The Union Cabinet approved a revision to the pensions provided to retired military officers and their families under the One Rank One Pension (OROP) scheme on Friday, at an increased cost of Rs 8,450 billion annually and Rs 23,338 billion in arrears.
The Cabinet authorised the 1 July 2019 rise during a meeting presided over by Prime Minister Narendra Modi.
According to a government statement, the pensions of former retirees will be recalculated based on the average of the minimum and maximum pensions of 2018 retirees from the same rank and duration of service.
The modification would be applied to all retired military employees through June 30, 2019, excluding those who retired prior to July 1, 2014. The government stated that approximately 25.13 million pensioners, including 4.52 million more recent retirees, and their families would gain from the modification.
“Those receiving above-average pensions will be protected. The payment would also be extended to family pensioners, including war widows and retirees with disabilities, according to the statement.
The arrears will be paid in four semi-annual instalments, with the exception of individuals who get a special, liberalised family pension and valour award recipients, who will receive it in a single instalment.
The overall arrears from July 1, 2019 to June 30, 2022 totaled Rs. 23,638 crore, which was “in addition to the continuing expenditure on account of OROP,” according to the statement.
“The government made the historic decision to implement OROP for defence services personnel/family pensioners and published a policy letter on November 7, 2015 for pension revision effective July 1, 2014.” The aforementioned policy letter stated that the pension would be recalculated every five years in the future. In eight years, the installation of OROP has cost around Rs 57,000 crores, or Rs 7,123 crores annually.