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Government Announces One Rank One Pension Scheme for Ex-Servicemen

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The Union Government on 5 September 2015 announced One Rank One Pension (OROP) scheme for ex-servicemen. The scheme was pending for nearly four decades.

This was announced by the Defence Minister Manohar Parrikar. Benefit of OROP will be given with effect from 1 July 2014

What and Why of OROP

OROP, (one rank, one pension) scheme promises to pay “uniform pension to the Armed Forces 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 to be automatically passed on to the past pensioners.”

OROP simply means same pension, for same rank and for the same length of service, irrespective of the date of retirement.

What it does is, bridges the gap between the rate of pension of the current pensioners and the past pensioners. It also extends the future enhancements if any, to be automatically passed on to the past pensioners.

Till now rate of pension was based on the date of retirementrank and the tenure of service of the armed personnel. OROP, makes date of retirement irrelevant to determine the rate of pension, which was a main contentious issue. Pay increase is dependent on the pay commission’s recommendation implementation date, every consecutive redraws the rate of pay of the personnel, only the serving or the retiring personnel after the implementation of pay commission recommendations are eligible for the enhanced benefits, goes against those who retired before that date.

The delay was due to the addition of the financial burden on the country’s exchequer, which is about 8,000 to 10,000 crore as of date, it is bound to increase in the future. Additional burden to the Government which is burdened by the widening fiscal deficit.

Highlights of OROP

  • Will be implemented from July 1, 2014 and
  • The base year would be 2013.
  • Estimated cost for the implementation of OROP is 8,000 to 10,000 Crores
  • Pension revision after every 5 years
  • Soldiers who have died naturally during war will be a beneficiary of the OROP scheme
  • Arrears will be paid in installments – 4 half yearly (as the scheme will be implanted retrospectively)
  • All widows including war widows will be paid arrears in one instalment.
  • Revised pension will be the average of the minimum and maximum pension in 2013
  • Pension of those who were drawing above the average will be protected, their pension will not be reduced
  • A one-member judicial committee will be constituted. It will give reports on equalization period in 6 months, for revision of pension.