Thursday, 17 July 2014

Comment on DGL for Implementation of APIP (‘OROP’) By Maj Gen (Retd) RN Radhakrishnan via e-mail to Chairman APCC

Date: Wed, 16 Jul 2014 08:50:18 +0530
Subject: GM 20140716 – Comment on DGL for Implementation of APIP (‘OROP’)
From: rnrkrish@gmail.com
To: kapil.eme@gmail.com

GM 20140716 – Comment on DGL for Implementation of APIP (‘OROP’)
Dear General Agarwal,

Your prompt acknowledgment of the copy of Memorandum to 7CPC and positive response is soothing to say the least. I am sure you will find enough material that can help in shaping our demand more in the interest of the Nation’s sovereignty than the interest of individual soldier.

I am attaching another document that deals with some reasonable comments on the draft Government letter on implementation of pension revision based on the concept of APIP. The DGL has caught the spirit of APIP. My comments are in no way in contradiction to what has been stated in the draft. My comments are aimed at clarity and specifics so that there is no scope for misinterpretation as it happened in the case of Rank Pay during 1986 – 95 and the case of Minimum of the Pay in the Pay Band during 2006 till date.

Regards RN Radhakrishnan
..................................................................................................................................................................

DGL on APIP and Effect of Future Enhancement

Section 1
SUGGESTIONS IN NUTSHELL

I suggest rephrasing the following paragraphs of the Draft Government Letter on APIP (OROP):

Para 3(a) “In the event that future retirement in a particular rank that was prevalent in the past does not take place, the rank holders of the past pensioners of that particular rank shall be deemed to have been granted non-functional financial up-gradation to the next higher rank for the purpose of revising their pension and their pension shall be accordingly revised”.

Para 3(d) “If any provision is made that alters the pay structure, pension and the service condition such as to enhance the pension of the personnel retiring in a future date, the prevalent pension rule / table must be so modified as to extend the same enhancement to the past pensioners, who are of the same rank and qualifying service, as well”.

Para 3(e) “It is intended to ensure that all Armed Forces Pensioners of the same rank and same qualifying service, are eligible to same pension, wef 01.04.2014. This will be achieved by revising the pensions of all pensioners with reference to the maximum pension drawn by the pensioners who retired wef 01.07.2013. The minimum qualifying service that has entitled the maximum pension shall be considered for equating the qualifying service of the past pensioners”.

Para 9(b) “The linkage of full pension with 33 years of qualifying service is removed for all pensioners”.

Effect of Assured Career Progression “A sound principle has been proposed in Para 9(n),
taking into account that officers are retiring in the rank of Colonels after 01.01.2006. This  proposal should also be extended to all pensioners of the rank of Jawan to Havildar, enabling
them to draw the pension at par with Nb Sub”.
  
DISCUSSION IN DETAIL

1. The battle for grant of Absolute Parity in Pension (APIP) seems to have been, at last won. (Please note that I prefer the use of ‘APIP’ in place of ‘OROP’ as ‘OROP’ by itself conveys a definition, unintended by us). I use the word ‘seems’, because I still fear that the bureaucracy
may not have the grace to concede so easily and accept the Draft Government Letter (DGL),
prepared by the VII army Pay Commission Cell, copy of which has been forwarded to the
President IESL on 16 Jun, 2014 for comments. I am hopeful and confident that the Legislators
of the present Parliament, the Defence Minister and the Prime Minister are quite clear on what
the Armed Forces Veterans expect from them, as for APIP is concerned.

2. I have some observations to make on this DGL. I have discussed those in the succeeding paragraphs. Major Dhanabalan had interpreted the correct application of the clause on rank pay, recommended by 4CPC. It has taken more than two decades. Yet, the interpretation has not been accepted by the Government for implementation in its entirety, in spite of clear and repeated directions by the Apex Court of Law. Similarly, I had interpreted the correct application of the phrase ‘minimum of the pay in the pay band’ way back in Jan 2009 and had written to all concerned, including the three Chiefs. But the matter had to be taken to AFT, CAT and the Courts. SC had ruled in our favor, not once but thrice. Yet, we are waiting for the implementation. We have seen, in many cases, how words were twisted to mean entirely
differently and therefore, there is prudence in leaving no scope for ambiguous interpretation.
With such intention I have studied this paper and made these observations..

3. Under Paragraph 2 of the DGL a quote from DESW order (file reference of the Order is missing), as reproduced below.

The DESW order also reiterates “The principle of OROP implies that uniform pension be paid to the Armed Force 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 automatically passed on to the past pensioners.” (The emphasize, by way of underlining, is mine.)

These words are the same as found under paragraph 3 of the Report, dated December 16th,
2011, by Shri BHAGAT SINGH KOSHYARI, Chairman Committee on Petitions, on a petition by
Shri Rajeeve Chandrasekhar on behalf of a few Armed Forces Veterans. The paragraph deals
with the ‘Concept of One Rank One Pension’. This report was tabled in the Rajya Sabha and I
presume that the Rajya Sabha had adopted it, unanimously.

4. A lot of water has flown under the bridge since then, and we find a draft DGL being
circulated for comments by the Pay Commission Cell AHQ. The draft by and large has captured the spirit of the concept of APIP, as defined by the Veterans and as reflected in the report by the Committee of Petition. However, a few aspects need fine tuning. These aspects have been discussed in reasonable detail in the succeeding paragraphs.

Para 3(a) 

5 It is stated: “Rank of the pensioner at the time of retirement is same as serving officer.” This statement does not convey proper meaning. The rank of the pensioner is the same as the one in which he served at the time of the retirement. We understand that, with time scale promotions having been accepted for implementation, there is perhaps no scope for future direct commissioned officers retiring as Lt to Lt Col. Most of them will rise to the rank of Colonels and retire in the future. However, I presume honorary ranks and ranks of SL Commissioned officers are likely to be in the range of Lt to Lt Col. Rank prevalent in the Armed Forces at the time of retirement must be honored. In the event that no future retirement in any particular rank is envisaged, then the past pensioner holding such a rank must also be deemed to have risen to the nearest higher rank, in which future retirement takes place. Similar must be the case for all ranks from Jawan to Sub Maj. I would suggest that this statement being redundant should be removed. Alternately the sentence may be rephrased as follows:

“In the event that future retirement in a particular rank that was prevalent in the past does not take place, the rank holders of the past pensioners of that particular rank shall be deemed to have been granted non-functional financial up-gradation to the next higher rank for the purpose of revising their pension and their pension shall be accordingly revised”.

Para 3(d)

6 It is stated: “future enhancements in pension will automatically be passed on to past
pensioners”. The note in brackets clarifies it as ‘This does not imply yearly increments.’ It
further states that ‘This could be bunching, could also be in the regime of Pay Commission, as
well as future awards regarding pay and pension’.

7 This needs specific clarification. As a matter of fact the prevalent situation is that the
higher pension is being drawn by an officer of a rank retiring later than his senior who has
retired in the same rank with equal or more qualifying service, very much because of the
increments to which the personnel serving in and after 2006, are eligible to. Therefore, the
sentence ‘This does not imply yearly increment’ is likely to very much mislead.

8 The pay fixation as on Jan 01, 2006 and further progress in the revised pay structure
was flawed due to,

a. Arbitrary multiplication formula for stepping up consolidated pay in the pay scale
prevalent prior to Jan 01, 2006
b. Bunching up as a result of (a) above

The result of the faulty pay revision is that the most-senior in the prevalent scale, having
stagnated and got as many as three stagnation increments, was permitted just about four to
five increments, not the full compliment, in the revised pay scale, thereby permitting juniors to
draw more, as many as eight, increments and consequently, more pension.

9 The concept of APIP deals with just this anomaly. Bunching up does not result in
enhancement of pension. On the contrary, it is faulty as two officers of the same rank,
differing in qualifying years of service by one year, stand to draw same pension on retirement.
Further the word ‘automatically’ does not place responsibility on any for such passing of
enhanced pension to the past pensioners. Therefore, I would suggest the following clarification
to replace the existing one: 

“If any provision is made that alters the pay structure, pension and the service condition such as to enhance the pension of the personnel retiring in a future date, the prevalent pension rule / table must be so modified as to extend the same enhancement to the past pensioners, who are of the same rank and qualifying service, as well”.

Para 3(e)

10 In this Para it is stated: ‘Therefore, current pensioners are the pensioners who retired
between 01.07.2013 and 31.03.2013 while past pensioners are those pensioners who retired
earlier’.

11 This statement implies that there are two classes of pensioners based on date of
retirement which aspect was the bone of contention and stands well settled by the Judgment of
a Constitution Bench of Apex Court. There cannot be more than one class of pensioners based
merely on the date of retirement. What is intended by means of this clarification note is that
the datum for revising the pension of all the past pensioners is taken from the pensioners who
retired between 01.07.2013 and 31.03.2013. Of course, it is rightly presumed that the maximum pension in any rank as on 01.04.2014 is likely to be from those pensioners retiring during this period. It must be borne in mind that the maximum pension and the minimum years of qualifying service must be the basis for granting APIP.

12 Therefore, I believe that it would be better to remove this classification of current and
past pensioners based on date of retirement. Instead the following provision may be included:

“It is intended to ensure that all Armed Forces Pensioners of the same rank and same qualifying service, are eligible to same pension, wef 01.04.2014. This will be achieved by revising the pensions of all pensioners with reference to the maximum pension drawn by the pensioners who retired wef 01.07.2013. The minimum qualifying service that has entitled the maximum pension shall be considered for equating the qualifying service of the past  pensioners”.

Para 9(b)

13 It states: “The linkage of full pension with 33 years of qualifying service is removed for
all past pensioners like in the case of current pensioners”.

14 As classifying pensioners as past and future amounts creating two classes of pensioners,
the reference to past and current may be omitted, as given below:

“The linkage of full pension with 33 years of qualifying service is removed for all pensioners”.

Assured Career Progression

15 It is the intention of the Government to ensure a minimum of three promotions in the
interest of Assured Career Progression to the extent possible. Accordingly, a Jawan is entitled
to the promotion to the rank of Nb Sub. I do not know how this is being implemented in the
Armed Forces, as the retirement age has not been increased to suit time scale promotions. I
suppose that non-functional financial up-gradation is being adopted. If not, it should be. And
such up-gradation must be extended to the all pensioners, irrespective of the date of
retirement. I suggest the following for consideration:

A sound principle has been proposed in Para 9(n) taking into account that officers are retiring in the rank of Colonels after 01.01.2006. This proposal should also be extended to all pensioners of the rank of Jawan to Havildar, enabling them to draw the pension at par with Nb Sub.”

Keeping the above in view the pension tables attached to draft letter needs modification. The
present tables show the pension eligibility of the pensioners of the ranks of Lt to Lt Col, only as
per those ranks. Their eligibility in terms of Para 9(n) has not been incorporated. Similarly,
the table must be modified for the ranks of Jawan to Havildar, to honor the promise of assured 
career progression. In other words, all of these three ranks with Qualifying Service of 15
to 23 years are entitled to a pension of 11635.

16 Wherever mention of current/ past pensioner is made, suitable rewording may please be
adopted. 
(The above section was forwarded to VII Pay Commission Cell 0n July 01, 2014, however some minor modifications have been carried out subsequently and incorporated in this version)

Section 2

Pension for Commissioned Officers of Ranks below Colonel

17. Applying similar principle as given above and keeping in view Para 9(n), I suppose all
directly Commissioned Officer who retired in rank below the rank of Colonel should also be
entitled to the pension appropriate to the Rank of Colonel as given under column for Colonel, in
the Table of Pension for Officers.

18. However, this aspect needs careful and prudent evaluation. Government’s acceptance of
APIP seems to have created a lot of resentment in the bureaucracy. Allotment of 1000 crores
in the recent budget has raised some doubts if APIP is proposed in its entirety or some riders
are being considered by the bureaucracy. I, for one, believe that the present Government will
not risk irking the Veteran Community. Therefore, prudence dictates that we let the Government Order be issued and implemented. If anomaly arises, we can take it up subsequently. Seeking perfection at this stage may suit the bureaucracy to delay or even
defer till 7CPC concludes its recommendations.

Unreasonableness of Qualifying Service

19 It is seen from the table that a Colonel. a Brigadier and a Lt Gen earn their maximum
pension on completion of 33, 35 and 39 years of Qualifying Service, respectively. This is
reasonable as the average age on commission is likely to be around 21 and a Colonel the Brigadier and the Lt Gen retire at the age of 54, 56 and 60 respectively. However, the Qualifying Service for maximum pension in the case of the Major General is not in tune with the trend. A Brigadier retires at the age of 58, generally, thereby putting in Qualifying Service of 37 years only. Therefore, it is obvious that stipulating 39 years of service for Major General at par with Lt Gen is anomalous. See the figures below picked up from the table appended to DGL:

Rank Colonel Brig Maj Gen Lt Gen
Qualifying Service in years 33 35 39 39

20 From the table above, it is very obvious that the Qualifying Service requirement for
Major General is out of the trend and the stipulated figure of 39 is either arbitrary or the
result of irrational revision of pay for the Major General. This needs to be corrected to read as
37, keeping in the trend of 33, 35, 37 and 39. Let us not forget that the enhancement of
retiring age for each successive rank is a uniform 2 years, all along, in the history of the Armed
Forces Service.

Disability Pension and Ordinary Family Pension

21 The table reflects the disability pension for 100% disability. It is observed that the
Disability Pension for 100% disability in the cases of all the ranks from Sepoy to General except that of Lieutenant is the same as the Ordinary Family Pension. In the case of Lieutenant it is less by 2000 as shown below:

a. Ordinary Family Pension 15036
b. Disability Pension for 100% disability 13036

This is anomalous. It perhaps is typographical error, as disability pension for 100% disability is
@60% of the service pension, similar to the Ordinary Family Pension. Therefore, a note to the
effect “Disability Pension for 100% disability is at the rate of 60% of the Service Pension”
should serve the purpose better. However, I will personally recommend that Disability
Pension for 100% disability must be at the rate of 100% or much more of the service
pension, depending on the age when the disability occurred.

22. Similar note should be added for the ordinary family pension as well, reiterating the
principle behind the figures in the Tables. Ordinary Family Pension, however, should be at 
par with the Pension drawn by the Pensioner. Is it fair to penalize the widow for the loss of
her spouse by reducing the pension? The pensioners while living would have supported by the
spouse by way of possible additional income plus moral and physical support. Is it fair for the
Government to adopt a system that leads to earning revenue at the rate of 40% of the Pension
at the cost of the demise of the pensioners?

Modalities for Initial Fixation and Future Enhancement

23 Para 9(a) describes the implementation modalities and it reads:

In order to implement OROP, the initial up-gradation of pension will be made with
effect from 01 Apr 2014 and thereafter on 01 July every year starting 01 July 2014 (after taking into account the annual increment). This will ensure automatic enhancement of rates of pension for past pensions based on the future pensions.”

This clause catches the essence of APIP and is in the true spirit. The implications, I am sure,
must have been well deliberated. However, I would like to spell it out the effect of
enhancement due to annual increment, for better understanding, as follows (please refer to
the tables 1 and 2 of the Appendix ‘A’):

a. A colonel retiring during end July 2014 and end December 2014 with 34 years of
Qualifying Service (QS) stands to get a pension of 39941 after his pay has been
incremented on Jul 01, 2014, whereas the one who retires during end July 2015 and end
December 2015 with the same years of Qualifying Service, after getting his second
increment on Jul 01, 2015 stands to get a lower pension of 39045. This is due anomalous
pay fixation adopted during 2006 to 2015. Thus, pension, upgraded to 39941 as on 01
Aug 2014 is the maximum for Colonels with QS as 34. It is also seen that a Colonel
retiring in the period from Aug 01, 2016 to Jul 31, 2016 with 34 years of QS stands to
get a pension of 40099. The interesting question that arises is that if the 7CPC
recommendations are not implemented by that time will the Colonels with QS of 34
years get the pension 40099, and the pension of the past pensioners accordingly
increased.

b. A Brigadier, however, retiring during end July 2014 and end December 2014 with
34 to 36 years of QS stands to get a pension of 40106, whereas the one, who retires
during end July 2015 and end December 2015 with 34 to 36 years of Qualifying Service 
stands to get a higher pension of 40950, the maximum possible pension. Thus, pension
upgraded to 40950 on 01 Aug 2015 is the maximum for Brigadiers with QS as 34
and more. This pension is short of 41500 the pension due to major General short by
mere 550, half of the difference in the Grade Pays of these two ranks.

24.  A corollary is an interesting question if the pension of Major Generals and Lt General
will also be enhanced to keep the existing edge over the junior ranks undisturbed. Natural
Justice demands it. These are all the maladies created due to the ludicrous simplification of pay structure into four pay bands and equally atrocious pay fixation leading to bunching up and
deprival of legitimate higher pay for the seniors.

25. Let us at least make amends while revising the pension.

END OF PAPER

Appendix ‘A’
(Refers to Para 23)

Table 1 - CASE OF COLONEL

1 Qualifying Service in years 31 32 33 34
2 Proposed Pension as on 01-04-2014 36950 36975 38865 38865
3 Emolument Qualifying for pension 73900 73950 77730 77730
4 Military Service Pay (MSP) 6000 6000 6000 6000
5 Grade Pay (GP) 8700 8700 8700 8700
6 Pay in the Pay Scale 59200 59250 63030 63030
7 Retirement Age 54 54 54 54
8 Possible Age on Commission 20 to 23 20 to 22 20 to 21 20
9 Possible QS left for Retirement in years 3 2 1 NIL
10 1. Increased Pay as on 01-08-2014 61237 61289 65182 NA
11 Expected Pension as on 01-08-2014 37969 37995 39941 NA
12 2. Increased Pay as on 01-08-2015 63336 63389 NA NA
13 Expected Pension as on 01-08-2015 39018 39045 NA NA

Table 2 - CASE OF BRIGADIER

1 Qualifying Service in years 32 33 34 35 36
2 Proposed Pension as on 01-04-2014 39020 39025 39025 39025 39035
3 Emolument Qualifying for pension 78040 78050 78050 78050 78070
4 Military Service Pay (MSP) 6000 6000 6000 6000 6000
5 Grade Pay (GP) 8900 8900 8900 8900 8900
6 Pay in the Pay Scale 63140 63150 63150 63150 63170
7 Retirement Age 56 56 56 56 56
8 Possible Age on Commission 20 to 24 20 to 23 20 to 22 20 to 21 20
9 Possible QS left for Retirement in years 4 3 2 1 NIL
10 1. Increased Pay as on 01-08-2014 65302 65312 65312 65312 NA
11 Expected Pension as on 01-08-2014 40101 40106 40106 40106 NA
12 2. Increased Pay as on 01-08-2015 67000 67000 67000 NA NA
13 Expected Pension as on 01-08-2015 40950 40950 40950 NA NA

NOTE:

a. Increased Pay against ser 10 and 12 is by adding the annual increment @3% on the pay
and grade pay drawn before the increment is due.
b. Pension against ser 11 and 13 is half of the sum of pay, grade pay and MSP.

END

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