NEW DELHI: Three million Indian army veterans won a decades-long battle Saturday to change the way their pensions are calculated, as the government bent to protesters’ demands and announced it would overhaul the controversial scheme.
India’s armed forces personnel, who typically retire earlier than other public sector workers, have mounted fierce opposition in recent months to the current pension scheme, which is based on their salary when they retire.
They argue this leaves them vulnerable to inflation eroding their livelihoods and say it is unfair that a soldier who retired recently should receive a larger pension than one who left service earlier.
Under the newly agreed ‘One Rank, One Pension’ (OROP) deal, ex-servicemen will now receive a pension based on 2013 salaries, to be re-fixed every five years — irrespective of when they retired.
“Despite the financial burden, the government of India has taken the decision to implement OROP,” Defense Minister Manohar Parrikar said at a press conference in New Delhi on Saturday.
The scheme will cost 80 billion rupees – 100 billion rupees ($1.2 billion – $1.5 billion), he said. Military pensioners will receive arrears dating back to July 2014.
“Now that the issue of OROP is hopefully behind us, I appeal to the veterans to continue to contribute to the vital task of nation building and development,” Parrikar said.
Introducing OROP was one of Prime Minister Narendra Modi’s key pledges as he led the Bharatiya Janata Party’s successful campaign for last year’s general election.
Veterans have fought for the OROP scheme for four decades but protests have intensified in recent months, with ongoing rallies in New Delhi and several protesters going on hunger strike.
Observers say the move could open the door for workers in other state-run industries such as railways to demand similar reforms.
India has one of the world’s largest armies, with around 1.32 million active personnel and 2.14 million reservists.
Retirement age varies with rank, with the maximum age of service ranging from 56 to 62 years, according to the Indian Army website.