Indian Defence Review

Introduction

A former colleague of mine said recently, “The CDS has very good ideas. But he is not able to sell them properly.” Perhaps, that it is the difference between battles lost or won – a commander unable to “sell” his idea to his subordinates and troops. However, whether the decisions have the primary aim of significantly reducing the Defence Budget is open in this write up [which is a historical list of “good ideas that didn’t sell properly” have caused avoidable co-morbidities of demoralisation and “how do we return this Product?”

The 3^rd CPC Report of 1974 in Vol III, Chapter 50, Paras 27 onwards states, inter alia, “We now deal with those groups of Service officers who have been provided with special scales of pay for certain reasons. The special groups can be divided into three broad categories – officers of (i) the flying branches of the Air Force and the Navy (ii) AMC/ADC/RVC and (iii) MNS… 

In Para 29, the 3^rd CPC stated, inter alia, “The starting salary of the Pilot Officer (equivalent to 2^nd Lt in the Army) is Rs 75 more than the standard rate for the rank. This lead in the pay is retained in the next rank of Flying Officer, but for the higher ranks, the pay scales conform to the standard Service scales ….except that the officers of the Flying Branch reach the prescribed stages of pay earlier than others. Thus, the maximum pay in the ranks of Flying Officer, Flight Lieutenant, Squadron Leader and Wing Commander is attainable earlier …..because it is considered to be in the Service interest to advance them to the senior ranks at a relatively younger age….”

In Para 31, it was stated, “We feel that a differential in pay in favour of officers of the Flying Branch should be continued considering the special reasons involved viz. the exceptional risks and demands of their work and the need for attracting persons of the requisite calibre to operational flying;…. “On the same basis we recommend the following scales for officers of the Naval Aviation Branch up to the rank of Commander …” 

Consequently, very junior officers (Plt Offrs and Fg Offrs) of the Flying Branch and (Sub Lts and Lts) of Naval Aviators branches (approx 400 newly commissioned officers & and an equal amount promoted to Lt/Lt (IN)/Fg Offr per year from 1963 to 1969 and 200 newly commissioned officers per year from 1970 to 1986 when the rank of 2^nd Lt and equivalent was abolished) earned as follows

It would be interesting to remember that the starting salary recommended by 3^rd CPC and approved by Govt for Group A including IAS was Rs 700 (Paras 8.52 to 8.57, Vol II, 4^th CPC Report).

However, Idiosyncratic Decision Syndrome appears to have intervened for the  4^th CPC’s Report Vol IV, Chapter 28, states

Para 28.10 states, inter alia, “Officers in specialised cadres like Army Medical Corps (AMC) , Army Dental Corps (ADC), Remount and Veterinary Corps (RVC), Flying Branch, Submarine Branch and Military Nursing Service (MNS) have a separate pay structure.”.

In ibid report, Para 28.11 it states, inter alia, the Services HQ “suggested that separate pay scales in respect of specialised cadres, flying branch in the case of Air Force and aviators and submariners in the case of Navy, may be dispensed with.”

How much did the Services/Defence Budget benefit from this “suggestion” for by 1986, there would have been only a few hundred officers of the ranks of Lts/ LT (IN)/Fg Offr in the Army Aviation Corps, Naval Aviators, Submarine, Flying Branches?           

Rank Pay Anomaly: – Prior to the 4^th CPC, officers up to the rank of Brigadiers were paid Special Disturbance Allowance “… granted in the year 1950 as a temporary measure to improve the earnings of Service Officers without interfering with the pay scales introduced on the recommendations of the Post War Pay Committee. At the same time, many of the ICOs were being brought down from their War-time pay scales of pay to the new scales and the grant of this concession among others helped to afford some relief to these officers (Para 13, Chapter 50, Vol III of 3^rd CPC Report).  However, 3^rd CPC and earlier ensured that payment of Rs 45 as SDA did not impinge on the pay of Maj Gen and above (Para 19, 23, 25, Chapter 50, Vol III of 3^rd CPC Report).

Services Pay Commission Cells appear to have lost the woods for the trees in that while removing the special groups’ pay scales (of a few hundreds by 1986), they missed the fact that with the introduction of Rank Pay the total emoluments of a Brigadier (Pay in the integrated scale of Rs 4950-5100 + Rank Pay Rs 1200 = Rs 6150-6300) would exceed the pay scale of hundreds of Maj Gens (Rs 5900-6700) & equivalents. Worse, that as soon as a Brig was promoted to rank of Maj Gen he would suffer a loss of pay!

The matter was rectified to a very limited extent in Air Vice Marshal S N Chaturvedi vs UoI (https://indiankanoon.org/doc/1539584/) in 1990. Finally, Maj A K Dhanapalan challenged the deduction of Rank Pay in 1996 and the dismissal of MoD’s Special Leave Petition in 2005 by the hon’ble Supreme Court opened the flood gates for litigation by several hundred similarly situated officers for the Apex Court to order in IA No. 9 of 2010 in Transfer Petition (Civil) No. 56 of 2007 on 04 Sep 2012 that the benefits may also be paid to thousands of officers of the ranks of Captains to Brigadiers. MoD issued orders initiating correction in 24 Jul 2014. 

Differential in Flying Pay 

In 1997, another Idiosyncratic Decision reared its head in the proposal for higher Flying Pay for Fighter Pilots mooted, reportedly by then Chairman COSC & CAS. One would remember that Flying Bounty was introduced in 1948 as an incentive for people join as aircrew and also acknowledged the higher risks entailed in military aviation.

The Fifth Central Pay Commission (5^th CPC) recorded in its Report as follows:-

“Flying Pay

150.2 Flying pay is granted to officers of the Flying Branch and technical officers and airmen performing air crew duties in the Indian Air Force and equivalent personnel in the Army and Navy. Flying Pay was earlier called Flying Bounty, and was introduced in 1948 to serve as an incentive to persons of the right calibre to join the flying branch for undertaking military flying with its attendant risks.”

However, it is reported that, on the insistence of the then Chairman COSC & CAS, the 5^th CPC recommended differential rates as follows for different types of aircrew.

150.7 ……..We have taken cognisance of the high degree of risk involved in fighter flying and the tremendous pressure on the pilot who has to operate with a high degree of motivation and precision and are convinced that fighter flying deserves a higher compensation.

150.8 Keeping all the above aspects in view, we propose to keep a distinction between fighter pilots and other flying personnel. We therefore recommend that the existing Flying Pay may be renamed as “Flying Allowance” and be enhanced in the following manner (Rs. per month): 

1. 1. 1. Fighter pilots 3000/-
      2. Other pilots and technical officers – 2400/- upto the rank of Gp. Captain
      3. Airmen Aircrew 1800/-

Dissatisfaction in the Air Force must have compelled a re-think and the GoI/MoD issued the following letter regarding Flying Allowance vide No. 1(26)/97/XXI/D(Pay/Services) dated the 29th February, 2000: –

I am directed to refer to this Ministry’s letters No. 1(22)/97/D(Pay/Services) and 3(4)/97/D(Pay/Services) both dated 8.1.1998 and to state that the issue regarding certain anomalies arising from the implementation of revised pay scales and allowances consequent to the V CPC award has been considered in the light of the recommendations of a Committee specially constituted on the above subject and it has been decided that the following shall be a revised rates of Flying Allowance: – 

Flying Allowance                                                 Rate

Flying Officer & equivalent                                  Rs 4500 pm

Flight Lieutenant & equivalent                             Rs 5500pm

Squadron Leader & to Gp Capt equivalent        Rs 7000 pm

Air Commodore & equivalent & above              Rs 5250 pm

An aside: – Interestingly, the hon’ble Supreme Court, on 11 Jul 2018, upheld on that Submarine pay of Chief Petty Officers paid up to and including in the 3^rd CPC dispensation must be counted as a part of Reckonable Emoluments to calculate pension. For more details please see Civil Appeal No. 10035 of 2010 available at: https://main.sci.gov.in/supremecourt/2010/32293/32293_2010_Judgement_11-Jul-2018.pdf. 

1986 and continuing 

The idiosyncrasy in the CPCs’ elucidations in  Para 2.3.12 of 6^th CPC Report; Para 5.2.8, 5.2.22, 6.1.28 to 6.1.31 of 7^th CPC Report why MSP should be limited to Brig and below has not been satisfactorily addressed by Services HQ. At the time of writing one AVM has successfully contested a case in the Armed Forces Tribunal and several Maj Gen & above have filed cases in the High Court of Punjab & Haryana.

Perhaps worries of an increase in the Defence Budget allocation for Pay are the reason. However, that does not seem to have worried Min of Fin/Other ministries who continue to pay NFU to an increasing number of officers (and pay last drawn including NFU counts towards pensions?) 

Canteen Services Department (CSD) Facilities

“Reduce the Defence Budget” idiosyncrasy appears to have started to reach feverish heights a couple of years ago when it was announced that a monetary limit would be imposed on groceries and one needs to register with a CSD canteen to avail reduced quota of “spirit of life” (perhaps rightly, smart card notwithstanding). Then came the restriction in purchase of new cars by means of a convoluted procedure that required approval by Army HQ, even though the individual would be making the payment.

All the while the Govt was crying itself hoarse that purchasing power needs to be increased so that the economy would improve and the GDP would come out of its depression (no pun intended). One may also factor in that profits of the CSD are paid into the Consolidated Fund of India and 50% is returned to MoD to be distributed as Grant in Aid to various URCs.

Income Tax on Disability Benefits of those who superannuated

Another idiosyncrasy of “Reduce the Defence Budget” appeared necessary (reportedly to remedy senior officers who forced medical authorities to place them in lower medical category and give benefit of disability benefits to them). So Services (who?) proposed to the Central Board of Direct Taxes (CBODT) to issue a circular (Unlucky No. 13 of 2019) taxing disability benefits of those patriotic (and nationalistic?) enough to continue to serve the Nation through the Services till superannuation instead of laughing all the way to the Bank by getting invalided out and escaping the tax net! The matter has been stayed by the hon’ble Supreme Court (https://www.thehindu.com/news/national/defence-ministry-directs-pcda-to-withdraw-contentious-disability-pension-order/article30972957.ece)

If the CDS felt there were some senior personnel took undue benefit of their positions to get disability benefits and superannuate, why not ask those “suspects” to undergo a medical examination during the next Life Certificate cycle and pursue means to rescind the disability benefits?

Why punish every one who survived with disability benefits to serve the Nation and Service till superannuation? Is this a fall back to NDA/IMA days when the course was punished when one Cadet/Gentleman Cadet bunked out?

Increasing retirement age Reducing Pension of personnel who leave Service prematurely

The decision appears to fit into the tradition of idiosyncrasies for the following reasons

(a) Just 16 years ago, the Army, based on a concept paper by Lt Gen Bagga persuaded the MoD to convene the Ajay Vikram Singh Committee (AVSC) and obtained Government of India (GoI) approval in 2005 for a younger Army/Armed Forces by accelerated promotions so as to have younger Armed Forces.

(b) Now, by curtailing the pension of those whose prospects of promotions have receded and have been prevented from proceeding on PMR are compelled to continue to serve till they serve 35 years or superannuate.

(c) But Services HQ are either not willing to take up the dormant (or is it already dead?) proposal of lateral placement in Para military forces proposed by the 5^th, 6^th and 7^th CPC,

Surely the hierarchy under the CDS is aware that

(i) With AVSC, officers up to the rank of Lt Col and equivalent are promoted on a time scale basis.

(ii) Having served a few years in the rank of Lt Col and equivalent, officers by then are just about 34 to 38 years of age (depending on the Arms/Service/Branch), they are looking for promotion/career advancement and not wish to be promoted to the rank of Col (TS) and equivalent.

(iii) Discouraging Lt Cols and equivalents from seeking Premature Retirement (PMR) (due to inability of the “System” to provide adequate promotion avenues or lateral placements in other Govt organisations) by the disincentive of reduced rate of pension, older officers and Persons Below Officer Rank (PBOR) “will hang around,” with resultant disincentive and lowering of morale.

And to read that the proposals are being considered as welfare measures is just going downhill from the sublime to the ridiculous!(https://economictimes.indiatimes.com/news/defence/new-proposals-to-raise-retirement-age-aimed-at-welfare-of-frontline-troops-cds-rawat/articleshow/79058127.cms)

While on the subject of increasing retirement ages as a means to “effect savings”(sic) one also needs to check the budgets of 1998 and 1999 to see how much of savings occurred when retirement ages were hiked up by two years.

From Ministry of Finance archives it is seen that the Defence pension budget for 1997-98 was originally projected to be Rs 4947 crore and the revised budget estimate for FY 1998-99 was shown to be Rs 5923 crore, an increase of Rs 976 crore. However, the Defence Pension budget almost doubled to Rs 10770 crore in FY 2000-1 when those whose service was extended by two years retired (https://www.indiabudget.gov.in)

Just Asking – Is the responsibility of Savings on the Defence Services alone?

While the CDS is reportedly fixated on reducing the pay and pension burden on India’s Defence Budget, there appears to be another India that begs the question – How much of the Union of India’s Budget on pay and pensions has been saved/reduced by granting Non-Functional (Financial) Up gradation to thousands in the BSF, CRPF and 58 Group ‘A’ Organised Services up to the Higher Administrative Grade (HAG)?

In conclusion

Finally, why doesn’t the CDS, who has the ears of the Executive,

(a) Seek separation/compartments in the Defence Budget as follows: –

(i) Part I – just for modernisation

(ii) Part II – Pensions of Armed Forces Veterans and Family pensioners and

(iii) Part III – Defence Civilians pensioners of Ordnance Factories, DRDO, MES, Army Ordnance Corps, Army Supply Corps, Naval Dockyard, Base Repair Depots, Equipment Depots, and Army Base Workshops etc and their family pensioners?

(b) Or merge Defence Pension budgets with the pensions of Civilians under the Ministry of Finance’s Central Pension Accounting Office (CPAO)? As it is the Defence Accounts Department (DAD), which included the CGDA is paid from the MoF budget. (https://idsa.in/issuebrief/estimating-india’s-defence-manpower-04820).

Railways, Telecommunications etc, whose pensioners are not provided services by CPAO may be because the Railways and Telecom earn profits. Similarly, Deptt of Defence Production under the MoD may have its set of pensioners from Ordnance Factories, DRDO, MES, Army Ordnance Corps, Army Supply Corps, Naval Dockyard, Base Repair Depots, Equipment Depots, and Army Base Workshops.

Finally, Civilians and Defence Pay and Pensions improvements are in the remit/ToR of a common Central Pay Commission. MoF mandates (as per RTI disclosures) that proposals for changes in Pay and Allowances of Defence Forces have to be vetted by MoD/Fin, a Deptt of DAD paid pensions by MoF, before being approved by the Ministry of Finance!