Modi Govt Revises OROP for Defence Personnel, Family Pensioners; 25.13 Lakh Veterans to Benefit | Details Here

The Union Cabinet chaired by Prime Minister Narendra Modi on Friday approved payment of arrears of One Rank-One Pension (OROP) scheme to all eligible pensioners of the armed forces with effect from July 2019.

“Pension of the past pensioners would be re-fixed on the basis of average of minimum and maximum pension of Defence Forces retirees of calendar year 2018 in the same rank with the same length of service,” an official statement by the Defence Ministry read.

Union Information and Broadcasting minister Anurag Thakur announced the decision and said Union Cabinet approved the next revision of the pension of Defence Forces Personnel/family pensioners under One Rank One Pension. More than 25.13 lakh veterans will be benefitted from this decision, he added.

Union Defence Minister Rajnath Singh said, “More than 25.13 lakh veterans will be benefitted from this decision, My gratitude to the Prime Minister for fulfilling the commitment given to the Ex-servicemen of this country.”

What is One Rank One Pension?

One Rank One Pension (OROP) implies that Armed Forces Personnel retiring in the same rank with the same length of service draw the same pension regardless of their date of retirement. Previously, the computation of pension was linked to the pay drawn by the personnel in a particular pay scale at the time of retirement. Since pay scales are generally revised to the higher side on the recommendation of Pay Commissions, gaps were formed as personnel retiring after the revision of the pay scales got more pension than those who had already retired.

The Union Government accepted the ‘One Rank One Pension’ by way of its mention in the President’s address to both Houses of Parliament on June 9, 2014 and an allocation of Rs 1000 crore was provided in the Budget 2014-15 for implementation of OROP. The BJP had promised to implement OROP in the run-up to the 2014 Lok Sabha elections.

Late Union Defence Minister Manohar Parrikar, who announced the implementation of OROP for defence personnel and family pensioners in 2018, under the scheme, the gap between the rate of pension of current pensioners and past pensioners will be bridged every five years.

Who are the beneficiaries?

Armed Forces Personnel retired up to June 30, 2019 (excluding pre-mature (PMR) retired with effect from July 01, 2014) will be covered under this revision. More than 25.13 lakh (including over 4.52 lakh new beneficiaries) armed forces pensioners/family pensioners will be benefitted. Pension for those drawing above the average shall be protected. The benefit would also be extended to family pensioners, including war widows and disabled pensioners.

Arrears will be paid in four half-yearly instalments, according to the statement. However, all the family pensioners, including those receiving special/liberalised family pension and gallantry award winners, will be paid arrears in one instalment.

Expenditure

The estimated annual expenditure for the implementation of the revision is approximately Rs 8,450 crore at 31 per cent Dearness Relief (DR), according to the Centre. “Arrears with effect from July 01, 2019, to December 31, 2021, have been calculated as over Rs 19,316 crore based on DR @ 17% for the period from July 01, 2019 to June 30, 2021 and @31% for the period from July 01, 2021 to December 31, 2021. Arrears w.e.f.July 01, 2019 to June 30, 2022 have been calculated as appox. Rs 23,638 crore as per the applicable dearness relief. This expenditure is over and above the ongoing expenditure on account of OROP,” it read.

Rank-wise Likely Estimated Increase in Service Pension under OROP

The Central government had decided to implement OROP for defence personnel and family pensioners and issued a policy letter on November 07, 2015 for revision of pension with effect from July 01, 2014. The policy mentioned that in future, the pension would be re-fixed every 5 years. Approximately Rs 57,000 crore has been spent at Rs 7,123 crores per year in eight years in the implementation of OROP, the statement read.

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