Meeting of IESM Delegation with RM Sh Manohar Parrikar on 2 Mar 2015

Meeting of IESM Delegation with RM Sh Manohar Parrikar on 2 Mar 2015

Dear Members

IESM delegation of five members met RM Sh Manohar Parrikar today at 1400 h. The salient points of the issues discussed in the meeting are given below and are attached. I am sure this will satisfy most of the queries of veterans arising out of budget speech given on 28 Feb 15. This is now clear that one needs to be optimistic and OROP will be out soon. However hold your celebrations till Notification of OROP is out as there is many a slip between the cup and the lip.

Meeting of IESM Delegation with RM Sh Manohar Parrikar on 2 Mar 2015

IESM contacted Sh Manohar Parrikar Raksha Mantri at the end of the budget presented on 28 Feb 15 and communicated to him that ESM in general are disappointed because OROP has not been mentioned in the budget speech of Finance Minister and allocation of funds for OROP has not been announced. RM explained on telephone that OROP has been approved in two budgets and hence it is considered approved and therefore there was no need to mention in the budget speech. He was kind enough to invite the IESM delegation at 1400h on 2 March 15 to clear any doubts if we had any.

Following five members of IESM met Sh Manohar Parrikar RM at 1400h on Monday 2 March 2015.

1. Maj Gen Satbir Singh SM

2. Col Kirit Joshipura

3. Col Anil kaul VrC

4. Wg Cdr CK Sharma

5. Gp Capt VK Gandhi VSM

6. Major DP Singh was also invited by RM for discussion on disability pension issue.

RM made everyone comfortable in the beginning itself that OROP for Armed Forces and Ex-servicemen is NDA Government’s commitment and he has worked out the expenditure for the OROP. He advised that there was no need to cover this issue in budget presented by NDA Government on 28 Feb 15 as it already stands approved by Parliament as part of budget for financial year 14-15. He confirmed that he had discussed the issue with officers of MOD and ironed out all issues of OROP. He also confirmed that OROP is genuine demand of Armed Forces and must be met in full; hence there is no difference in thinking of Armed Forces and MOD. Accordingly file has been prepared and is in process for approval from Ministry of Finance. After approval of the file from Finance Minister, it will be put up for approval of CCPA (Cabinet Committee for Political Affairs). RM has confirmed that MOD has recommended giving OROP for X group and Y group separately. He also confirmed that all ranks including widows have been included in the OROP. He further confirmed that he is attempting to meet the date line for issuance of Government letter (OROP Notification) given by him on 1 Feb 15 meeting with IESM delegation.

There was no doubt left in our minds after such a clear statement by RM and IESM delegation was convinced that OROP is now in safe hands will see the day light soon. General Satbir Singh thanked him and told him that it is first time that the demands of ESM are being given proper consideration and attention. IESM delegation then discussed following issues with RM.

1. Increase in Widow’s pension w.e.f 24 Sep 12; General Satbir Singh informed him that widow’s pension was not increased in 2012 when pension for all ranks was increased as per recommendations of 6 CPC. Widows must be given that increase in pension. RM expressed concerned on this issue and asked the delegation to give him the note for his consideration.

2. Major’s Pension Retired pre 1996; It was brought to RM’s attention that MOD is not paying Lt Col pension to Major rank officers who retired pre 1996 on completion of 21 years of service. Major Thomas of pre 1996 retirement had gone won the case in AFT and had been paid enhanced pension. It should be applicable for all Majors who had retired pre 1996 and had completed 21 years of service. RM asked for a detailed note on the issue for his consideration.

3. Major’s Pension who had retired on completion of 20 yrs but with less than 21 yrs of service; RM was informed that there will be only few hundred Majors who will fall in that category and MOD must consider giving them Lt Col Pension with Major’s grade pay as a special case. RM demanded a paper on this issue also for his consideration.

4. IESM will be sending the detailed paper on above issues to RM at the earliest.

IESM delegation was encouraged with the response and encouragement given by RM. One can now say that OROP is in safe hands will soon be approved.

Gp Capt VK Gandhi VSM

Gen Sec IESM

2 Mar 2015

Source: www.bcvasundhra.blogspot.in

Budget 2015 - Provision for 7th Pay Commission

Provision for 7th Pay Commission in Budget 2015-16

The Budget is also gravely silent on fund allocations for the Seventh Pay Commission award, due for implementation in 2016. The budgetary documents are stressing upon likely burden from the report of the 7th Pay Commission. However the funds are allocated for Commission’ss establishment. The extract of budgetry documents which are related to 7th CPC are mentioned below:-

Speech of Finance Minister – Heading Fiscal Roadmap para 23:-

Budget 2015-2016

Speech of

Arun Jaitley

Minister of Finance

February 28, 2015

Fiscal Roadmap

23. I want to underscore that my government still remains firm on achieving the medium term target of 3% of GDP. But that journey has to take account of the need to increase public investment. The total additional public investment over and above the RE is planned to be `1.25 lakh crore out of which `70,000 crore would be capital expenditure from budgetary outlays. We also have to take into account the drastically reduced fiscal space; uncertainties that implementation of GST will create; and the likely burden from the report of the 7th Pay Commission. Rushing into, or insisting on, a pre-set time-table for fiscal consolidation pro-cyclically would, in my opinion, not be pro-growth. With the economy improving, the pressure for accelerated fiscal consolidation too has decreased. In these circumstances, I will complete the journey to a fiscal deficit of 3% in 3 years, rather than the two years envisaged previously. Thus, for the next three years, my targets are: 3.9%, for 2015-16; 3.5% for 2016-17; and, 3.0% for 2017-18. The additional fiscal space will go towards funding infrastructure investment.

***

In document to study Medium Term Fiscal Policy Statement for further 3 years: Para 12:-

MEDIUM TERM FISCAL POLICY STATEMENT

12. However, it is pertinent to note that the resource base of the Centre will be constrained following the implementation of the FFC. With steep jump in the sharing pattern of tax revenues, the revenues of the States, which is surplus in most of the cases, will be further augmented on one side and the Centre will face resource crunch in one of the difficult phases of consolidation underway. While, the revenues are constrained in the FY 2015-16, it would continue over the medium term framework in FY 2016-17 and 2017-18.

Moreover, the 7th Pay Commission impact may have to be absorbed in 2016-17. The phase of consolidation, extended by one year, will be also be spanning out in the period. Thus, in the medium term framework the fiscal position will continue to be stressed. However, with necessary corrections on the Plan side under the new paradigm of Centre-State fiscal relationship and reforms on the subsidies, with better targeting and policy initiatives, it is expected that over the medium framework much of the fiscal correction would have taken shape, leaving room for building up better fiscal management thereupon. The change is monumental; and needs dextrous manoeuvring in this initial phase.

(c) Pensions

42. The expenditure on pension payments of the Central Government includes both defence as well as civil pensions. Pension payment, in nominal terms was estimated at ` 74,076 crore in RE 2013-14 and at the year-end it was accounted at ` 74,896 crore. In BE 2014-15, pension payment in nominal terms was estimated at ` 81,983 crore. In RE 2014-15, it has been revised at ` 81,705 crore. The pension payment of Central Government for the past few years has been growing faster than the salary expenditure. The main reason for this is that there is an increase in number of pensioners due to higher retirements and increased life expectancy. In view of the likely impact of VII Pay Commission, Pension payment of the Government likely to be about 0.7 per cent of GDP in FY 2016-17 and FY 2017-18 respectively

***

In document to study Medium Term Fiscal Policy Statement for further 2 years:

FISCAL POLICY STRATEGY STATEMENT

Expenditure Management Commission:

37. While Government has managed to control the expenditure through rationalization in the fiscal consolidation phase, quality of expenditure remains an area that needs to be addressed. The ongoing fiscal consolidation has been successful in taming the fiscal deficit; however there is still imbalance in the public finance on the revenue side. As discussed in earlier section, concerted efforts are required to accomplish the target set for the revenue deficit and effective revenue deficit in the new FRBM regime. This entails structural changes in the Plan spending and definitive measures to contain Non-Plan spending within sustainable limits. Moreover, in the medium term, award of VII Pay Commission and XIV Finance Commission pose significant downside risk to Public Finance. Thus, time has come to look into the places where Government spends money and output achieved from it. Government will constitute an Expenditure Management Commission, which will look into various aspects of expenditure reforms to be undertaken by the Government.

MEDIUM TERM FISCAL POLICY STATEMENT

(c) Pensions

39. The expenditure on pension payments of the Central Government includes both defence as well as civil pensions. Pension payment, in nominal terms was estimated at ` 74,076 crore in RE 2013-14 and at the year end it was accounted at ` 74606 crore, marginally above the RE figure. In BE 2014-15, pension payment in nominal terms estimated at `81,983 crore. The pension payment of Central Government for the past few years has been growing faster than the salary expenditure. The main reason for this is that there is an increase in number of pensioners due to higher retirements and increased life expectancy. Accordingly, keeping past trend in view the Pension Expenditure of the Government has been projected to grow at 10.4 per cent in FY 2015-16. In view of the likely impact of VII Pay Commission, higher growth is assumed in FY 2016-17.

Read more: www.karnmk.blogspot.com