September 5, 2015 / 12:20 PM / 2 years ago

Indian government approves pricey plan to equalize veterans' pensions

India's Defence Minister Manohar Parrikar addresses the media in New Delhi, India, September 5, 2015.Stringer

NEW DELHI (Reuters) - The Indian government approved a long-awaited program to equalize pension payments for retired military personnel despite it being a "huge fiscal burden," defense minister Manohar Parrikar said on Saturday.

The program, known as "One Rank One Pension", or OROP, will ensure uniform pension payments to ex-servicemen who served at the same rank and for the same amount of time, regardless of the year they retired, among other measures.

Veterans in India have been fighting for reforms to their pension packages for years.

"It is a matter of deep anguish that the various governments remained ambivalent on the issue of OROP," Parrikar said in a statement at a press conference. "Prime Minister Shri (Narendra) Modi has fulfilled his commitment and approved OROP for Armed Forces personnel."

Approving the scheme could be a political boon to Modi, whose ruling Bharatiya Janata Party (BJP) enjoys broad support in the military.

But the program, which the government estimates will cost the exchequer between 80 and 100 billion rupees ($1.2-$1.5 billion) and increase over time, may pose another challenge to Modi's economic targets, including reducing the fiscal deficit to 3.9 percent of gross domestic product by the end of March.

Last month, Modi's government abandoned a pro-industry land reform which the opposition had said would hurt India's farmers.

OROP plans to reconcile the rate of payments of current and past pensioners every five years, disappointing some ex-servicemen who wanted the review to happen more frequently.

A major veterans' group that has been protesting about the issue also objected to the exclusion from the scheme of personnel who voluntarily retired.

"This is not acceptable to us," said retired major general Satbir Singh, a spokesman for the Indian Ex Servicemen Movement.

On the campaign trail in 2014, Modi slammed the then-ruling Congress Party for delaying OROP's implementation, according to media reports at the time.

But critics say the current government has also dragged its feet addressing veterans' concerns.

"(The government) has treated the ex-servicemen in the most cavalier manner," Congress leader Manish Tewari told television station NDTV on Saturday.

Writing by Krista Mahr; Editing by Mark Potter

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