Let 7th Pay commission decide best OROP formula
The 4-month extension of the 7th Pay Commission may prove to be a breather for the PM Narendra Modi government in its efforts to settle the One Rank One Pension (OROP) issue besides providing more time to look at the ways to generate additional money required to fund the pay-hike burden of the central government employees due to the Commission’s recommendations.
The government would do well by referring the OROP issue to the 7th Pay Commission quickly — the thought is already floating in the top government circles — as its recommendations will have a bearing on the demand of the defence veterans as salary and pension hikes for the current employees would mean that the gap between the pension of those who have retired earlier and those retiring from next year onwards will widen further even if they held the same rank.
In fact, the OROP was dropped in 1973 following the 3rd Central Pay Commission recommendations, and the demand for reinstating it has been there since then.
While PM Narendra Modi has accepted the OROP, in principle, it would be a good idea to let the 7th Pay Commission find a way to implement it in a manner that is practical in terms of bearing its burden and a reasonable linking of the pensions of the past and future retirees.
The recommendations of the commission, if the government accepts it, would be applicable from January 1, 2016.
As it has got an extension till December 31st now, the government will have to provide for the additional burden on the exchequer in the next budget.
Source: Financial Express