The One Rank One Pension (OROP) scheme will cost the government Rs 7,500 crore per year as against the earlier projected estimate of Rs 8,300 crore. The government on Wednesday issued detailed instructions regarding OROP implementation and said that the defence pension outlay was set to increase by 20 per cent in 2016- 17.
“The annual recurring financial implication on account of implementation of OROP at the current rate will be approximately Rs 7,500 crore,” the instructions issued by the government said.
While the ex-servicemen community welcomed the instructions, it frowned over the reduction in the annual financial spending. “We welcome this announcement of OROP tables by the government as it is the next logical step. But the devil lies in the detail, and we will have to see the details in the tables to know if our issues have been addressed. The original estimate made by the defence minister was for Rs 8,300 crore. Now, they have brought it down to Rs 7,500 crore, whittled down the amount by Rs 800 crore, which amounts to pinching pennies,” said Wing Commander (retd) C K Sharma, treasurer of the Indian Ex Servicemen Movement.
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Despite a demand by protesting ex-servicemen to implement OROP with effect from April 1, 2014, the government instructions added that the arrears will be paid with effect from July 1, 2014 and pegged the arrears till December 2015 at Rs 10,900 crore.
“The total increase in the Defence Budget for pensions is estimated to go up from Rs 54,000 crore (BE 2015-16) to around Rs 65,000 crore (proposed BE 2016-17), thereby increasing the Defence Pension Outlay by about 20 per cent,” the instructions said.
According to the instructions, 86 per cent of the total expenditure on account of OROP will benefit the JCOs/ORs. Payment of arrears will be made by the Pension Disbursing Authorities in four installments, except for family pensioners and pensioners in receipt of gallantry awards, who will be paid arrears in one installment.