In a decision that will bring cheer to some 24 lakh retired armed forces personnel, Finance Minister P Chidambaram announced that their long-pending demand for one rank, one pension (OROP) has been accepted, even as he hiked the defence spend for 2014-15 to Rs 2,24,000 crore (Rs 2.2 trillion/($36 billion).
This is against the Rs 203,627 allocated for 2013-14 that ends March 31, Chidambaram said while presenting the Interim Budget for the new financial year in the Lok Sabha.
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While Rs 89,588 crore has been set aside for acquisitions by the armed forces, Rs 1,34,410 crore will go toward payment of salaries and other expenses. The allocation also includes Rs 500 crore for implementing the OROP norm from the fiscal beginning April 1. With this, the annual pension bill of the armed forces will go up to Rs 50,000 crore.
Congress vice president Rahul Gandhi had backed the OROP demand during a meeting with ex-servicemen here last Friday.
"I am on your side. I understand your concerns. You give your life for the country, I will do all that I can to see your demands are met," he told a delegation of ex-servicemen which called on him.
The OROP demand had begun soon after the Sixth Pay Commission delivered its report in 2006. On innumerable occasions, large numbers of ex-servicemen also returned as a protest their medals to the president, who is the supreme commander of the armed forces. However, their appeals till now had fallen on deaf ears.
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Noting that the OROP demand "is an emotive issue" that has legal implications", Chidambaram said the issue "has to be handled with great sensitivity".
He also pointed out that during the tenure of the UPA governments, changes in pension rules applicable to the defence services were made thrice in 2006, 2010 and 2013.
"As a result, the gap between pre-2006 retirees and post-2006 retirees has been closed in four ranks (subject to some anomalies that are being addressed): havildar, naib subedar, subedar and subedar major. There is still a small gap in the ranks of sepoy and naik and a gap in the ranks of major and above," the finance minister said.
Contending that India needs "a young fighting force, we need young jawans, and we need young officers", Chidambaram added: "We also need to take care of those who served in the defence forces only for a limited number of years."
"Government has, therefore, decided to walk the last mile and close the gap for all retirees in all ranks. I am happy to announce that government has accepted the principle of one rank, one pension for the defence forces," the finance minister said.