NFIR Demands Scrapping of New Pension Scheme (NPS) and grant of “One Rank – One Pension” to Railway Employees

NFIR Demands Scrapping of New Pension Scheme (NPS) and grant of “One Rank – One Pension” to Railway Employees.

Press Statement of Dr.M. Raghavaiah, General Secretary, NFIR

The National Federation of Indian Railwaymen while welcoming the Government’s announcement for introduction of “One Rank – One Pension” for ex-servicemen, urges upon the Hon’ble Prime Minister to take steps for granting similar pensionary benefits to the Railway employees also, the duties of Railway employees are hazardous, risky and complex. They work at over 8,000 Railway stations covering the Railway Tracks of over 65,000 kms. Over 85% of Railway employees perform duties at remote places, extremist infested areas and places where no township or medical or drinking water or schooling fbcilities exist. Like Army, Railway employee cannot leave their post till another employee takes over the charge. The Railway tracks are maintained by the employees facing inclement weather conditions and working under open sky akin to that of defence personnel. On an average 800 Railway employees get killed per year in the course of performing duties and nearly 3000 sustain injuries while on duty.

For ensuring uninterrupted services the Railway employees are required to be on high alertness at all times. The Railway employees maintain high degree of discipline and efficiency to ensure that the Rail Transport System functions without interruption. The Chairman of the Railway Safety Review Committee” Justice H.R. Khanna (Retired Supreme Court Judge) had observed in his report that the working of the Railway system is more like armed forces, thus historically the Indian Railways functions differently from other Government Institutions.

The uniqueness in duties being performed by Railway employees is unmatched as these employees are involved in safe and efficient train operations more particularly the statf like Train Controllers, Station Masters, Electric Signal Maintainer. Technical Staff, Loco pilot. Guards.

Technical Supervisors whose duties and responsibilities are similar to that of defence personnel.

Indian Railways plays crucial role not only for the economic development of the country but also for ensuring rapid movement of Army, Military Hardware to the Borders and rises to the occasions when the security of the country is at stake. Railway employees face war like situation in their day-to-day working i.e. breaches, bandhs. civil disobedience movements. accidents etc.. and ensure maintaining the supply line all throughout.
It is unfortunate that the Railway employees have been subjected to injustice by governing them under New Pension Scheme with effect from January, 2004, Railwaymen’s demand for abolition of New Pension Scheme is unresolved even though Railway Minister Mallikarjun Kharge had recommended for exemption of Railways from New Pension Scheme.

I therefore, appeal to the Prime Minister of India to scrap New Pension Scheme in Railways and grant “One Rank – One Pension” Scheme to the Railway employees as has been agreed to in the case of retiring defence personnel.

Source: NFIR

Seventh Pay Commission is no ogre: T.T. Ram Mohan

Seventh Pay Commission is no ogre: T.T. Ram Mohan

The report of the Seventh Pay Commission (SPC) is set to be released soon. The new pay scales will be applicable to Central government employees with effect from January 2016. Many commentators ask whether we need periodic Pay Commissions that hand out wage increases across the board. They agonise over the havoc that will be wrought on government finances. They want the workforce to be downsized. They would like pay increases to be linked to productivity. These propositions deserve careful scrutiny. The reality is more nuanced.

Critics say we don’t need a Pay Commission every ten years because salaries in government are indexed to inflation. At the lower levels, pay in the government is higher than in the private sector. These criticisms overlook the fact that, at the top-level or what is called the ‘A Grade’, the government competes for the same pool of manpower as the private sector. So do public sector companies and public institutions — banks, public sector enterprises, Indian Institutes of Technology (IITs), Indian Institutes of Management (IIMs) and regulatory bodies — where pay levels are derived from pay in government. 

The annual increment in the Central government is 3 per cent. Adding dearness allowance increases of around 5 per cent, we get an annual revision of 8 per cent. This is not good enough, because pay at the top in the private sector has increased exponentially in the post-liberalisation period.

Competition for talent

A correct comparison should, of course, be done on the basis of cost to the organisation. We need to add the market value of perquisites to salaries and compare them with packages in the private sector. We cannot and should not aim for parity with the private sector. We may settle for a certain fraction of pay but that fraction must be applied periodically if the public sector is not to lose out in the competition for talent.

True, pay scales at the lower levels of government are higher than those in the private sector. But that is unavoidable given the norm that the ratio of the minimum to maximum pay in government must be within an acceptable band. (The Sixth Pay Commission had set the ratio at 1:12). Higher pay at lower levels of government also reflects shortcomings in the private sector, such as hiring of contract labour and the lack of unionisation. They are not necessarily part of the ‘problem with government’.

 Perhaps the strongest criticism of Pay Commission awards is that they play havoc with government finances. At the aggregate level, these concerns are somewhat exaggerated. Pay Commission awards typically tend to disrupt government finances for a couple of years. Thereafter, their impact is digested by the economy. Thus, pay, allowances and pension in Central government climbed from 1.9 per cent of GDP in 2001-02 to 2.3 per cent in 2009-10, following the award of the Sixth Pay Commission. By 2012-13, however, they had declined to 1.8 per cent of GDP.

This happened despite the fact that the government chose to make revisions in pay higher than those recommended by the Sixth Pay Commission.

Today, Central government pay and allowances amount to 1 per cent of GDP. State wages amount to another 4 per cent, making for a total of 5 per cent of GDP. The medium-term expenditure framework recently presented to Parliament looks at an increase in pay of 16 per cent for 2016-17 consequent to the Seventh Pay Commission award. That would amount to an increase of 0.8 per cent of GDP. This is a one-off impact. A more correct way to represent it would be to amortise it over, say, five years. Then, the annual impact on wages would be 0.16 per cent of GDP.

The medium-term fiscal policy statement presented along with the last budget indicates that pensions in 2016-17 would remain at the same level as in 2015-16, namely, 0.7 per cent of GDP. Thus, the cumulative impact of any award is hardly something that should give us insomnia.

There are a couple of riders to this. First, the government is committed to One Rank, One Pension for the armed forces. This would impose an as yet undefined burden on Central government finances. Second, while the aggregate macroeconomic impact may be bearable, the impact on particular States tends to be destabilising.

The Fourteenth Finance Commission (FFC) estimated that the share of pay and allowances in revenue expenditure of the States varied from 29 per cent to 79 per cent in 2012-13. The corresponding share at the Centre was only 13 per cent. The problem arises because since the time of the Fifth Pay Commission, there has been a trend towards convergence in pay scales. The FFC, therefore, recommended that the Centre should consult the States in drawing up a policy on government wages.

Downsizing needed?

It is often argued that periodic pay revisions would be alright if only the government could bring itself to downsize its workforce — by at least 10 to 15 per cent. From 2013 to 2016, the Central government workforce (excluding defence forces) is estimated to grow from 33.1 lakh to 35.5 lakh. Of the increase of 2.4 lakh, the police alone would account for an increase of 1.2 lakh or 50 per cent. What is required is not so much downsizing as right-sizing — we need more doctors, engineers and teachers.

Downsizing of a sort has happened. The Sixth Pay Commission estimated that the share of pay, allowances and pension of the Central government in revenue receipts came down from 38 per cent in 1998-99 to an average of 24 per cent in 2005-07. Based on the budget figures for 2015-16, this share appears to have declined further to 21 per cent. In financial terms, this amounts to a reduction of 17 percentage points over 17 years or an annual downsizing of 1 per cent. It’s a different matter that it is not downsizing through reduction in numbers of personnel.

It is often said that pay increases in government must be linked to productivity. We are told that this is where government and the private sector differ hugely. However, the notion that private sector pay is always linked to productivity is a myth. In his best-selling book, Capital in the 21st Century, economist Thomas Piketty argues that the explosion in CEO pay in the West has been increasingly divorced from performance. He also argues that the emergence of highly paid “supermanagers” is an important factor driving inequality in the West.

We are seeing a similar phenomenon in the private sector in India. The serious public policy challenge, therefore, is not so much to contain a rise in pay in the public sector as finding ways to rein in pay in the private sector. It is also ironical that people should harp on linking pay to performance in the public sector when high-profile firms in the private sector such as Google and Accenture are turning away from such measurement.

A better idea would be to conduct periodic management audits of government departments on parameters such as cost effectiveness, timeliness and customer satisfaction.

Improving service delivery in government is the key issue. Periodic pay revision and higher pay at lower levels of government relative to the private sector could help this cause provided these are accompanied by other initiatives. The macroeconomic impact is nowhere as severe as it is made out to be. (T.T. Ram Mohan is professor at IIM, Ahmedabad)

Read at: The Hindu

Small issues in OROP will be dealt in future: Defence Minister

Small issues in OROP will be dealt in future: Defence Minister

Defence minister Manohar Parrikar on Sunday said there might be a few small issues pertaining to implementation of ‘One rank, one pension’ (OROP) scheme, which over time will get automatically addressed.

“OROP as a principle has been accepted, full financial requirements have been fulfilled. There might be a few small issues which over a period of time will get automatically addressed,” he told reporters here.

Parrikar said the issue has more or less been resolved.

“According to me the issue is more or less resolved, have you ever seen that 100 per cent things are fulfilled to everyone’s satisfaction?,” Parrikar said.

Prime Minister Narendra Modi today made it clear that the armed forces jawans who have had to give up their jobs prematurely would be covered by OROP benefits announced by the government on Saturday. Welcoming the statement the agitating ex-servicemen decided to call off their hunger strike but said would continue their protest till all the “sticky” issues are resolved.

Maj Gen (retd) Satbir Singh, leader of the association leading the agitation, said the protest will continue till four specific points raised by the ex-servicemen are not accepted by the government.

One of them was revision of pension every two years but the government has decided to revise pension every five years.

PTI

Spotlight of One Rank One Pension

Spotlight of One Rank One Pension

In simple terms, OROP implies that uniform pension be paid to the Armed Forces personnel retiring in the same rank with the same length of service, regardless of their date of retirement. Future enhancements in the rates of pension would be automatically passed on to the past pensioners. This implies bridging the gap between the rate of pension of current and past pensioners at periodic intervals.

Under this definition, it has been decided that the gap between rate of pension of current pensioners and past pensioners will be bridged every 5 years.

The benefit will be given with effect from 1st July, 2014. The present government assumed office on 26th May, 2014 and therefore, it has been decided to make the scheme effective from a date immediately after.
Arrears will be paid in four half-yearly instalments. All widows, including war widows, will be paid arrears in one instalment.

To begin with, OROP would be fixed on the basis of calendar year 2013.

Pension will be re-fixed for all pensioners retiring in the same rank and with the same length of service as the average of minimum and maximum pension in 2013. Those drawing pensions above the average will be protected.

Personnel who voluntarily retire will not be covered under the OROP scheme.

In future, the pension would be re-fixed every 5 years.

No VRS in defence services and so OROP will be applicable in PMR (Pre-mature Retirement)

No VRS in defence services and so OROP will be applicable in PMR (Pre-mature Retirement)

Govt to come up with clarification on OROP: Ex-servicemen

Leaders of agitating ex-servicemen over OROP met Defence Minister Manohar Parrikar tonight after which they said the government was likely to come out with a “clarification” on its applicability to those who have opted for premature retirement. Maj Gen (retd) Satbir Singh, who met the Minister along with few others, for the second time today, said the veterans would take a call on continuance of the agitation, that entered its 84th day, after a core committee meeting of the veterans.

“Defence Minister has confirmed that there is no VRS in defence services and so OROP will be applicable in PMR (Pre-mature Retirement). An official note would be given in a day or two after having a word with the Prime Minister. Parrikar has confirmed that he would give a clarification tomorrow evening or day after tomorrow. As far as Defence Minister and we are concerned that clause goes,” Singh told reporters.

Click to continue reading ; http://indianexpress.com

Ex-servicemen disappointed with OROP ; protests to continue

Ex-servicemen disappointed with OROP; protests to continue

“Six of our demands have been rejected; the government has accepted only one demand – we are not happy, the protests to continue”.

The ex-servicemen’s United Front have said that they are only partially pleased on the announcement made by the government. They have announced that the protests will continue; a massive rally planned on September 12.

According to the current positions, disputes are on about three issues:

1. Revision of pension once in every two years instead of the government’s decision to revise pension once in every five years.

2. The scheme will be effect from 1.4.2014 instead of July 1, 2014

3. A five-member committee instead of a one-member committee, and the report to be submitted in 30 days.

A review of OROP scheme

Based on the recommendations of the Third Pay Commission in 1973, the then Prime Minister Indira Gandhi had revoked the One Rank One Pension scheme. During the year, the salaries of government employees were increased from 33 percent to 50 percent.

Based on the last drawn salary, the armymen’s pensions were decreased from 70 percent to 50 percent.
The Fourth Pay Commission of 1986 rejected the demands for increasing the army pension.

The Sharad Pawar Committee in 1991 rejected the demand, but agreed to revise the pension once.
The Fifth Pay Commission of 1996 rejected the demand of the ex-servicemen.

Sonia Gandhi asked that the pension revision be included in the election manifesto of 2002.

The Sixth Pay Commission of 2006 rejected the pension demand; ex-servicemen began to protest in the open.

In 2008, a relay fast was held at Jantar Mantar by the ex-servicemen. They decided to return the medals and gallantry awards to the government. The government ignored them.

In 2009, the then President Pratibha Patil refused to meet the ex-servicemen. They handed over the medals and awards to the Rastrapati Bhavan staff.

In 2011, the ex-servicemen pension demand was presented to the Rajya Sabha committee.

The then Defence Minister AK Anthony and the then Finance Minster Pranabh Mukherjee rejected the demand saying that the scheme would require an additional Rs.8000 – 9000 crores and that the government did not have such funds to spend.

In 2013, Narendra Modi took part in a massive rally organized by the ex-servicemen in Haryana’s Rewali and expressed his support to the One Rank One Pension scheme.

As soon as Modi indicated his support, the UPA government woke up and announced that it would implement OROP from April 2014 onwards. Rs.500 crores was allocated for this purpose.

Even after the BJP-led Modi government took charge at the centre, confusions and delays continued to prevail. But the prime minister was firm on implementing OROP.

The ex-servicemen began fasting at Jantar Mantar once again in July, thus stepping up pressure on the government.

On September 5, the centre announced the implementation of One Rank One Pension. 

One Rank One Pension- Projected OROP Table PBOR and Officers

One Rank One Pension- Projected OROP Table PBOR and Officers

Government Announces One Rank One Pension Scheme for Ex-Servicemen

Government Announces One Rank One Pension Scheme for Ex-Servicemen 

The Government has announced the One Rank One Pension scheme for the Ex-Servicemen. This was announced by the Defence Minister Shri Manohar Parrikar here today. The following is the statement of the Defence Minister:

“Government of India respects its Defence Forces and Ex-Servicemen for their valour, patriotism and sacrifices. The Government is proud of their devotion to duty and bravery. Our forces, besides vigilantly and gallantly defending the nation, have displayed exemplary standards of courage and bravery in natural calamities, law and order situations and other difficult circumstances.

The issue of “One Rank One Pension” (OROP) has been pending for nearly four decades. It is a matter of deep anguish that the various governments remained ambivalent on the issue of OROP. In February 2014, the then Government stated that OROP would be implemented in 2014-15, but did not specify what OROP would be, how it would be implemented or how much it would cost. An estimated Rs. 500 crore provided for OROP in the budget presented in February 2014 by the then government was not based on any thorough analysis. It is pertinent to mention that the then Minister of State for Defence in 2009 had, in reply to a question, informed Parliament that there are administrative, technical and financial difficulties in implementing OROP. It is for these reasons that the present government took some time to fulfil its promise.

Prime Minister Shri Narendra Modi has, on various occasions, reiterated the Government’s commitment to implement OROP for Ex-Servicemen under military pension. As stated above, the previous government has estimated that OROP would be implemented with a budget provision of a mere Rs. 500 crore. The reality, however, is that to implement OROP, the estimated cost to the exchequer would be Rs. 8,000 to 10,000 crore at present, and will increase further in future.

The Government held extensive consultations with experts and Ex-Servicemen. The main argument for OROP is that the Defence personnel retire early and thus are not able to get the benefits of serving till normal retirement age. Despite the huge fiscal burden, given its commitment to the welfare of Ex-Servicemen, the Government has taken a decision to implement the OROP.

In simple terms, OROP implies that uniform pension be paid to the Armed Forces personnel retiring in the same rank with the same length of service, regardless of their date of retirement. Future enhancements in the rates of pension would be automatically passed on to the past pensioners. This implies bridging the gap between the rate of pension of current and past pensioners at periodic intervals.

Under this definition, it has been decided that the gap between rate of pension of current pensioners and past pensioners will be bridged every 5 years.

Under the OROP Scheme:
The benefit will be given with effect from 1st July, 2014. The present government assumed office on 26th May, 2014 and therefore, it has been decided to make the scheme effective from a date immediately after.
Arrears will be paid in four half-yearly instalments. All widows, including war widows, will be paid arrears in one instalment.

To begin with, OROP would be fixed on the basis of calendar year 2013.

Pension will be re-fixed for all pensioners retiring in the same rank and with the same length of service as the average of minimum and maximum pension in 2013. Those drawing pensions above the average will be protected.

Personnel who voluntarily retire will not be covered under the OROP scheme.

In future, the pension would be re-fixed every 5 years.

It is estimated that the expenditure on arrears alone would be ten to twelve thousand crores of rupees. Apart from the fact that the previous government had provided for only Rs. 500 crore in the budget, it is noteworthy that the Koshiyari Committee had accepted the estimate of Rs. 235 crore as additional financial burden to implement OROP. The present government has accepted OROP in true spirit without being constrained by these inaccurate estimates.

OROP is a complex issue. A thorough examination of interests of retirees of different periods and different ranks is needed. The inter-service issues of the three Forces also require consideration. This is not an administrative matter alone. Therefore, it has also been decided that a One Member Judicial Committee would be constituted which will give its report in six months.

Prime Minister Shri Modi has fulfilled his commitment and approved OROP for Armed Forces personnel. Ministry of Defence will soon issue detailed Government Order.”


PIB

Trade unions eye Rs 15,000 per month minimum wage as national baseline

Trade unions eye Rs 15,000 per month minimum wage as national baseline
By Subodh Varma, TNN

One of the key issues on which the negotiations between the government and the 10 central trade unions that had called for a general strike on Wednesday broke down was that of minimum wages. A labour ministry document circulated amongst the trade unions days before the strike, argued that by current norms, prices and calorific needs, Rs.6330 per month is the monthly wage adequate for an unskilled worker with a wife and two small children.

The trade unions and various other federations that represent 15 crore workers had demanded Rs.15,000 per month minimum wage as a national level floor wage. Striking a generous posture, the government modestly increased its proposal to Rs.7098 per month.

What the government had proposed was less than half of what was demanded. This was one of the contributory factors to the breakdown of negotiations. Other demands of the workers included social security coverage, non-interference with existing labour laws, etc.

How did the government calculate their proposal? A look at the fine print shows a slew of gross under-estimations and the use of an archaic formula first spelled out way back in 1957. Some of the food items' prices are far from reality. For instance dal is costed at Rs.65 but only one of the various dals in the market - chana or gram dal - comes in this range. Arhar (tur) is Rs.135 per kg, urad is Rs.117.5, masur is Rs.95. All these current retail prices are from the consumer affairs ministry's price monitoring data spanning 81 cities and towns.

Mutton is priced at a bizarre Rs.80 per kg, although it doesn't really matter because only 50 g is allowed. This is convertible to 250 grams of vegetables which are priced at an imaginary Rs.16 per kg. In the real world mutton is selling at anywhere between Rs.300 to Rs.400 per kg. And rarely if any vegetable sells at Rs.16 per kg.

 But the real rub comes in the non-food items. Just Rs.390 is supposed to be spent on rent every month. And, fuel for cooking and utilities like electricity etc. are all supposed to be covered under a meagre Rs.780.

All education, medical expenses, marriages, care of elderly, recreation etc. is lumped together and costed at 25 percent of the food expenditure. This practice started after the Supreme Court in a landmark judgement in 1991 directed as much saying that if such a minimum wage cannot be guaranteed then the managements have no right to run their business. But even this works out to a mere Rs.980 per month.

Costs of education and healthcare have risen tremendously in the past several years and even one major episode of sickness in the family would be devastating. The government's wage calculation seems to be blissfully unaware of this.

Recent government data shows that real wages, that is, after adjusting for inflation are dipping while the share of wages to profits is also dipping in the organized sector. In the unorganized sector which employs over 90 percent of India's workforce, wages are abysmally low and conditions of work onerous. Small wonder then that the trade unions were unwilling to accept the government's proposals.


Source : The Economic Times

One Rank One Pension: A new wave of expectation rises; Announcements expected in 48 hours

One Rank One Pension: A new wave of expectation rises; Announcements expected in 48 hours

Although there is no official confirmation from the government, the ex-servicemen’s United Front are ready to accept the demand if it comes with a once-every-two-years pension revision, instead of five.”

Implementation of One Rank One Pension : After crossing multiple hurdles the One Rank One Pension scheme is stuck at one final block. The Government has clarified that it was impossible to revise the pension each year. It is ready for a revision once every five years. But, there are talks that the Government would relax its stand and agree to revise the pension once every two years.

“There is no confirmation from the Government side, but if they agree to revise the pension once every two years, we will accept the term” Major General (Retd) Satbir Singh, who is heading the protests, said.

Sources claim that a section of the ex-servicemen are not ready to accept the once-every-two-years revision. They want to call a general body meeting and discuss it.

Months, weeks, and days have gone. The announcement from the government is now expected in 48 hours. But, there is always the question of whether one should or shouldn’t trust these news.

Many wonder why the demand, that had remained pending for years, suddenly gained momentum and force now. Plenty of reasons are also being attributed to it. Here are the two most important ones –

1. The fact that Modi had voluntarily offered to implement the OROP if he is voted to power. OROP was also included in his election manifesto.

2. Defence pension has not been revised for more than seven years, since the recommendations of the 6th Pay Commission came into being. Thousands of army personnel who had retired before 2006 have not been given any pension revision until now. The Government’s refusal to heed to the countless talks, cases, and judgements of various courts has brought the crisis to this stage.

Source: 7thpaycommissionnews.in