This year the Defence Budget was presented by the Finance Minister Smt Nirmala Sitharaman, who had earlier been the Raksha Mantri and hence was fully aware of the capabilities of the Armed Forces, the threats envisaged, long term perspective plans to meet the current and future threats and the requirements of the Services.
She, like her predecessor Mr Arun Jaitley who had also held both the Finance and Defence portfolios, was also aware of the capital and revenue expenditure, force sustenance expenditures and the committed liabilities as well as the outlay for salaries and pensions.
Going merely by statistics the Defence Budget, which was not even mentioned in the marathon speech, has an outlay of Rs 337553crore less pensions.This represents 15.5% of the overall Centre’s allocation and an increase of 2.1 percent over the previous years RE figures. It is also 1.6% of the GDP. As per the SIPRI Report of 2019, India was the fourth largest spender on Defence in2018.
But these are merely figures as each country needs to spend based on its security threats, commitments, size of Defence Forces, expenditure on imports etc, and hence comparisons may not draw the correct conclusions. Incidentally, Saudi Arabia the third largest spender in 2018 spent over 8% of its GDP on defence.
There is no doubt a gap exists between the resource projections of the Services and budget outgo which in 2019- 2020 was 25% as per the figures available. We need to realise the limitations of the country’s finances and the priorities for spending while allocating resources to various sectors. Aspirations must be high but we should rightly spend what we can afford.
What we need to focus is on is an issue which has now drawn the attention of many Defence analysts and also of the CDS that is the increase in expenditure on pensions versus the salary bill. For the first time, pensions at Rs113278 crorehave exceeded the salaries at Rs1,12,940 crore, which is 0.5% of GDP.
The increase in pensions compared to the previous year at Rs 2,17,45 crore is 54% of the total increase of the defence budget. This is a figure that is only going to increase in the future. The reasons for the increase need to be understood and the measures in dealing with this issue need deliberation.
Every year approximately 60,000 personnel retire. Of these, the officers generally serve upto 58 years of age whereas 33 percent of the retirees are between 35 to 40 years of age and 44 percent are between 40 to 50 years, the average age of the persons released annually is 42 years. Over the years, the percentage of the number of persons leaving the Forces with pensionary benefits vis a vis those who leave early has also increased.
There is no doubt that you need a young and physically fit fighting force in view of the nature of the job and terrain they serve in. Whereas, at the same time you need to look after these people in terms of employment after they retire.
Coupled with the large number of retirees is the fact that the life expectancy has also risen over the years. India had a life expectancy of 32 years at Independence and that has risen to 68.7 years in 2019. This figure varies between males and females as also within states.
The bulk of our pensioners come from the Northern states being Service personnel they are physically fit, mentally strong and have lead a better quality of life hence it can be presumed that their life expectancy will be higher. An increase in life expectancy is an indicator of a better standard of living, better medical facilities and an improvement in the overall human development index of the country which are all positive pointers.
With a large number of veterans being added each year and life expectancy increasing the pension bill has to grow upwards. Coupled with this is the fact that the pensions go up every year due to DA which is linked to inflation and every ten years due to the Pay Commission, this also increased after implementation of OROP.
Now to add to this complexity, the number of pensioners will also go up incase the recruitments go up based on the expansion of the Forces as a person generally retires after twenty years. Reducing recruitment may not be easy, infact the raising of the Strike Corps for the mountains in view of our security threats from both Pakistan and China have only added to the manpower lately.
So what are the options? The easiest solution offered is reduction of boots on ground and focus on technology. But can drones replace fighters, and precision guided weapons replace artillery and tanks or can we wish away direct firing weapons and manpower intensive counter insurgency operations.
While technology can be the driver for change of the future battlefield can we wish away with manpower-intensive operations of the infantry in our combat environment. The answer is not as simplistic as the security challenges need to be met. The obverse is also true, we cannot have a pension bill outweighing our expenditure on salaries and modernisation.
The tail to tooth ratio has also been talked about over the years. Is there a case in point to outsource more services. This has been successfully done in some Western Countries where apart from security and facility management at static establishments even repair, maintenance and transportation is outsourced.
Another solution being talked about is increasing the retirement age. Officers up to the rank of Maj Gen retire at 58 that’s taking reemployment in consideration, whereas the others retire far younger. While age cannot be increased across the board there is a case in point to increase the age of non combatants and those in the Medical Corps and support Services and not post them to High Altitude or Field Areas after a particular age.
Can there be a case for reemployment of JCOs and ORs and posting them to NCC and static establishments. Currently, the only parallel to reemployment is the Defence Security Corps (DSC) employed for protection of static assets. However, even a younger person cannot be subjected to the stress and conditions of being part of a frontline combat unit and needs to have some exposure to units and training establishments.
The age between 42 and 58 is a very productive period. Hence, the Government needs to take concrete measures to absorb these veterans in State or Central Government jobs which will not only utilise their services in a meaningful manner for the development of the country but will also reduce the pension outflow by a considerable amount. It is imperative that this human resource be used for nation building.
I feel that serious thought needs to be given to these issues and a solution lies in the reemployment of ESMs. This could be by absorbing them within the Services in certain static establishments or by lateral induction into CPO and PMF.
However, the issues of pay and rank equivalence and protection need to be ensured. One could also reexamine the issue which was raised by Lt Gen Amrik Singh when he was DG Resettlement regarding raising certain TA battalions being staffed by ESMs.
There are also vacancies existing for ESMs in Central and State Governments but these vacancies are horizontal in nature and not vertical and as a result a large number of them are unsubscribed. There are also vacancies in Central Public Sector Units and Nationalised Banks which are also largely unfilled for various reasons.
The benefits of utilisation of this human resource are immense: they are highly trained, physically fit and extremely motivated, with a wealth of experience and their presence would be only beneficial to organisations they serve in. This is a resource that needs to be utilised. Some States to include Punjab have Ex Servicemen Corporations giving employment and being run fairly successfully.
However, to ensure that the Central and State Governments are serious about the resettlement of the ESM, you need to have a statutory body with suitable powers in the form of an ESM Commission which can monitor the implementation.
As currently there have been differences of opinion between various stakeholders particularly the Home and Defence Ministry as the former wants to protect its turf and promote their own and are reluctant to take in retiring Defence personnel in large numbers. This is a critical decision having implications for all stakeholders and hence needs to be driven at the CDS and political level.
At the other end is the aspiration of an individual who has answered the clarion call to serve the country putting, the safety, honour and welfare of the country above all. He retires early when most of his responsibilities towards his family that is education of his children and their marriage is unfulfilled with Service privileges and facilities partially withdrawn can he now fulfil his obligations with reduced income.
We do not want a situation where a young man is unwilling to sit on a gunners seat of a T-90 surrounded by sand and smoke in extreme temperatures and a scent of combat and would rather check bags in an air-conditioned environment of an airport.
We should not treat the increase of pensions as a Catch 22 situation; the solution lies in suitable employment by the Central and State Governments, which could also include reemployment within the Services, of this committed, skilled and motivated human resource till they are at least 58, thereby substantially reducing the pension outgo.
There is no option other than reforms to be able to balance the requirements of manpower and modernisation. At the same time we must always bear in mind that a nations might also includes caring for its soldiers for the rest of their lives.
Maj Gen Jagatbir Singh, VSM, is an Army Veteran who has earlier commanded an Armoured Division. He was the Director General Resettlement, prior to his retirement.
