One Rank One Pension (OROP) scheme is a welfare measure that aims to ensure equal pension to defence personnel of the same rank with the same length of service, regardless of their date of retirement. The implementation of this scheme faced several challenges due to financial, administrative, and legal issues.
What is OROP?
Before the implementation of OROP, the computation of pension was linked to the pay drawn by the personnel in a particular pay scale at the time of his/her retirement. This led to a gap in the pension of the past and present retirees as pay scales are revised to the higher side generally on the recommendation of Pay Commissions. Hence, the aim of OROP is to bridge the gap between the rates of pension of current and past pensioners at periodic intervals.
The scheme was implemented from July 1st, 2014 with 2013 as the base year. The armed forces personnel who retired by June 30, 2014, are covered under the scheme, and the pension of past pensioners was re-fixed on the basis of the pension of retirees of calendar year 2013. The Department of Ex-Servicemen Welfare, Ministry of Defence is the implementation agency for OROP.
Challenges faced by OROP
Financially unsustainable
One of the major challenges faced by OROP is that meeting the demand would be financially unsustainable. This is because soldiers retire early and remain eligible for pension for much longer than other employees. The actual expenditure of the Defence Ministry on pensions was Rs 1.18 lakh crore in 2019-2020 and Rs 1.28 lakh crore in 2020-2021. The Defence Ministry’s pension-to-budget ratio is the highest among all ministries, and pensions are more than one-fifth of the total defence budget. Thus, the implementation of OROP puts a significant strain on the Defence Ministry’s finances.
Administrative issues
The implementation of OROP also faced administrative challenges. It was estimated that a one-time payout of Rs 83,000 crore would be needed to clear all past issues. However, every time a new pay commission came, it would lead to substantial payouts to bring parity. This means that the implementation of OROP would require the continuous allocation of funds, which is a challenge for the government.
Legal issues
Another challenge faced by OROP is the possibility of similar demands by other government employees, especially paramilitary forces. The Supreme Court’s recent decision to allow the government to pay ₹28,000 crore in instalments in arrears due to veterans under the OROP scheme has set a precedent that could lead to similar demands from other government employees.
Why In News
The Supreme Court’s decision to allow the government to pay the arrears in instalments has provided some relief to the financial burden faced by the government in implementing the One Rank One Pension (OROP) scheme. However, the implementation of the scheme continues to face significant financial and administrative challenges.
MCQs aboutOne Rank One Pension (OROP) Scheme
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When was the OROP scheme implemented?
A. July 1st, 2013
B. July 1st, 2014
C. July 1st, 2015
D. July 1st, 2016
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What is the biggest challenge faced by OROP?
A. Legal issues
B. Administrative issues
C. Financial unsustainability
D. Lack of awareness about the scheme
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What is the potential impact of the Supreme Court’s decision on OROP?
A. It could lead to similar demands from other government employees
B. It could reduce the pensions of current pensioners
C. It could lead to a decrease in the number of eligible pensioners
D. It could lead to the discontinuation of the OROP scheme
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What is the primary aim of the One Rank One Pension (OROP) scheme?
A. To ensure equal pay for all government employees
B. To bridge the gap in pension rates between current and past pensioners
C. To provide special benefits to retired paramilitary personnel
D. To increase the defence budget
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