Government may soon announce a 'new deal' for ex-servicemen

NEW DELHI: With no resolution of the one rank, one pension (OROP) logjam in sight, the government is preparing to unilaterally announce a "new deal" for veterans over the next few days to avoid the model code of conduct for Bihar assembly elections that is due to be announced any time after Saturday.

The Election Commission's announcement of polls dates will restrict the government's ability to make public its decision.

Sources said the government and the veterans are sticking to their ground on the issue of periodic revision of pension, with the ex-servicemen's position of an annual adjustment not found feasible.

The government, on its part, is of the view that it is offering a special dispensation for the armed forces by prescribing a revision every five years to budget for an increment, although the norm for everyone else is 10 years.

Some of the mediators have suggested that the pension could be reset every three years but there are indications that the government is sticking to its stand.

As reported by TOI, differences in the two other areas - the date of rollout and the base year, which is expected to be 2011 - have been nearly resolved. But on the issue of pension adjustment, both sides are unwilling to budge so far.

"I have my own formula on what OROP means. Somebody else may have their own formula on OROP but it has to be within reasonable and rational criteria. You can't have an OROP where pensions are revised every month or every year," finance minister Arun Jaitley had said on Monday, while insisting that fiscal discipline had to be maintained.

Having repeatedly promised OROP, the government is prepared to take an annual liability of Rs 8,300 crore but doesn't want this burden to rise every year. With arrears up to August, the Centre will have to take over an additional burden of around Rs 12,500 crore this fiscal, which would be above the defence pension bill of Rs 54,500 crore budgeted for the current financial year.