If implemented, than plan could lead to a longer work period in service for around 4 lakh non-combatants and save around Rs 4,000 crore in pension costs
Gradually increasing the retirement age of some non-combatants, the generation of internal resources for military housing in cantonments and prioritising hardware purchases are being discussed by Chief of Defence Staff (CDS) General Bipin Rawat and the three service chiefs to reduce the growing pension cost to the exchequer.
According to a report in the Hindustan Times, General Rawat is in favour of increasing the retirement age of certain classes of non-combatants and medical staff to 58 years from the current 39 to cut the pension bill.
The budget of military pension has mounted to Rs 1.3 lakh crore — around 0.5 percent of India Gross Domestic Product (GDP) — in financial year 2020-21, the report suggests. It was around Rs 41,000 crore in FY2010.
Additionally, an expense of Rs 6,000-7,000 crore is expected in June for equalisation of pension under the ‘One Rank, One Pension (OROP)’ scheme, the report adds.
Moneycontrol could not independently verify the report.
In the previous fiscal, the total pension bill was Rs 1.1 lakh crore. Moneycontrol could not independently verify the report.
The report adds that while the plan has not been approved yet. If implemented, it could lead to a longer period of work in service for around four lakh non-combatants and save around Rs 4,000 crore in pension cost. Changing of the retirement is, however, expected to be gradual.
Besides cutting pension costs, the armed forces may see reforms in military housing. The report suggests that with colonial bungalows may give way to vertical housing with the armed forces generating their own resources to fund these projects.
The armed forces could also witness changes in military hardware purchases with more focus being given to indigenisation. Eventually, the reforms would lead to setting up separate theatre commands.Exclusive offer: Use code "BUDGET2020" and get Moneycontrol Pro's Subscription for as little as Rs 333/- for the first year.
