​ CAG finds deficiencies in defence pension system

NEW DELHI: The Comptroller and Auditor General has found glaring deficiencies in the defence pension system, including incomplete accounting of expenditure, and flaws in the authorisation process.

In a report tabled in the Lok Sabha, the CAG said an amount of Rs 6,831 crore was lying in banks at the end of March, 2016, due to procedural lapses.

The report said substantial amount of expenditure was not booked to the pension head and was lying under RBI suspense head because of the inability of the banks to furnish the pension payment scrolls.


The defence pension is disbursed to over 25 lakh pensioners, involving an expenditure of over Rs 60,000 crore every year.

The CAG observed that the process for authorisation of the pension involved several players and multiple stages which often resulted in avoidable delays in issue of the pension payment orders (PPOs).

"There was a need for review of the authorisation process, so that it is less cumbersome and less time- consuming," it said.

The CAG said the transmission errors as well as other mistakes in the banks, which account for nearly 75 per cent of the pension disbursements, had resulted in numerous cases of underpayments and overpayments.

"Based on test check for one month, cases of 21,434 pensioners were identified who were underpaid, amounting to Rs 106 crore.

"Major reasons for underpayments were non-revision/ incorrect revision of pensions, non-restoration of commuted portion of pension, wrong revision of disability element, and non-revision of fixed medical allowance," it said.