Defence Minister Manohar Parrikar recently announced the implementation of "one rank, one pension" for the armed forces soon
"My ministry has completed all formalities and OROP will be implemented," Parrikar said at a felicitation function.
Explain One Rank, One Pension?
The ‘one rank, one pension' scheme defines that retired soldiers of the same rank and length of service will receive the same pension, regardless of when they retire.
According to the present pension scheme, the date of retirement determines the amount of pension. Currently, the pension for retired personnel is based on the Pay Commission recommendations at the time when they retired. A Major General who retired in 1996 draws less pension than a Lt. Colonel who retired after 1996.
With each Pay Commission coming up with its recommendations every 10 years, the military veterans who retire early, receive less pension as compared to those who retired later with the same rank and length of service
However, the OROP rule demands a sepoy who retired in 1995, for instance, would get the same amount of pension as the one who retired in 1996.
Who will avail the benefit of OROP?
Ex-servicemen drawing pensions, under the three service air force, navy and army will benefit from the OROP scheme, particularly those who retired before 2006. Those who retired before 2006 are drawing less pension than their counterparts and even their juniors. About 22 lakh retired servicemen and over six lakh war widows stand to be the immediate beneficiaries of the scheme.
What is the budget allotted by the government under the OROP scheme?
The United Progressive Alliance government in their interim budget had announced an amount of Rs 500 crore for the scheme. However, NDA's Finance Minister Arun Jaitley in his Budget announcement allotted Rs 1,000 crore for the scheme.
The annual burden on the pension bill will be about Rs. 8,000 crore which would progressively go up with revision in pensions. The current pension bill of the defence ministry stands at Rs. 54,000 crore.