Monday, July 21, 2014

Is Rajya Sabha out of bounds for the Defence Services?

Sachin Tendulkar, Rekha and Anu Aga have been nominated as members of the Rajya Sabha.  Thus an eminent sportsman, a cine actress of the yester years and a prominent businesswoman have all found a place in the premier democratic institution of the country. After the erstwhile Lt Governor of Delhi Air Marshal HL Kapoor in the early 80’s, though not appointed on the basis of his service background, the services have had no representation in the institution. Unfortunately no one seems to have even considered bringing in a defence services representative to the august body.

A representative of the defence services if inducted to the Parliament will be an expert advisor on defence matters besides being a spokesperson of 1.3 million soldiers and over 1.6 million military veterans, of our country. They have been engaged in protecting our borders perhaps under most difficult and risky environments. India, we need to bear in mind is a nuclear power with a robust ongoing ballistic missile program. Geography has gifted us with an assortment of neighbors with some of whom we are yet to delineate our national boundaries.

Our defence budget is the 9th largest in the world for the year 2012 which is around US$  41 billion and it is expected to go up to US$ 110 billion by 2016. Our country is one of the largest importers of military hardware and has been witnessing a surge in defence related scams in the recent past. The state of defence preparedness as well as the need for maintaining a balanced mix of conventional forces and strategic assets is still evolving.  The need and the urgency for developing defence related infrastructure in our border areas are yet to be fully realized. We have a generalized bureaucracy with very little knowledge or practical experience in defence matters who seem to be guiding our elected representatives in the government in defence matters. To add to all these woes, the defence forces have been kept out of the decision making processes even in defence related issues.

Considering that our people and our people’s representatives have very limited knowledge and expertise in matters military and strategic thinking would it not benefit the country as well as the tax payer by inducting a defence services representative to the Rajya Sabha?  Would his contribution not be valuable as a part of various defence related Parliamentary committees? Should this large section of our countrymen who have forgone some of their democratic rights in the interest of the country at some time or the other remain dumb for the rest of their lives for having chosen military as their career? Is such a state acceptable even after six decades of independence and after the defence services have unequivocally demonstrated their democratic credentials in the South Asian context and environment?

The Parliament of India is not a platform for projecting the country’s respect for an expert in a particular field. It is a home for discussing various issues concerning governance to evolve solutions to problems facing the country and make suitable laws. Will Sachin have the time to contribute to the business of the Parliament with his cricketing engagements? Does he have any  idea of national issues ? What has been the contribution of our erstwhile cine actors and actresses in the Rajya Sabha? What are the nation’s expectations from Ms Rekha? Are we viewing Rajya Sabha seats as a tool in the process for image makeover of political parties?  

When will we as a nation understand our necessities and priorities and act in the interest of the country?

Monday, July 14, 2014

The Government has written off 36.5 Lakh Crores to Industries in past 9 yrs.

Here is a very serious revelation by Shri P  Sainath.

The Nation has been officially informed periodically that the Government has written off a whopping THIRTY SIX LAKH CRORE RUPEES to corporate industries in past nine years !

This is shocking. But there is hardly any protest or reaction in the national media - who are busy hair splitting on minor issues.

I recommend you to read this article, with the seriousness it deserves.


It is indeed sickening. 

Is there any institution say the appropriate level of Judiciary, who could take a note of this serious financial lapse by Indian Corporate Sector and devise a solution to prevent such large scale corporate misappropriation leading to write off of India's immense wealth.


India Resists
The revenues foregone in 2013-14 could fund the rural jobs scheme for three decades or the PDS for four and a half years.
                                                      By P. Sainath.

It was business as usual in 2013-14. Business with a capital B. This year’s budget document says we gave away another Rs. 5.32 lakh crores to the corporate needy and the under-nourished rich in that year.  Well, it says Rs. 5.72 lakh crores  but I’m  leaving out the Rs. 40 K crore foregone on personal income tax since that write-off benefits a wider group of people. The rest is mostly about a feeding frenzy at the corporate trough. And, of course, that of other well-off people. The major write-offs come in direct corporate income tax, customs and excise duties.

If you think sparing the super-rich  taxes and duties worth Rs. 5.32 lakh crores  is  a trifle excessive, think again. The amount we’ve written off for them since 2005-06 under the very same heads is well over Rs. 36.5  lakh crore. (A sixth of that in

just corporate income tax). That’s  Rs 36500000000000 wiped  off for the big boys in nine years.

With  Rs. 36.5 trillion  –   for that is what it is  –   you could:
·       Fund the Mahatma Gandhi National Rural Employment Guarantee Scheme for around 105 years, at present levels.  That’s more than any human being could expect to live. And a hell of a lot more than any agricultural labourer would. You could, in fact,  run the MNREGS on that sum, across the working lives of  two generations of such labourers. The current allocation for the scheme is around Rs. 34,000 crore.

·       Fund the Public Distribution System for 31 years. (current allocation Rs. 1,15,000 crores).

By the way, if these revenues had been realized, around 30 per cent of their value would have devolved to the states. So their fiscal health is affected by the Centre’s massive corporate karza maafi.

Even just the amount foregone in 2013-14 can fund the rural jobs scheme for three decades. Or the PDS for  four and a half years. It is also over four times the ‘losses’ of the Oil Marketing Companies by way of  so-called ‘under-recoveries’ in 2012-13.

Look at some of the exemptions under customs duty.  There’s a neat Rs. 48,635 crore written off on ‘Diamonds and Gold.’ Hardly aam aadmi or aam aurat items. And more than what we spend on rural jobs.  Fact: concessions on diamonds and gold over the past 36 months total Rs. 1.6 trillion.  (A lot more than we’ll spend on the PDS in the coming year).  In the latest figures, it accounts for 16 per cent of the total revenue foregone.

The break-up of the budget’s revenue foregone figure of Rs. 5.72 lakh crore for 2013-14 is interesting. Of this, Rs. 76,116 crore was written off on just direct corporate income tax.  More than twice that sum (Rs.1,95,679 crore)  was foregone on Excise Duty. And well over three times the sum was sacrificed in Customs Duty (Rs. 2,60,714 crores).

This, of course, has been going on for many years in the ‘reforms’ period. But the budget only started carrying the data on revenue foregone around 2006-07. Hence the Rs. 36.5 trillion write-off figure. It would be higher had we the data for earlier years. (All of this, by the way, falls within the UPA period). And the trend in this direction only grows. As the budget document itself recognizes, “the total revenue foregone from central taxes is showing an upward trend.“

It sure is. The amount written off in 2013-14 shows an increase of 132 per cent compared to the same concessions in 2005-06.

Corporate karza maafi is a growth industry, and an efficient one.

Tuesday, June 24, 2014

Principles for deciding Pay Scales by 7th Pay Commission as Suggested by Indian Railways Technical Supervisors Association (IRTSA)

Principles of Determination of Pay and Minimum & Maximum Wages Submitted to 7th CPC 

Presentation on Principle of Pay determination & Minimum and Maximum Pay - Compiled by Er. K.V. Ramesh, Senior JGS/IRTSA

Principles of Determination of Pay & Determination of Minimum & Maximum Wages Submitted to 7th CENTRAL PAY COMMISSION

Minimum Wage as per 6th CPC method

Pay in Pay Band + Grade Pay + % DA + Compensation factor based on rise in NNP at factor Cost.
Calculation of compensation factor 

Per Capita NNP
at factor cost
At constant price
Increase over previous year
% Increase of NNP at factor cost on Constant Prices for the period of ten years

* Assumed figures as per average increase

Proposed Minimum Pay w.e.f. - 1.1.2016

Minimum Basic Pay + DA 140%+ Compensation
factor 65% of BP + DA
Minimum Basic pay after VI CPC
Projected DA 140% (as on 1.1.2016)
Compensation factor (65%)
Proposed Minimum Pay
Rs.27720 or Rs.28000
Proposed Number of times increase of BP

Proposed Minimum & Maximum Pay based on post 6th CPC formula

Pay in Pay Band
Grade Pay
Pay in Pay Band
Grade Pay

Minimum Pay shall be increased from Rs.7000 to Rs.28,000. 

Maximum Pay Shall be increased from Rs.80,000 to 3,20,000.

Intermediate Pays shall be fixed in the same way.

Upgradation shall be granted to specific categories on functional & other related justification.

Determination of Maximum Pay First & then arriving at Minimum Pay in the ratio of 9:1

Maximum Pay shall be fixed first as per rise of NNP and then the Minimum pay in the ratio of 9:1 thereof and the Intermediate Pays shall be fixed.

Maximum Pay = Rs.80,000 x Compensation factor based on rise in NNP at factor Cost. = 80000 x 3.96 = Rs.316800 or Rs.3,20,000.

Therefore, Minimum Pay works out to be 
Rs.320000/9 = 35555 or Rs.35500.

Rate of Increments

Annual Increment:- Rate of annual increment in each grade may please be granted @ 5 per cent.

Increment on Promotion:- During Promotion minimum 10% increase in Basic Pay has to be granted.

Fixation of Pay on Promotion at par with Entry Pay:- Pay on Promotion should be fixed at least at par with Entry Pay in the Revised Pay Structure.

Saturday, June 14, 2014


                                                         13 Jun 2014
Sh Arun Jaitley, Hon’ble Raksha Mantri,
Ministry of Defence, South Block, New Delhi-110011


Dear Sh Arun Jaitley,

At the outset, I would like to thank you for yesterday’s fruitful meeting, and would also request you for personal perusal of this letter, at your level.

BJP in its Manifesto had assured the Defence fraternity that OROP will be implemented.  PM, Mr. Narendra Modi during his election Rallies had announced that BJP will implement the OROP in letter and spirit.  In a Rally near Ludhiana (Jagraon), he had assured the Defence Veterans that actual OROP will be implemented.  You are aware that defence personnel across the Country had supported the BJP since it was the only Political Party which had assured that their demands and requirements will be accepted in case it came to power and these were included in its Manifesto. It was heartening to hear President in his address to both houses of Parliament also mentioning that OROP will be implemented soon as gratitude to the soldiers for their sacrifices to the Nation.

It is with this assurance in mind, I had the privilege to attend the meeting yesterday ie. on 12th June 2014 Chaired by you, where in, the services Headquarters had briefed on the implementation OROP.  The Draft Govt Letter (DGL) prepared by the Service HQs is in line with the accepted definition of OROP and is as per executive orders given by the then Defence Minister Mr. AK Antony during his meeting on 26th Feb 2014.  The minutes of the meeting alongwith the executive orders are enclosed for your perusal.

I wish to bring to your notice a fews issues which came up for discussion during the meeting yesterday:-

·   The definition of OROP accepted  by the Govt and given out by the then RM on 26 Feb 2014 is the  same as accepted by the Petition Committee of Rajya Sabha on OROP Chaired by the Shri Bhagat Singh Koshyari which presented its report on 19 Dec 2011 to the Rajya Sabha.

·   Based on the above definition, Koshyari Committee after due deliberations with the Secretary Finance and secretary expenditure had worked out the requirement of funds of Rs 3000 Crores in 2011.  With 10 percent of inflation every year, it works out to Rs 4000 Crores in 2014.  This amount is nothing for the Nation to meet the long pending demand of defence fraternity. OROP has been assured to them by none other than Sh Raj Nath Singh ji President BJP and Sh Narendra Modi Prime Minister India. OROP and welfare of ex-serviceman is a main essence of BJP manifesto. Government has promised that all promises made in manifesto will be honoured asap.

·   The then Govt had earmarked Rs 500 Crores as initial  indicated amount and had mentioned in the order of 26 Feb 2014 that additional fund as required will be made  available.

·   It was accepted even by the last Govt that disability and family pensioners will be included in the grant of OROP.

·   The Model I and Model 2 by the PCDA/CGDA/DESW must be outrightly rejected since these had never ever come under any discussion on OROP.  These, to our mind had been brought in as red herring by elements of lower bureaucracy of the DESW and the Defence Accounts Department in conjunction with the UPA Govt to delay the grant of OROP as per the accepted definition. It may be emphasized here by us again that the definition as announced on the floor of the house and also accepted in writing by way of a Govt of India letter, cannot be held mortgage to the thought processes or personal opinions of bodies of accountants.

·   The model presented by the Defence Services HQ is in line with the accepted definition of OROP and fully meets its requirement.  Acceptance of any other model will not be OROP as per the accepted definition.

·   All the objections raised by the PCDA/CGDA/DESW had been effectively contested by the Service HQs and need to be ignored.

·   Rates of pensions are enhanced every year since the basic pays of serving soldiers are enhanced at the rate of three percent every year.  In order, to implement the OROP, there is need to adopt a simple workable dynamic model to enhance the pensions every year.  If this is not implemented, juniors will start drawing more pension that their seniors.  In that event, protection clause will need to be applied which will be difficult to implement and will cause delays.

·   Rank pay case as per the SC judgement when implemented would need to be incorporated in OROP.

·   Requirement of Rs 9100 Crores required  for OROP as stated by CGDA does not seem to be in sync, as no details had been given by the CGDA to the service HQs. We would like to bring to your knowledge that it is very easy for accountants to play with numbers on noting sheets and file notings in order to twist the entire amount and make it seem prohibitory thereby trying to negatively influence the political executive. It is also not understood as to how is the figure provided by even the Expenditure Secretary before a Parliamentary Committee is being now twisted in an attempt to breakaway from the accepted definition of OROP. 

·   The Govt is committed to implement the OROP as per the accepted definition whatever be the requirement of funds.

In view of the above, the following recommendations are made:-.

1. The Draft Govt Letter (DGL) prepared by the Services HQ for the implementation of OROP as per the accepted definition as already announced in the Parliament and as already issued in writing by the Govt, be sanctioned and implementation letter issued at the earliest.  

2.  The amount required to implement the OROP as per the above DGL be made available.  

3. Disability and family pensions be duly incorporated in the OROP.
4. Rank Pay case Judgement of SC when implemented be incorporated in the OROP.

5.  Any further decision or meeting on the issue may not be taken merely on the inputs of Defence Accounts Department or the DESW and may only be taken after due consultation with all stake-holders so that unilateral points of view can be effectively countered whenever required.

 With regards,

 Maj Gen (Retd) Satbir Singh, SM
 Chairman IESM

Copy to

Sh Narendra Modi                               Prime Minister of  India                        Prime Minister’s Office (PMO)                 New Delhi – 110 001

For information please
Sh Rajnath Singh                                President, BJP                                   Home Minister Govt of India                   North Block, New Delhi

For information and 
action please.

Shri Rao Inderjit Singh
Raksha Rajya Mantri
C-1/14 Lodi Garden
New Delhi - 110 003
For information and 
action please.
General Bikram Singh,
Chief of the Army Staff &
Chairman Chiefs of Staff Committee
Integrated HQs of Armed Forces (Army)
South Block, New Delhi-110011

May we request you 
to jointly pursue the 
matter with the Govt 
for issue of Imple-
mentation letter as
suggested above at 
the earliest please.
Admiral RK Dhowan,
Chief of the Naval Staff
Integrated HQs of Armed Forces (Navy)
South Block, New Delhi-110011


Air Chief Marshal Arup Raha
Chief of the Air Staff
Indian Air Force
Vayu Bhawan, New Delhi 110011