OROP: Only 5 per cent army veterans unhappy; those in politics creating trouble, says Parrikar

IndiaToday.in  | Edited by Prabhash K Dutta 

Panji, November 5, 2016 | UPDATED 19:31 IST 

A +A -

BHIGHLIGHTS

• 1

  Manohar Parrikarhas claimed that 95 per cent army veterans are happy with OROP.
• 2

  Parrikar blamed those ex-soldiers, who have joined politics, for OROP row.
• 3

  Parrikar blamed implementation procedures for inconsistencies in OROP.

Defence Minister Manohar Parrikar on Saturday said that 95 per cent of retired defence personnel have benefited from the implementation of the One Rank, One Pension (OROP) scheme.

OROP: Only 5 per cent army veterans unhappy; those in politics creating trouble, says Parrikar

Defence Minister Manohar Parrikar held those ex-servicemen, who have joined politics, responsible for OROP row saying that 95 per cent of the veterans are happy with the scheme.

Parrikar claimed that only remaining 5 per cent faced problems with the current OROP.  The defence minister further said that all the issues relating to OROP would be resolved in the next two months.

IndiaToday.in  | Edited by Prabhash K Dutta 

Panji, November 5, 2016 | UPDATED 19:31 IST 

A +A -

HIGHLIGHTS

• 1

  Manohar Parrikarhas claimed that 95 per cent army veterans are happy with OROP.
• 2

  Parrikar blamed those ex-soldiers, who have joined politics, for OROP row.
• 3

  Parrikar blamed implementation procedures for inconsistencies in OROP.

Defence Minister Manohar Parrikar on Saturday said that 95 per cent of retired defence personnel have benefited from the implementation of the One Rank, One Pension (OROP) scheme.

Parrikar claimed that only remaining 5 per cent faced problems with the current OROP.  The defence minister further said that all the issues relating to OROP would be resolved in the next two months.

https://youtu.be/SII2498w4Qo

New Pension System – It’s No Pension Scheme

New Delhi:- Discontent is simmering among the government employees and teachers over the Contributory Pension Scheme also called the National Pension Scheme that was launched in 2003 by the then NDA government. The united Andhra Pradesh government and later the Telangana State governments have also adopted the scheme.

As per this scheme, the central government employees appointed on or after January, 1, 2004 will come under this scheme. Until then, the government employees were getting pension as an additional post-retirement benefit. But, the new scheme provides for pension based on the contributions from the employees accrued in a fund set up for the purpose.

The Pension Fund Regulatory Development Authority Act (PFRDA) was enacted by the then UPA government in 2013 with the support of the major opposition, NDA. In accordance with the Act, the pension funds will be invested in the stock market and the quantum of pension being subject to its vagaries.  The lives of the retirees would therefore swing as per the bulls and bears of capital market.

The government and the promoters of PFRDA Act argued that the retired employees are to be benefited immensely by the New Pension Scheme as the markets would yield them wealth. But, this wealth perceived is actually market capitalisation. Its estimates are just notional. In the previous scheme, the pension benefit was defined and calculated based on the last drawn pay. Apart from this defined pension, the retired employees in the old scheme would also get other benefits like gratuity and commutation.

But, in the new pension scheme, the quantum of pension is completely dependent on the price fluctuations in the market. If the market plunges due to one sentiment or the other, then the retirees would be losing heavily for no fault of theirs. Stock markets across the world are prone to either manipulation or speculation. The uncertainties deprive the government employees the luxury of planning their retired life as they become vulnerable to the peculiar behaviour of stock markets.

The CBT was “unanimously of the opinion that the proposals in the report … would seriously jeopardise the safety and future savings of the workers as well as the whole concept of social security and social insurance.” Even the Bhattacharya Committee, appointed by the NDA government, did not recommend only a ‘defined contribution’ scheme, which is the case with the New Pension System. It recommended a hybrid Direct Benefit /Direct Contribution or mixed scheme.

The policy of pension reforms emerges out of the World Bank report titled, “Averting the Old Age Crisis”. This report advocated pension sector reforms. The essence of the World Bank report  was not to tackle the crisis  faced by the elderly in their old age  as professed in the title of the report , but , to resolve the ‘crisis’ of the pension pay out burden of the governments world over.

This new scheme works out as follows. The gratuity and commutation amount are paid out of the 60 percent withdrawn from the accumulated contribution of the employees during their service. The remaining 40 percent will be invested in the annuities. The income yielding out of this would be paid as pension.

In the old pension scheme, the amount was essentially dependent on the maximum wage one reaches by the time of retirement. The other benefits like gratuity, commutation availed in the old Pension Scheme are non-taxable but 60 percent withdrawals at the time of retirement under the New Pension Scheme are subject to taxation.

The pension amount earlier was guaranteed. But, now, it is left to markets. When the UPA government defended the New Pension Scheme stating that it would yield more returns than the pension obtained otherwise, Members of Parliament asked the government to ensure a minimum guaranteed pension in the PFRDA act itself.

The experience so far suggests that the net asset value accrued on these contributions is not even matching the bank interest. Thus, the employees who have earlier failed to comprehensively comprehend the implications of the New Pension Scheme started feeling the pinch of it. Hence, the disgruntlement!

The total amount accumulated accounts for about 44,000 crores. Similarly all the state government employees enrolled in the new scheme accounted for over 28 lakh. The  total amount was to the extent of over Rs 50,000 crore. This accrual will increase each passing year.

Even the Supreme Court held that pension is a social security measure and is the fundamental right.  The apex court in D.S. Nakara & Others vs. Union of India, 1982   stated that Pension is a right; not a bounty or gratuitous payment.

Pension also has a broader significance in that it is a social-welfare measure rendering socio-economic justice by providing old-age economic security to those who toiled ceaselessly in their youthful heyday. Privatising pension funds tantamounts to privatising social security and depriving the protective freedom enjoyed by the employees, who contributed to the government service for decades.

The PFRDA Act applies to those appointed after 2004. However, the pace with which pension reforms are implemented across the world leaves no guarantee that the Act will not be mandatorily extended to the employees recruited prior to 2004, who are now in the old defined benefit pension scheme.

In case, if the government does so, it is unlikely that the courts will strike it down as Supreme  Court in many judgements held that when  the State  considered  it  necessary  to liberalise the pension scheme   in order  to augment  social security in  old age  to government  servants it  could not grant the  benefits of liberalisation only  to  those who retired subsequent  to the  specified date and deny the same to those who had  retired prior  to that date.

How can one be deprived of choice of spending one’s surplus income? Even if the government ascribes to itself the parental role, the mandatory savings should yield minimum guaranteed and better returns. The risk-absorbing capacity of a retiree will be limited and it varies from individual to individual.

The governments often implement fiscal austerity regime. They are legally mandated to control expenditure under Fiscal Responsibility and Budget Management (FRBM) Act. In such a situation, the possibility of government slashing its share of the contribution by amending the Act cannot be ruled out.  Noble laureate and former chief economist of World Bank, Joseph Stiglitz warned that pension privatisation can lead to worsening of economic crisis as evident from the experience of Argentina.

Source:- Hans India

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Draft minutes of Allowance Committee meeting held on 25th Oct, 2016

North Block, New Delhi

Dated the 7th November 2016

To

RECORD NOTE OF THE DISCUSSION ON DOPT-SPECIFIC ALLOWANCES, HELD WITH THE STAFF-SIDE, NATIONAL COUNCIL (JCM) AT 3.00 P.M. ON 25.10.2016 UNDER THE CHAIRMANSHIP OF SECRETARY(P).

A discussion on the DoPT-specific allowances with the Staff-Side National Council (JCM) was held at 3.00 p.m. on 25.10.2016 under the Chairmanship of Secretary(Personnel) in Room No. 119, North Block, New Delhi in compliance with the direction contained in the minutes of the 2nd meeting of the Committee on Allowances held on 01.09.2016 that every Ministry/Department should firm up its views/comments on allowances relating to the Ministry/Department after holding discussion with their Staff Associations.

2. List of participants is at Annexure.
3. At the outset JS(JCA) welcomed all the members of the Staff side of the National Council of JCM to the discussion on department specific allowances. JS(JCA) informed that in the second meeting of the Committee on Allowances it was decided that all the department specific allowances will be discussed with the JCM. After a brief introduction it was decided to discuss the following department specific allowances on which DOPT has received the comments for Staff-Side.

• Children Education Allowance (CEA)

The Staff-Side has stated that the benefit of Children’s Education Allowance should be extended to the Graduate and Post Graduate levels also. They have informed that the private institutions are charging exorbitantly. So, subject to a ceiling on tuition fees and hostel fees, the CEA should be extended to the Graduates and Post Graduates level. Staff-Side has informed that they had also represented to the Pay Commission for simplifying the procedure wherein they had suggested that reimbursement should be based on the bonafide certificates from the schools where the children are studying. This suggestion has been accepted by the Pay Commission and the Staff-Side has requested that it should be implemented.

On the issue of DOPT’s circular on e-receipt, Secretary, DoPT clarified that this circular had been issued before the government accepted the 7th Pay Commission recommendation.

(Action: JS(Estt.)

• Night Duty Allowance (NDA)

Staff-Side has pointed out that the Night Duty Allowance (NDA) is still being paid at the 4th CPC rate. Even though there is a Board of Arbitration award in favour of employees that from 01.01.1996 it should be given in the 5th CPC pay scale, the government did not accept the arbitration award and even today employees are getting it at the same rate as it was prevalent during the 4th CPC period.

In the Ministry of Defence a lot of litigation had taken place and the matter went up to the Supreme Court. Hon’ble Supreme Court directed that it should be paid on the basis of the actual pay drawn and that NDA should be revised w.e.f. 01.04.2007 at the 6th CPC pay scale which has been implemented by the government. However, the audit authorities came up with an objection that there is a ceiling for it which has been objected to by the Staff-Side.

Apart from that, the 7th Pay Commission has recommended that it should be worked out with the actual pay of the employee being the criterion. However, in spite of that, except for the Ministries of Defence and Railways, employees working in other Ministries/Departments are getting it at 4th CPC rate. Thus, the absence of uniformity on this allowance across Ministries/Departments is very glaring which, according to the Staff-Side, is a principal source of litigation and will continue to remain so. Therefore, the Staff-Side has suggested that an early revision of the NDA without ceiling, and on the basis of the actual basic pay, and extending it to whoever is asked to do night duty will go a long way in reducing litigations in the future.

(Action: JS(Estt.)

• Over Time Allowance (OTA)

Staff-Side has pointed out that there are two types of over time duty. One is covered under the Factories Act, 1948, and the other is for the office staff. In the first case, since it is a statutory obligation, the Pay Commission has not recommended anything on it. But for those Central Government employees who are not covered under the statutory provisions of the Factories Act, OTA is paid at a single rate of Rs.15.85/- only and, that too, for the first hour immediately after the scheduled office closing time, it is Nil. In case of OTA there is also an arbitration aw-ld from 01.01.1996 that it should be at par with the 5th CPC pay scale. However, neither it has been implemented nor have the rates been revised.

The Staff-Side has stated that if an employee is asked to work after hours the rate of OTA should be as per 7^th CPC pay scale. Staff-Side is of the opinion that overtime means working after office hours, and asking an employee to work beyond office hours automatically entitles him/her to this allowance. The over time rates should also be above the normal level. It was pointed out by them that as per 7^th CPC, an MTS is paid @ Rs.75/ hour; whereas overtime allowance is @ Rs. 15.85/- only. Even an outsider employed on casual basis is being paid hourly wages which are more than OTA. The Staff-Side is strongly of the view that if government is deploying a person on overtime work then he has to be paid at least according to the rate of salary which he is getting

(Action: JS (Estt.)

• Cash Handling Allowance (CHA)

Staff-Side has informed that the 7th CPC recommendation on its abolition is based on the fact that in most of the offices today salary disbursement is not made in cash. It is credited to the individual bank accounts. But cash transactions do take place in certain offices like the Post Offices where cash handouts are made under the Mahatma Gandhi National Rural Employment Guarantee Act. PLI is also another example. Therefore, if it is stopped all of a sudden, no person will show interest in working as cashiers and take the additional responsibility of handling huge amounts of cash. Therefore, the Staff-Side has contended that till all cash transactions are eliminated, CHA should continue.

It was also pointed out by them that this allowance depends on the amount of cash transaction; when the volume of cash transaction comes down, the allowance will also proportionately come down.

(Action: JS(Estt.)

• Uniform related allowances subsumed in a single Dress allowance (including shoes)

Staff-Side has informed that the 7^th Pay Commission has recommended that Persons Below Officers Rank (PBOR) should be given Dress Allowance @ Rs.10,000/- per month. There are 5 Ordnance Factories under Ministry of Defence where persons are exclusively deployed to produce special high altitude dresses for the combat forces of the army. 12000 employees are working in these 5 factories. Therefore, if a uniform rate like this is maintained, it will have an adverse impact on the quality of these high altitude uniforms and will thus jeopardise the safety of the armymen and the nation as a whole. Staff-Side is stated to have already made a request to M /o Defence not to implement this recommendation. Army has also taken a stand that this will result in substandard or sub quality material. So this recommendation on the Dress allowance for PBOR should not be implemented.

As far as Civilian employees are concerned, it has been stated that the 7th CPC has recommended four slabs of Dress Allowances for various categories. One of the categories is called ‘others’. Whereas, in the Department of Posts there are about 75,000 postmen and Multi Tasking Staff wearing uniform. There is no mention about these postmen and multi tasking staff in any of the categories shown by the Pay Commission. If it is presumed that they come under ‘Others’, then they will be getting Rs. 5,000 whereas at present they are getting around Rs. 7,000 plus washing allowance. As such a separate category should be there for postmen and MTS also and the allowance should be Rs.10,000/-

It has also been pointed out that there are many categories like canteen employees, security staff, chowkidars which have not been mentioned and who are eligible for uniform or uniform allowances. It has to be clarified whether these categories will be covered under ‘others’. Staff-Side has stated that whosoever is getting Dress Allowance as on today should continue to get that. Staff-Side has also informed that the recommendations on Dress Allowance have created a lot of discrimination among staff working in similar circumstances.

Staff-Side has also drawn attention to the Dress Allowance with respect to the Nursing Staff. It has been stated that earlier also Nursing Staff were not given normal washing allowance or dress allowance considering the importance or the peculiar conditions prevailing in hospitals. Now they have also been bracketed in the general category. They were getting Rs.750 as Uniform Allowance and Rs. 450 as Washing Allowance per month. Now there is no separate category that has been given to them. For them a different dispensation was made taking into account their special requirements because they work in such an environment where their uniforms require regular washing entailing a substantial expenditure. As these have not been accounted for in the 7th CPC, the nursing staff should have a special dispensation, as is strongly felt by the Staff-Side.

JS (JCA) has requested Staff-Side to submit a note on the justification or break-up of the amount of Rs.32,400(maximum) as suggested by them and the Staff-Side has agreed to provide the same.

Secretary, DOPT summed up the demands of the Staff-Side by observing that those who were getting Dress Allowances, their allowances should not come down. And the categories of the employees which had special dispensation in the past and have not been mentioned this time or have been clubbed together with other categories need clarification.

(Action: JS(JCA)/Staff-Side)

• Risk Allowance

The Staff-Side has informed that Ministry of Defence is engaged in arms and ammunitions manufacturing etc. In the process of manufacturing them, the staff engaged for this purpose, have to handle hazardous chemicals, acids and so many other poisonous combinations. Cabinet has approved 45 risk operations pertaining to Defence civilian employees. Apart from that, because of the technological developments taking place fast and as the requirement of the armed forces is increasing for getting modern equipments, ammunitions and explosives, new risk operations have also come into existence of which Ministry of Defence is aware and have recommended also accordingly. In spite of this, the existing Risk Allowance has been abolished by the Pay Commission. It has been pointed out by the Staff- Side that it has not been subsumed under the risk and hardship matrix. Rather it comes in the abolition list. In no matrix are the risk operations of Defence civilians are covered. Staff-Side has informed that they have discussed this with Defence Secretary and Defence Ministry is going to recommend in favour of its inclusion in one of the matrix.

In response to the query of Secretary, DOPT as to whether the activities which have been considered to be risky have all been identified, Staff-Side has clarified that it has been identified by a high level committee and approved by the Cabinet. 45 risk operations have been identified and approved. But within a period of 2 decades, lot of new ammunitions and new explosives have come in the arsenal, alongwith a lot of hazardous chemicals and acids. So, M/o Defence has again appointed a committee and they have identified that all these are additional risk operations over and above the 45 identified, where Defence Civilian employees are actively involved. But the Pay Commission has abolished Risk Allowance. So this has to be incorporated in one of the risk matrix.

(Action: JS(Estt.)

• Other Items

Staff-Side has pointed out that in the 7th CPC report it has been stated that any allowance not mentioned and hence not reported to the Commission shall cease to exist immediately. They have requested that this recommendation should be rejected. On the contrary, the administrative Ministries should come forward and recommend for their abolition or retention.

Staff-Side has also stated that 7th CPC has abolished all advances completely. Noting that we regularly celebrate a number of festivals like Diwali, Holi, Eid and keeping the general sentiment in mind, they are of the view that advances are very necessary. Moreover, these advances are required to be paid back to the government.

On Family Planning Allowance, the Staff-Side has stated that since the Government has not changed its Family Planning policy, the allowance should be continued. At least in the case of those people who were getting it they should continue to get as they have fulfilled all conditions when the allowance was granted. Otherwise there will be drop in their emoluments.

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