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The Rank-Pension Case

Context

Supreme Court upheld the validity of the One-Rank One-Pension (OROP) scheme of the government which introduced similar pension for the military personnel of same rank and service years.

Relevance

GS-II: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Dimensions of the Article

  • What is One Rank One Pension?
  • History of One Rank One Pension
  • Issue raised before the Court
  • Court’s Observations
  • Other Issues with OROP
  • Way Forward

What is One Rank One Pension?

  • Pension awarded to two defense personnel with the same rank and year of service will be equal even if their retirement dates differed.
  • A country needs young military and hence soldiers retire early.
  • This creates disparity among retiring members in their pension payouts which was to be addressed by the OROP.

History of One Rank one Pension

  • Till 1973, Standard Rate of Pension existed similar to OROP.
  • 3rd Pay Commission made some changes to the weightage by including the additional notion service years etc.
  • 4th Pay Commission too brought certain changes.
  • Discrepancy occurred in pension payouts as the successive benefits of the revised pay commissions was not passed on to the people who retired early.
  • Hence demand for OROP was raised.
  • In 1983, K.P. Singh Deo Committee recommended the Standard Rate of Pension
  • Standing Committee of Parliament too recommended the same.
  • Koshiyari Committee recommended the OROP which was given an in principle approval.
  • OROP was notified in November 2015 by the government.

Issues raised before the Court

  • Petitioners contended that the definition of OROP has been changed before its implementation.
  • It has become ‘One Rank Multiple Pensions’.
  • Instead of automatic revision of rates, periodic revision was implemented which would not benefit the past pensioners.
  • Violative of Article 14 and 21.

Court’s Observations

  • In principle approval was given but modalities were still to be decided by the government.
  • Koshiyari Committee Report can’t be considered a policy document of the government.
  • OROP implemented can only be challenged on the ground that it is arbitrary or capricious.
  • Hence Court found no constitutional infirmity in the government orders.

Other Issues with OROP

  • Large Budget for Pensions impacts Ministry of Defense’s Capital Expenditure.
  • Meeting the demands would be financially not sustainable because with every pay commission there would be huge payouts required to clear the pensions.

Way Forward

OROP has been long due which would address the issue of inequality in pension pay. However, it must be ensured that fears of the defense personnel are allayed. A good pension policy would attract better talent into defense forces, strengthening our national security.

Source – The Hindu

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October 2022
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