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One Rank One Pension (OROP) Scheme - Coggle Diagram
One Rank One Pension (OROP) Scheme
What is the news?
OROP Scheme was notified by the Defence Ministry on November 7, 2015
The SUpreme Court has asked the Centre to clear all dues of OROP Schemes
What is OROP Scheme?
There are several reasons why two military personnel who may have retired at the same rank with the same years of service
Any two military personnel retiring at the same rank, with the same years of service, must get an equal pension
Need for the scheme
Salary based pension
Ranks based discrimination
No benefits from pay commissions
Liability against the sacrifice
Early age of retirement
Earlier pension mechanism
1986:
the 4th Pay Commission’s report brought further changes
1974:
when the 3rd Pay Commission came into force, certain changes were effected
Benefits of the successive pay commissions were not passed to servicemen
1950-1970:
There was a concept known as the Standard Rate of Pension
Demand for OROP
Brig K P Singh Deo committee in 1983 recommended a system similar to Standard Rate of Pension
Over the decades, several committees looked into it, none reformed
Modi government notified the current OROP scheme in November 2015
Ex-servicemen demanded OROP to correct the discrepancy
Issues with OROP
Pension budget is very large, impacting capital expenditure
Defence Ministry’s pension-to-budget ratio is the highest among all ministries
Army personnel enjoy for pension for much longer period than service
Pensions are more than one-fifth of the total defence budget
Financially unsustainable
What has the SC ruled now?
It cannot be construed as embodying a statement of governmental policy
Implementing Koshyari Committee report on historical background of the demand
It held that the OROP policy “may only be challenged on the ground that it is manifestly arbitrary or capricious”
The court did not agree with the argument that the government’s 2015 policy communication contradicted the original decision to implement OROP