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One Rank One Pension Scheme: OROP Review

OROP or One Rank One Pension Scheme is government pensioning reform movement introduced in 2015. It states that any individual who has retired from Indian Civil Services with the same rank are liable for the same amount of pension irrespective of the age of retirement.

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Why Was OROP Introduced?

This scheme was introduced to avoid a discrimination in pension received by soldiers who retired earlier and soldiers who retired more recently. The pension system is dependent on the last salary received and with the introduction of pay commissions salaries have increased over the time. Thus an Army General who retired in 2015 would get more pension than an Army General who retired 1982. The OROP helped bridge this pension gap. This Armed Forces pension scheme was extended to all Indian Civil Services.

What is OROP?: Example and Illustration

Suppose an Army Major has retired back in the late 1970’s. Assume possible pension amount to be 50% of the last drawn salary. Due to inflation condition that was seen over the years in the market, the pension of the Army Major increased periodically. Now an Army Major has retired in 2015. Due to inflation, the officer’s salary is already higher. After retirement, the Major is pensioned at the same rate of 50% of the last drawn salary. Thus the initial pension amount is much greater. This amount now increases over the years due to inflation. So the individuals of the same rank would have different pensions.

This difference in pension did not matter much in other government organizations. But in Armed Forces where the retirement age is less and the rank holds far greater importance, the difference in pension was striking.

Advantages Of OROP

  • The OROP Scheme compensated for the fact that soldiers retired at a much younger age than other citizens. Thus their monetary needs and dependency on the pension system is higher. In this case, OROP makes sure that soldiers who have retired with the same rank status get a fair pension and do not suffer due to inflation.
  • OROP Scheme helps early retired government personnel to gain the same advantage of pay commissions like the more recently retired government personnel. This stands especially in the case of Armed Forces.

Disadvantages of OROP

  • All Civil Services are liable to OROP causing a huge amount to be invested in government job sectors. Though this scheme profited ex-servicemen, the other citizens who work for government organizations are dissatisfied. Thus in later years, this may cause a public outrage, meaning that the government will have to comply with the needs of other pensioners and extend OROP for them. This will result in a huge amount of wealth being drained out.
  • Pensioning the Armed Forces according to the OROP Scheme has resulted in raising the Defence Pension Budget to increase by approximately 4700 crores. Over the years the inflation and introduction of pay commissions have caused the salary of Civil Services officers to increase. Thus periodically more money has to be invested by the government.

OROP News Updates

Rahul Gandhi and Kejriwal claims that Modi has been lying on OROP. According to them, Army officials were fooled by the name of One Rank One Pension Yojana. They are not receiving any updated pension. – Is this True?

No. People have started getting a higher pension from the June 16, as promised by the Government. For people to get the benefits of higher pension, they should have done a service of 20 years as commissioned officers, and 15 years for the rest categories.

What should one do if they are not getting the higher amount as promised in OROP Scheme?

Instead of going to banks, you should connect with your relevant command. They should be able to help you with this. Please mind the pension pay orders comes from the command, and banks have no role to play in it.

OROP Facts

One Rank One Pension was already in place in 1973 before Mrs. Indira Gandhi stopped it when she was the then PM of India.

Indian Congress ruled for almost 30 years but never implemented OROP back.

Narendra Modi, after almost more than three decades, re-implemented OROP.

Still, out of 20.6 lakh Army personal, nearly one lakh people are still deprived of getting benefits of OROP Yojana due to various limitations but Defence Minister Manohar Parrikar has promised to solve the issue as early as possible (hopefully by February end).

Was there any change made by the Indian Government in the proposed OROP scheme?

Yes, a little. Before coming to the power, Prime Minister Narendra Modi had promised that they would implement OROP when they come to power. Once Narendra Modi became the Prime Minister, he had to fulfill his promises. But in reality, it was a lot of burden for the Indian Government. So to reduce the burden, they made a small change. Those Army Men, who opted for voluntary retirement were kept out of the benefits under the scheme.

This could, however, backfire the Indian Government. Many Army men used to opt for voluntary retirement, once they reached the pension permissible stage. As a result, new recruitment was possible. Now to get the benefits of One Rank One Pension Scheme, Army personnel would wait until their service period gets over and not take any voluntary retirement.

Suicide over OROP Scheme

If One Rank One Pension Scheme was for the benefit of the Indian Army, why did the ex-Jawan opt for suicide?

Subedar Ram Krishna Grewal, an ex-Army personnel, had taken retirement in 2004. Before the OROP scheme was implemented, he was getting a pension of Rs. 14,000 every month. Post OROP implementation, he was entitled to receive Rs. 28,000 INR per month. However, he only received Rs. 23,000 INR (Rs.5,000 less than what he should have got).

When he approached the SBI bank, the bank officials could not help him. As a result, he wrote a letter to the Defence minister Mr. Manohar Pariker, and committed suicide the very next day.

When enquired, it was found that due to a technical glitch, the bank showed miscalculated amount. Centre had already made all the clearance from their side.