rank just ceremonial. It is requested that Hon Naib Subedars should get pension of a Naib Subedar rather than that of a Havildar. Similarly, this must be accepted as a principle and it should be applicable to all Hon ranks in case of NCOs and JCOs.

b) There are only a few Majors as veterans. Moreover no officer is retiring in Major rank now. In the past, officers were promoted to Major rank after completing 13 yrs of service whereas present officers are getting promotion of Lt Col in 13 yrs. It will be justified to grant all pensioners of the rank of Major, minimum pension of Lt Col as they cannot be compared to present retirees as officers are not retiring as Majors any more. Number of such affected officers is not more than 800 and will not cause heavy burden to Govt.

c) Similarly, all pre-2004 retiree Lt Cols should get the minimum pension of full Col. Presently all officers retire in the rank of Colonel hence all Lt Col equivalents should be granted min pension of Colonels.

In view of above you are requested to rectify these anomalies and issue addendum to notification issued on 7 Nov 15 for implementation of OROP. We strongly believe that there will be no requirement of judicial committee for attending to anomalies creeping up in implementation of OROP. Grant of increase in pension in case of honorary ranks and Majors and Lt Col must also be approved as a good will gesture.

This letter is being signed by three major organizations with the approval of more than 200 organizations. List of such organizations is attached.

sd/- Lt Gen Balbir Singh Chairman IESL Advisor UFESM

sd/- Col Inderjit Singh Chairman AIEWA Chairman IESM

sd/- Maj Gen Satbir Singh Chairman UFESM Advisor UFESM

Hike the Basic Minimum pay by 44%

Implementing the recommendations of the 7th Central Pay Commission (7th CPC) is not going to be a cakewalk for the government.

The brewing discontent among st the central government employees is threatening to create a storm and disrupt the implementation process. The unions are asking around 44 percent hike on the basic minimum pay suggested by the 7th Central Pay Commission.

The 7th CPC had recommended the minimum pay at Rs 18,000 and the maximum pay at Rs 250,000, but the employee unions wants the minimum pay to be hikes from Rs 18,000 per month to Rs 26,000–a rise of around 44.4 percent.

The unions also said that the pay panel has recommended the lowest hike in basic pay since independence.

The unions argue that pay scales vary from states to states. They also want the minimum pay to be applied across all the states in the country.

The Central government employees’ unions have not only demanded to increase the minimum pay of central government employees, but also want government to review the salaries of central government employees after every 5 years instead of the current 10 years.

Late Implementation of Seventh Pay Commission

The announcement of a deferral is expected to be part of Jaitley's Budget speech on February 29

With a massive financial resource crunch estimated for 2016-17, the government is planning to defer the implementation of the 7th Pay Commission award.

Last week, the Union Cabinet approved the formation of an empowered committee of secretaries to work out ways for staggering the award through more than one financial year, instead of letting the Rs 1,02,100-crore bill from the implementation of the award come up at one go.

A top-ranked official said one of the options for the empowered committee was to defer the increase in allowances for central government employees, while letting the rise in pay for all scales to go through. According to finance ministry figures, the ratio of allowances to pay for these 4.7 million employees is 1:1.4. For instance, the Budget estimates in 2015-16 pegged the salary bill for all central government employees at Rs 60,731 crore, whereas the tab for allowances is Rs 84,437.4 crore.The step would allow Finance Minister Arun Jaitley to keep the Budget numbers for this financial year and the next close to the targeted 3.9 per cent and 3.5 per cent of gross domestic product (GDP) that he has committed himself to. For instance, even if the annual expenditure for 2016-17 were kept at about Rs 18 lakh crore (almost unchanged from Rs 17,77,477 crore in 2015-16), the Pay Commission recommendations would add another 5.5 per cent to it.

Given the sluggish pace of GDP growth and the almost negative deflator, the aggregate Budget numbers would otherwise be impossible to sustain on the back of the current trend in growth of tax receipts - just 50 per cent of the Budget estimates after the first eight months of the year, according to Controller General of Accounts data. The assumptions being worked on in North Block are that these might not change dramatically in the next financial year, too.

The announcement of a deferral is expected to be part of Jaitley's Budget speech on February 29. The formation of an empowered committee for the pay panel recommendations, again a first for the central government, is meant to bring all stakeholders on board in the exercise.

The official explained ministry-wise consultations with the department of expenditure in the finance ministry, in the run up to the Budget, were mostly over. Those discussions had proceeded on the assumptions that the Pay Commission recommendations would be implemented. It was now necessary to bring the secretaries of key departments on board about the need for a drastic cut-back on those estimates.

The status quo on allowances would also allow the government to ignore the demand made by various staff associations to raise the minimum level of salary for employees. The Pay Commission has suggested that the minimum should be Rs 18,000 per month; the unions have demanded that it should be raised to a band of Rs 19,000 to Rs 21,000 a month. Such a change would have created a ripple effect. About 70 per cent of the government employees are bunched in the non-executive ranks; the starting salary for them tops about Rs 42,000 a month, show calculations by the Commission. Even a modest increase in pay for them would cascade the bill for the government by another Rs 50,000 crore annually. The award of the Commission is slated to take effect from January 1 this year.

A key element in the plan to defer some elements of the 7th Pay Commission recommendations will be the railway ministry. Government managers reckon the powerful unions of the Indian Railways need to be brought on board for this plan to be successful. The higher wage bill for the Suresh Prabhu-led ministry works out to Rs 28,450 crore a year, only a shade less than the yearly loss it makes on its passenger services at present. No formal communications have been sent out to the railway unions by the committee. "It will follow once the empowered committee has decided to take a call on which allowances to clip," said the official.

In a recent television interview, Minister of State for Finance Jayant Sinha had said the Pay Commission recommendations were the biggest headache for his ministry, struggling to keep the aggregate expenditure of the Union government under control.

Pay Matrix Recommended by 7th CPC is not final and subject to change – Federation Sources

The Constituent Unions of NCJCM has called for three days’ agitation Programme from 19-1-2016 to 21-1-2016 to draw the attention of central government to settle the Modified charter of demands.

Recently they demanded the government to constitute an empowered Committee to settle their demands through negotiation. However, the Cabinet gave its approval for constitution of an Empowered Committee to study the 7th Pay Commission report for implementation Process.

We asked some Trade Union Leaders about their expectation from the Government in respect of 7th Pay Commission report. They told that so far they didn’t have any formal meeting over Pay commission report with Government after the report submitted by commission. When asked about their opinion about the Format of Pay Matrix recommended by 7th Pay Commission, they said ” We don’t think that the Pay Matrix recommended by 7th CPC is Final, we won’t accept the Fitment factor recommended by the Commission”

They said, “Of course there will be some anomaly would arise when it is in the process of implementation in respect of Pay Matrix . That cannot be anticipated now. As of now Anomalies in bunching and Promotion benefits are expected. But we think this Pay scale recommended in 7th pay commission report is not FINAL and subject to change. Because it needs concurrence from both the end.”

They added further ” The central government may accept this recommendation without any modification. Because the central government itself told after giving four-month extension to the Pay Commission that the Seventh Pay Commission would be mindful of the fiscal concerns. It indicates the Central Government intention. But the Central Government Employees’ Unions and Association are very much disappointed with this recommendation and we sought modifications in many recommendations. Our Federations declared it as retrograde recommendation. Hence it will not be easy for the central government to implement the report without doing any change in the recommendations”.

So the Unions Federations are not getting too much involved in 7th CPC Pay Scales. Because they are firm in their decision that percentage of increase recommended in minimum pay is far below the required level prescribed by Dr. Akhroid formula and 15th ILC norms for determining Minimum Pay and it need to be increased. However, NFIR has tried to establish that the take home pay is very much less when compared to previous pay commissions. If the Central Government accept to increase the Minimum Pay, then that would be the criteria for arriving subsequent pay scales. Hence expecting changes in Pay Matrix is inevitable.

Government sets up panel to study 7th Pay Commission’s recommendations

Constitution of an Empowered Committee of Secretaries to process the recommendations of the 7th Central Pay Commission

Press Information Bureau
Government of India
Ministry of Finance

13-January-2016

Constitution of an Empowered Committee of Secretaries to process the recommendations of the 7th Central Pay Commission

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has given its approval for setting up an Empowered Committee of Secretaries under the Chairmanship of Cabinet Secretary, in order to process the recommendations of 7th Central Pay Commission (CPC) in an overall perspective.

The Empowered Committee of Secretaries will function as a Screening Committee to process the recommendations with regard to all relevant factors of the 7th CPC in an expeditious detailed and holistic fashion.

PIB

One Rank One Pension – UFESM writes to Members of Parliament

Dear Members of Parliament,
You are all aware of the issue of One Rank One Pension of Armed Forces. This issue is being debated since 1984 and finally OROP was strongly recommended by Koshyari Committee in 2011

As per Koshyari Committee Report, and the deposition by Secretary (ESW), Ministry of Defence, before the Committee One Rank One Pension is defined as.

Definition
“One Rank One Pension implies that uniform pension be paid to the Armed Forces Personnel retiring in the same rank with the same length of service irrespective of their date of retirement and any future enhancement in the rates of pension to be automatically passed on to the past pensioners”.

The above definition of OROP has been accepted by both houses of the Parliament. Honourable Supreme Court has also ruled in favour of OROP in many judgments. The same definition was included in the Executive Order of the Govt of India for the Implementation of OROP vide its letter No- 12(01)/2014-D (Pen/Pol) dated 26 Feb 2014 (Copy enclosed).

The One Rank One Pension which has been announced on Sep 5, 2015 and notified on Nov 7, 2015 is not the real OROP. It has many anomalies illustrated below which if not corrected will completely destroy the definition of OROP approved by the Parliament.

1. Revision every 5 years instead of every year: This defeats the very concept and definition of OROP.

Illustration: 20 YEARS OF SERVICE FOR THE FOLLOWING 2 SEPOYS:
Sepoy A and Sepoy B join army on 1 July 1991
Sepoy A- retires in Nov 2011- Rs.4000/- as basic wage. Pension = Rs.2000/-.
Sepoy B – retires in March 2012- Rs 4500/- as basic wage (Increment as per Jan 1st). Pension = Rs. 2250/-
A is getting Rs 250+ DA = Rs. 600/- less than B and having served for the same length of service of 20 yrs.
Loss incurred – Rs.7200/- per year or Rs 36,000/- in 5 years.

2. Govt has announced that Benefit of OROP will be effective with effect from 1.7.2014: Instead of 01 Apr 2014, thereby causing a loss to the ESM of 2100 Crores that is presuming annual expenditure of Rs 8400/ crore on OROP.

Illustration: All articles approved in any budget are applicable from 1st April each year. Hence OROP should also be effective from 1st April 2014.
By making it effective from 1st July 2014 government is putting ESM at a loss of Rs.2100/-Crores for three months

3. Govt has announced that Base year for award of OROP to be the calendar year of 2013 instead of Financial Year of 31 March 2014.This defeats the definition of OROP and puts the old pensioners at loss as compared to the present pensioners. This will also mean that a pensioner holding senior rank will get pension less than his junior rank.

Illustration: if Base year for pension is likely to be 2013 as against 31 Mar 2014 when OROP is applicable from 1st April 2014. This put a soldier behind by one year / annual increment which is Rs. 500/-. However if the effective date for implementation is planned to be 1 July 2014 then the pension should be based on 30 June 2014.

4. Fixation of pension as the mean average of the pay band instead of the top level: This adds insult to injury and defeats the definition of OROP. Puts the old pensioners at loss as compared to the present pensioners.

Illustration: By making it the mean of the year 2013 the defence personnel retiring with pension above the mean will be at disadvantage. This would require application of protection clause for a large number of retirees.
Supposing A soldier retires in 1980 on completion of 20 years of service.
OROP means his pension should be brought at par with the pension of the soldier retiring on 31st March 2014 with 20 years of service. By taking mean of min and max pension of 2013, the soldier will be put to financial loss. This loss can only be calculated once pension tables are declared by CGDA.

5. One person judicial committee instead of a five person committee: This commission will not have representative from ESM but will have a member from IAS as secretary. Hence, it is expected that the recommendations of the committee will be influenced by IAS lobby (based on inputs from the IAS lobby). Recommendations of 7 CPC are indications wherein Armed Forces have not been given due justice. However announcement of judicial committee by GOI along with the notification is a clear indication that GOI is sure that this notification is faulty and will not be accepted by the Defence Fraternity.

In the age of smartphones and Social Media, no person is left unaware of the happenings in any part of the country. The serving members of the Armed forces are well aware of the acts of the government and the Protest Movement by the Ex-Servicemen at Jantar Mantar and across the country. The present Prime Minister made a promise to the Armed Forces at Rewari before the General Elections in 2014 that his Government will deliver OROP on taking oath of office if elected to form Govt. Implementation of OROP was also included in the President address to both houses of Parliament when the NDA Govt took over. That promise has not been fulfilled by this Government even after one and half year.

It is a common knowledge that more than 70% of serving soldiers are relatives of the Ex-servicemen. Ill treatments of veterans will have direct de-motivating effect on the serving soldiers.

It is also noteworthy that there is shortage of 30% in the Armed Forces. Policies adopted by the government have led to a situation where the youth of today is de-motivated to join the Armed Forces. Clearly, this shall lead to more reduced number than existing today. These deficiencies are serious nature and have direct bearing on National Security.

May we request you to ponder over the situation and think about the security of India in coming years. May we also request you to ask for serious discussion in Parliament on National Security and nail the Government so that every Indian is educated about the fraud being played on the nation by the GOI. May we also ask you to raise questions in the Parliament and ask the government to Implement One Rank One Pension (OROP) after removal of the seven shortcomings pointed out and issue fresh Notification exactly as per approved definition of OROP.

With Regards
Maj Gen Satbir Singh, SM (Retd) 
Advisor United Front of ESM & Chairman IESM
Tele No : 0124-4110579,09312404269
Email : satbirsm@gmail.com

Pay Commission Award To Be Implemented In April, No Separate DA To Be Announced

The recommendations of the Seventh Pay Commission award to review salaries of central government employees, will be implemented in April and no separate DA will be announced, Finance Ministry sources said.

Finance Minister Arun Jaitley

“The cabinet will give its nod to implement the Seventh Pay Commission award in April after some modification and it will be effective from January 1, 2016,” the sources added.

After receiving the Seventh Pay Commission report on November 19, the government had formed the implementation cell of the pay commission headed by ar Joint Secretary in Finance Ministry on November 20 last year.

With an eye on implementation of Pay Commission award, the government will not hike the dearness allowance (DA) to 1119% from existing 125%. The DA hike will be merged with the new pay as the Pay Commission made report, assuming that the rate of Dearness Allowance would be 125 percent at the time of implementation of the pay commission recommendation, i.e. on January 1.

Hence, the government has bound to implement the Seventh Pay Commission award in April, they confirmed.

The notification to put into effect the Seventh pay commission recommendation will be issued in April before the announcement of West Bengal, Assam, Kerala and Tamil Nadu states assemblies’ election in May 2016, which will benefit 50 lakh central government employees and 52 lakh pensioners including dependents, sources of Finance Ministry said Wednesday.

“The BJP led central government decided execution time of the pay commission’s award in April, which will also be possible pre-election “special packages” for West Bengal, Assam, Kerala and Tamil Nadu to win sufficient seats of states Assemblies polls, sources told our reporters.

The Seventh Pay Commission was set up by the UPA government in February 2014, The Commission headed by Justice A K Mathur submitted its 900-page final report to Finance Minister Arun Jaitley on February 19, recommending 23.55 per cent hike in salaries and allowances of Central government employees and pensioners.

The panel recommended a 14.27 per cent increase in basic pay, the lowest in 70 years. The previous 6th Pay Commission had recommended a 20 per cent hike, which the government doubled while implementing it in 2008.

The Seventh pay commission recommended fixing the highest basic salary at Rs 250,000 and the lowest at Rs 18,000and its increased the pay gap between the minimum and maximum from existing 1:12 to 1: 13.8

The government constitutes the Pay Commission almost every 10 years to revise the pay scale of its employees and pensioners, often these are adopted by states after some modifications. However, the Seventh Pay Commission suggested to discontinue the practice of appointing pay commissions in future.