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The <a href="http://www.businessinsider.in/searchresult.cms?query=BJP">Bharatiya Janata Party</a>, in 2014 Lok Sabha polls made a number of promises to woo voters across India and the party registered a historic win. The party, however, overlooked a few commitments it made to the public and among those is <a href="http://www.businessinsider.in/searchresult.cms?query=OROP">OROP</a>, a long-pending demand by the retired officers of <a href="http://www.businessinsider.in/searchresult.cms?query=Indian+Armed+Forces">Indian Armed Forces.</a> 
 
What is <keyword id="1392717" type="UNKNOWN" weightage="20" keywordseo="OROP">OROP</keyword>? 
OROP is a demand of same pension for the same length of service, irrespective of the date of retirement. Ex-servicemen have been demanding OROP for several decades now. The demand of equal pension primarily says that no matter when an officer or jawan has retired from service, they should get equal pension. 
 
As per the current practice, a Major General got his pension based on his last drawn salary which was, for instance, in 1990, while a Colonel, who retired in 2010, got a pension which was much more than what the Maj Gen in concern drew. 
 
What are the figures saying? As explained by the <keyword id="47209" type="ORGANIZATION" weightage="20" keywordseo="Finance-Ministry">finance ministry</keyword>, implication of complete OROP would become a huge burden on the Indian economy. Veterans of armed forces, however, argued that by the government’s own calculation, the ORP bill would be Rs. 8,600 crore a year, which is not that major an addition to the Rs. 54,500-crore defence pensions’ expenditure estimated for this financial year. 
 
What aggravated the matter now? The matter, after being highly politicized, came into notice in 2014 as the UPA accepted the demand after <keyword id="1575" type="ORGANIZATION" weightage="20" keywordseo="Congress">Congress</keyword> vice-president Rahul Gandhi personally intervened in the matter. 
 In 2014 Lok sabha elections, the demand became an election plank for the BJP and <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword> too announced its implication. Even after decades, the issue, it seems like has no chances of getting resolved in the near future as the finance ministry is taking a contrary stand in the issue. 
 
How old in the matter? The Indian national Congress in 1973, headed by the-then <keyword id="71" type="POSITION" weightage="20" keywordseo="Prime-Minister">Prime Minister</keyword> Indira Gandhi, terminated OROP followed by the Third Central Pay Commission (3 CPC). The decision, which was an ‘ex-parte’ call, caused unrest in the <keyword id="112134" type="ORGANIZATION" weightage="20" keywordseo="Indian-Armed-Forces">Indian Armed Forces</keyword> and since then, it has become a cause of public protest by Armed Forces Veterans. 
 In 2008, the matter came out in the open after the <keyword id="58837" type="ORGANIZATION" weightage="20" keywordseo="Sixth-pay-commission">Sixth Pay Commission</keyword> formally dismissed the OROP demand. 
 
The veterans demand special treatment citing their <a href="http://www.businessinsider.in/6-most-challenging-yet-rewarding-job-sectors-in-India/articleshow/48020780.cms">exceptional nature of job</a> and the fact that most soldiers are forced to retire before the age of 42, leaving them unemployable and in a state of penury. 
 
Government’s stand 
With OROP being ‘accepted’ by the government, the approval is something that is yet to come. The finance ministry, as per its calculation, says that it is not possible for the government to match pensions every time there is a hike in pay. 
 
Image: indiatimes

All about OROP in five points

No, not everyone is convinced and satisfied with the Prime Minister Narendra Modi after 'One Rank, One Pension' (OROP), a much awaited demand of the ex employees of the Indian army has been approved. The veterans are relieved with the explanation of the tricky 'pre-mature retirement' clause in the OROP issue, but not the ones who retired early. Finally a few officers intervened and helped people get a clear picture of what the confusing clause of OROP debate is all about. 
 
On the confusion created after defence minister Manohar Parrikar said OROP would not apply to those taking early retirement; the veterans welcomed PM Modi's clarification that those retiring early due to medical reasons and service-related issues would be included in the scheme. 
Officials have confirmed that OROP would apply to all current pensioners, including those who retired early. However, the ‘confusing’ clause was aimed at retaining serving personnel. The fear was that with good pensions assured, many relatively young officers would opt for early retirement. 
 
"The OROP scheme would be used as an incentive for officers to serve their full tenure. In the past, several officers would opt for retirement after 20 years of service as they were assured of a pension. Now, they may serve longer to avail the OROP benefit," an official said. 
However, the veterans have decided to continue a scaled-down relay hunger strike on minor pending issues, including the annual revision of salaries.

Here’s how officials clarified doubts on OROP

Seventh central pay commission, the report of which has been submitted to the finance minister, is all set to benefit 52 lakh pensioners. This would be done under the much-in-news one-rank, one-pension (OROP) principle. Having lesser liabilities than other beneficiaries, these pensioners are more likely to spend the money they get than save it. This would increase the demand for consumer goods and services as well as for recreation and travel. 
 
As per the proposal by the pay commission, past pensioners and current retirees would be at complete parity with each other, owing to which, the amount paid to both these sections would be comparable. 
 
"The rate of growth is relatively higher for pensions because of the recommendation to adjust scales of pensioners, akin to OROP," ICRA senior economist Aditi Nayar told ET. 
 
For serving employees, the pay increase is 16%, while pensioners would get 24% increase in benefits. However, the allowances given to serving employees would also see a boost, making the benefits equaling 23.6%. 
 
However, if reports are to be believed, a pressure on fiscal deficit might induce some delay in the increase of allowances. If this happens, pensioners stand to benefit the most from the pay commission award, starting January 1, 2016. 
 
For computing the pension benefits, there have been two methods proposed. The pensioner will get the higher of the two sums, based on parity with current retirees and the uniform 2.57 fitment allowed to everyone. This is the factor, as determined by the pay commission, by which the old number will be multiplied to arrive at the new sum for beneficiaries. Accordingly, for those who retire now, the minimum monthly pension is set to increase to Rs 9,000, which previously was Rs 3,500. On an estimate, a pensioner will on average get Rs 65,000 more a year now. 
 
"Assuming that the revision is rolled out as scheduled and there are no lump sum arrears that need to be released, we expect the lower ticket sized consumer durable segment to receive a spending boost, from new as well as replacement demand," said Nayar. This obviously depends on the financial positions of the pensioners, including a house and other liabilities that they might not have to pay for, as opposed to the serving employees. 
 
<a href="http://economictimes.indiatimes.com/thumb/msid-49788582,width-600,resizemode-4/fpis-take-out-rs-2800-crore-in-two-weeks.jpg">Image source</a>

52 Lakh pensioners to be benefitted by Seventh Central Pay Commission

After <a href="http://www.businessinsider.in/Its-victory-for-Indias-ex-servicemen-NaMo-govt-implements-OROP-scheme/articleshow/48836241.cms">PM Modi</a> has cleared the air on the much-awaited <a href="http://www.businessinsider.in/searchresult.cms?query=OROP">OROP </a>bill, calculations on the fiscal front have started coming in. A recent <keyword id="6358584" type="CITY" weightage="20" keywordseo="HSBC">HSBC</keyword> report has said, “OROP will have a significant impact on the country's fiscal bill and the overall cost will be around Rs 16,000 crore in the current financial year. 
 
"This would mean higher current pension payments as well as paying off arrears (retrospectively from July 2014), it will have a significant impact on the fiscal bill. We estimate the overall cost to be Rs 16,000 crore (USD 2.5 billion or 0.1 per cent of GDP) in FY16," HSBC said in its research note. 
 
The global brokerage firm also said that the existing defence pension bill is likely to go up by Rs 10,000 crore, while arrears totalling Rs 12,000 crore will be paid over two years. 
 
<a href="http://www.businessinsider.in/searchresult.cms?query=HSBC+">HSBC </a>Chief India Economist <keyword id="192974" type="PERSON" weightage="20" keywordseo="Pranjul-Bhandari">Pranjul Bhandari</keyword> said, "In sum, we estimate the fiscal implication to be Rs 16,000 crore in Fiscal year 2015-16." 
 
Apart from this, there are certain other pressures on the fiscal front that might worry the government. The government recently announced capital infusion of Rs 70,000 crore over the next four years including Rs 25,000 crore in the current fiscal. The disinvestment department's mammoth target of Rs 69,500 crore, on the other hand, is unlikely to be met. 
 
"The disinvestment receipts target of Rs 69,500 crore looked rather rich. Even in the previous year, FY15, the government budgeted for Rs 63,400 crore but ended the year with about half of that," Bhandari added. 
 
However, factors like lower than expected subsidy bill, additional non-tax revenues like RBI and PSU dividends are likely to offset some pressures on the fiscal front. 
 
The deciding factor on whether the fiscal deficit target of 3.9% of GDP is easily met is likely to rest on the overall tax revenue growth. 
"All said, while it's too soon to declare that the fiscal target will be missed, pressures are mounting and it is time to monitor closely," HSBC said. 
 
Image: indiatimes

OROP to affect country’s fiscal bill, says HSBC

After an intense protest by war veterans that lasted 83 days, the <a href="http://www.businessinsider.in/searchresult.cms?query=Narendra+Modi+">Narendra Modi </a>led government has announced the implementation of <a href="http://www.businessinsider.in/searchresult.cms?query=One+Rank+One+Pension+">One Rank One Pension </a>(OROP) scheme. 
 
Defence Minister <a href="http://www.businessinsider.in/searchresult.cms?query=Manoj+Parrikar">Manoj Parrikar</a> made the announcement on Saturday, September 05, 2015. 
 
Justifying the delay in the implementation of the scheme by the government, Union Minister Parrikar said, “Implementing the OROP will cost the exchequer Rs 8000 to Rs 1000 crore. This cost is bound to rise in the future.” 
He added, “The government decided to implement the scheme despite this is being a huge financial burden on the government.” 
It should be noted that the previous government led by former Prime Minister Dr. Manmohan Singh had allocated only Rs 5,00 crore for the scheme. 
The decision was taken after BJP President Amit Shah met the ex-servicemen following which Parrikar met Shah. BI India lists down are some of key features of the OROP scheme announced. 
 
· Government to appoint a committee headed by a judge that will focus on the issue of equalization of pension. 
 
· Pension to be revised every five years 
 
· OROP will be considered implement from July 1, 2014, and the base year being 2013, thus making the ex-servicement entitled to arrears 
· Arrears will disbursed four half-yearly installments 
 
· War widows to be given arrears first 
 
· Arrears alone will cost the ex-chequer anywhere between Rs. 10,000-12,000 crores. 
 
· Ex-servicemen who took voluntary retirement will not be covered under this scheme 
 
Image credit: Indiatimes

It's victory for India’s ex-servicemen! NaMo govt implements OROP scheme!

PSU bank employees wage revision finalised after three years of waiting — only a ₹1,100 increase in salary for officers

In order to woo voters in Bihar ahead of the Assembly polls later this year, the <keyword id="6360789" type="ORGANIZATION" weightage="80" keywordseo="Modi-Government">Modi government</keyword> is working out the modalities for the long-pending '<keyword id="736815" type="UNKNOWN" weightage="80" keywordseo="one-rank-one-pension">One Rank One Pension</keyword>' (OROP) scheme for ex-servicemen. The scheme is likely to be rolled out ahead of the state assembly elections, top government sources told PTI today. 

	The announcement is likely to be made by Prime Minister Narendra Modi, they said.
 

	"It (OROP) is being worked out. We will need to have a separate category so that it cannot be legally challenged later on and nor do others stake claim. This would be separate from other government pensions," the sources told the new agency.
 Mounting further pressure on the central government, ex-servicemen have decided to hold a big rally in Bihar ahead of the polls to demand the "promised due" of 'One Rank One <keyword id="6354432" type="UNKNOWN" weightage="80" keywordseo="pension">Pension</keyword>'. 

	The decision came even as groups of ex-servicemen went on a relay hunger strike in about 20 cities across the country.
 Assembly polls in Bihar are likely to be held in September/October this year. The BJP has a tough fight on hand against the JD(U)-RJD combine, which is likely to have a poll pact with <keyword id="1575" type="ORGANIZATION" weightage="80" keywordseo="Congress">Congress</keyword> in the state. The Modi government has said it is committed to OROP, a key promise made during the <keyword id="6355187" type="ORGANIZATION" weightage="80" keywordseo="Lok-Sabha">Lok Sabha</keyword> polls last year. It has, however, not implemented it till now. 

	Even though the government has said it is committed to implementing OROP, there has been no official word on why the scheme is getting delayed.
 Meanwhile, <keyword id="43909" type="ORGANIZATION" weightage="80" keywordseo="Defence-ministry">Defence Ministry</keyword> sources said the OROP file is with the Finance Ministry for a final budgetary approval. 

	About 22 lakh ex-servicemen and over six lakh war widows stand to be immediate beneficiaries of the scheme, which envisages a uniform pension for the defence personnel who retire in the same rank with the same length of service, irrespective of their date of retirement.
 Currently, the pension for retired personnel is based on the <keyword id="35069" type="ORGANIZATION" weightage="80" keywordseo="pay-commission">Pay Commission</keyword> recommendations of the time when he or she retired. That means, a <keyword id="128680" type="POSITION" weightage="60" keywordseo="major-general">Major General</keyword> who retired in 1996 draws a lower pension than a <keyword id="70345" type="POSITION" weightage="80" keywordseo="Lieutenant-Colonel">Lieutenant Colonel</keyword> who retired after 1996. 
	 

	(Image: Indiatimes)

BJP plays its 'One Rank One Pension' card ahead of Bihar Assembly polls

In a bid to mark one year in power, Prime Minister Narendra Modi will hold a massive rally in Mathura city today, in which over one lakh people are expected to join him for celebrations to be commemorated as 'Jan Kalyan Parv'. 
 
During the rally, Modi is likely to unveil ‘One Rank, One Pension' (OROP) plan with a corpus of about Rs 8,300 crore for over 25 lakh ex-servicemen, who have been demanding it for long. 
 
The announcement will come as a big relief for ex-servicemen, who have been demanding it for years now. Many even refused to take their medals to voice their outcry. 
 
Times of India reported first that the Modi government had defined "military pension" separate from other kinds of pensions, to justify implementation of OROP, since soldiers, sailors and airmen as well as their officers retire much younger than other government employees. 
 
The scheme implies payment of a uniform pension to personnel retiring in the same rank with the same length of service, irrespective of their retirement date. 
 
Previous governments contended that granting full OROP was neither financially nor administratively possible since it could lead to a cascading effect with similar demands from others like paramilitary personnel also. 
 
However, TOI reported the government is convinced that the service conditions of other government employees simply cannot be equated with those of the military, who retire at a much earlier age and undergo prolonged hardship tenures. The majority of soldiers, for instance, retire at 34-35 years of age. 
 
(Image: Indiatimes)

No more discriminatory pensions today onwards. PM Modi to announce ‘One Rank One Pension’ scheme

The Reserve Bank of India (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>) and the <keyword id="6357126" type="ORGANIZATION" weightage="20" keywordseo="monetary-policy">Monetary Policy</keyword> Committee (MPC) kept the <keyword id="43352" type="UNKNOWN" weightage="20" keywordseo="Repo-rate">repo rate</keyword> unchanged at 6.25%. 
 
The fifth bi-monthly monetary policy kept the reverse repo rate unchanged at 5.75%. 
 The MPC maintained an accommodative stance with an objective of achieving the CPI <keyword id="22195" type="COMPANY" weightage="20" keywordseo="Inflation">inflation</keyword> at 5% for Q4 2016-17. 
 
The incremental CRR will be withdrawn from December 10. 
 Addressing a news conference, RBI Governor <keyword id="6375119" type="UNKNOWN" weightage="20" keywordseo="Urjit-Patel">Urjit Patel</keyword> said, “The MPC felt it is important to achieve 5% CPI inflation by March. The 7th Pay Commission disbursements may affect inflation in next financial year. Also, the incremental CRR was purely a temporary measure.” 
 
He said the Fed had nothing to do with the status quo and given an October rate cut, a further cut was not warranted. 
 
Here are 5 other reasons why the RBI kept the repo rate unchanged 
 
1. Retail inflation: Retail inflation measured by CPI eased more than expected for the third consecutive month in October, driven down by a sharper than anticipated deflation in the prices of vegetables. In the fuel category, inflation eased with the decline in LPG prices on an annual basis and a fall in electricity prices from a month ago. Inflation excluding food and fuel continues to show strong persistence. 
 
2. Liquidity: Liquidity conditions underwent major changes in Q3. Surplus conditions in October and early November were overwhelmed by the impact of the withdrawal of SBNs from November 9. Currency in circulation plunged by Rs 7.4 trillion up to December 2; consequently, net of replacements, deposits surged into the 3 banking system, leading to a massive increase in its excess reserves. “Liquidity management was bolstered by an increase in the limit on securities under the market stabilisation scheme (MSS) from Rs 0.2 trillion to Rs 6 trillion on November 29,” the RBI stated. 
 
3. GVA outlook: The outlook for GVA growth for 2016-17 turned uncertain after the unexpected loss of momentum by 50 basis points in Q2 and the effects of the withdrawal of SBNs which are still playing out. 
 
4. 7th Pay Panel: In the services sector, the outlook is mixed with construction, trade, transport, hotels and communication impacted by temporary SBN effects, while public administration, defence and other services would continue to be buoyed by the 7th Central Pay Commission, one rank one pension (OROP). 
 
5. Demonetisation: In India, while supply disruptions in the backwash of currency replacement may drag down growth this year, it is important to analyse more information and experience before judging their full effects and their persistence – short-term developments that influence the outlook disproportionately warrant caution with respect to setting the monetary policy stance.

5 reasons why RBI kept the repo rate unchanged at 6.25%

One may argue, that when on 29 February 2016 the Finance Minister (FM) <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> will be presenting the General <keyword id="2783177" type="UNKNOWN" weightage="20" keywordseo="Budget-2016">Budget 2016</keyword> for the financial year 201-17, his job will be more difficult than what Manmohan Singh faced when he presented the ‘make-or-break’ budget in July 1991. For one, in 1991 there was an acknowledged economic crisis. Thus, there was a broader consensus on the likely course of action required to get India out of crisis. The doubt was whether India will bite the bullet or not. Well India did bite and Manmohan Singh was able to usher in liberalisation in India. 
 
In comparison, Mr. Jaitley has to deal with at least two sets of dilemma. Firstly, there is no consensus currently about the state of Indian economy. Secondly, there is uncertainty of whether sticking to the target of fiscal consolidation (3.9% Fiscal Deficit in FY16; 3.5 in FY17; 3.0 in FY18) as the FM targeted in the previous budget is the best course of action or not. 
 
Dilemma on the State of Economy: 
 
The expected FY16 real GDP growth of 7.6% (FY15:7.2%; FY14:6.6%) is among the best in the world, among the large global economies. Clearly the number does not look worrisome. But focus on aspects other than this number and one would come across the weakest corporate performance in a decade, a burgeoning bad debt problem in the banking system. And nominal GDP growth in FY16(estimated at 8.6%) is at least a decade low and showing a sequential decline over the previous three years(FY15: 10.8% ; FY14:13.3% ; FY13:13.9%). 
 
Incidentally, nominal GDP or the GDP calculated at current prices is the one which the participants in an economy experiences. The real GDP is the nominal GDP adjusted for, by a measure of systemic inflation known as GDP deflator. In the first three quarters of FY16 the GDP deflator has been either below 2% of has been below 0. If such GDP deflator values continue over the next few quarters’ Indian economy may be closing in on a deflationary scenario. Clearly, the real GDP growth may not be giving a cogent reading of the economy. Else what will explain the current clamour of industry bodies for growth measures (read government spending) from the government, in the current budget? 
 
No Small Nominal Headache: 
 
Why the FM will be particularly worried about the falling nominal GDP growth is because the fiscal deficit target is measured as a proportion of nominal GDP. When Mr. Jaitley presented the 2015-16 budget on 28th February 2015, he projected a fiscal deficit of INR 5.55 trillion (1 trillion is 1 Lakh crore). This was expected to be 3.9% of the then(as of Feb,2015) expected FY16 nominal GDP of INR 141 trillion. This is because the budget expected an 11.5% nominal GDP growth in 2015-16 over the then projected 2014-15 nominal GDP of INR126.5 trillion. 
 
Subsequently, the FY15 nominal GDP was re-estimated at a marginally lower INR 124.9 trillion and the FY16 nominal GDP growth is expected to be a decade low 8.6%. Even if the FY16 fiscal deficit remains at INR 5.55 trillion still under the recent nominal GDP estimates the fiscal deficit will be 4.1%, which may be construed as a slippage. 
 
Avoiding Fiscal Deficit slippage a Challenge 
 
Even in the current year (2015-16 ) if the government is to meet the 3.9% fiscal deficit target then the fiscal deficit has to be brought down by INR 200 billion to INR 5.34 trillion. That looks a bit far-fetched. 
 
How may 2016-17 fiscal deficit look like? Lets’ assume that the crude oil prices remain at current level and government continues to earn significant indirect tax by charging excise on petroleum products. The government may end up with incrementally spending approximately INR 1.2 trillion in lieu of higher salary of government employees as per 7th pay commission and to a lesser extent on One-Rank-One-Pension(OROP) scheme for soldiers. Since revenues are unlikely to go up commensurately one may realistically be looking at a fiscal deficit to the tune of INR 6-6.5 trillion. If FY17’s fiscal deficit target (3.5%) is to be met then the nominal GDP for FY17 needs to be to the tune of 20%, clearly that is not happening. 
 
Even if FY16’s target of 3.9% of fiscal deficit continues in FY17 then also a nominal GDP growth rate in excess of 10% needs to be assumed for the year FY17. Of course, this would mean an improvement in nominal GDP growth over FY16.While this is more plausible, the FM may face widespread criticism for slipping on the path of fiscal consolidation. This may adversely impact foreign investors particularly those invested in Indian fixed income securities. 
 
Damned if he Does, damned if he doesn’t: 
 
As such the FY16’s budget did not have too much spending in the nature of ‘government-growth-push’. This is reflected in the falling investment spend in the economy. As such major investments may not be expected from an over leveraged corporate sector, struggling with low capacity utilisation issues. If the FM decides to go for growth push spending along with the spending increases attributable to 7th pay commission and OROP the fiscal deficit will shoot up well over 4%. One is not sure, as to what extent it will scare global investors who may sell off on Indian securities, which may then weaken the Indian rupee. But clearly under such a scenario the government spending may not translate to a sharp improvement in growth. 
 
On the contrary, if the FM sticks of a fiscal deficit target of any number below 4%( but possibly higher than 3.5%) then government’s investment budget is likely to suffer. Such a move, while it will send a message of how determined the government is with respect to fiscal consolidation, may take a toll on growth. 
 
Clearly FY17’s budget would have challenged the best finance ministers India ever had. 
 
Deep Mukherjee was formerly senior director, Corporate Credit Rating at India Rating and Research, a Fitch Group company. He is currently a visiting faculty at IIM Calcutta.

Budget 2016: FM Jaitley may choose stability over growth!

Since June 15, armed forces veterans are on a relay hunger strike, demanding immediate implementation of <keyword id="736815" type="UNKNOWN" weightage="100" keywordseo="one-rank-one-pension">One Rank One Pension</keyword> (OROP) scheme. They say that no one is paying heed to their issues and claimed that even British treated them in a better manner. 
 
As per a report in Times of India, the Indian Army sepoy was never really paid well at any point in history and after the Mughals, the East India Company became the best paymaster in the subcontinent. 
 
"The Army got a better deal during the Raj. Western societies look up to the Army as an institution that upholds the nation state. It's still customary in the US for people to say 'thank you' to a war veteran; in the UK, they make way for war heroes, and a Victoria Cross winner always meets with a standing ovation wherever he goes. In India, the colonial state accorded privileges to the Army because it was essential for British rule," military historian Squadron Leader Rana Chhina (Retd) of USI-CAFHR told TOI. 
 
According to Dr Gajendra Singh, who now teaches South Asian history at the University of Exeter, the monthly pay of a sepoy was Rs 7 in 1860, Rs 9 in 1895 and Rs 11 in 1911. 
 
He told the news daily that the pay was often lower than the cost of subsistence which was estimated in 1875 at Rs 7, two annas and five paise. 
 
TOI news report revealed that a risaldar major in the cavalry was paid Rs 150, a risaldar Rs 80, and a jemadar Rs 50 a month. 
 
But above payees were low as compared to European officers. The cavalry or horse artillery colonels were paid Rs 1,478 per month, lieutenant colonels, Rs 1,032 and majors, Rs 929. 
 
By today's standards, the colonel was being paid the equivalent of around Rs 8 lakh then (as per the National Archives, UK's, old currency converter, Rs 1,478 is approximately 280 pounds per day, which is around Rs 8 lakh per month). 
 
However, worried that the Raj wouldn't attract top talent, sepoy salaries were increased in the latter half of the 19th century and around 40% of the Indian Army in peacetime was allowed to go on furlough to till their lands. 
 
The pensions then varied across ranks and number of years spent in service and was in the range of 50-70% of salaries. Presently, it is 50% across ranks. 
 
When India attained independence, Raj-era privileges were systematically taken away from the armed forces. "I suppose Nehru did it to make the forces coup proof and ensure democracy thrived. But the bureaucracy got it wrong and continued to devalue the military long after Nehru was gone," Chhina told TOI. 
 
(Image: Indiatimes)

The Indian Army was happier under British rule? Could be true!

Indian Finance Minister Mr. Arun Jaitley will be in the lime light on February 29, 2016, as he will present his budget speech in front of the whole nation. While the demand of the hour is to design a strong plan that aids meeting the fiscal goals, what adds to the curiosity of people is the tactics he would adopt to generate resources to fund the additional expenses related to the seventh pay commission hikes along with One Rank One Pension scheme (OROP). Furthermore, market leaders from every sector would have their keen eyes on him, to fathom, if key priorities and investments of the government will benefit them. 
	 
	Corresponding to the introduction of several economic programmes one after the other by the Indian Government, enterprises and SMEs thriving on technology have great expectations from the Union Budget 2016-17. 
	 
	Being a part of the Startup ecosystem, the foremost of all my expectations would be to see some relaxation in startup taxation. Taking cues from the 90s when IT was on the rise, a tax respite for a period of three years would aid India to become the startup capital of the world. As an on demand services provider to our customers through technology, I expect a more startup responsive and steady taxation system. The Union Budget 2016 should be able to back Prime Minister Modi’s ‘Start-up India, Standup India’ initiatives by introducing tax incentives for enterprises founded in the last 5 years. 
	 
	The current government’s focus in the Indian startup ecosystem is very positive and the union budget 2016 must encourage investment in the Indian startup space. We also need a better definition for online aggregators and their taxation norms in every vertical as India houses over 1000 online aggregators across various verticals. The government had initiated the idea of defining online marketplace recently but not much progress has been seen here till now. 
	 
	Shareholding premium from investment should not be considered as income and hence taxable. SEZ companies should be allowed to conduct domestic sales in Indian rupees rather than in foreign currency as per a recent change that came like a jolt. In a nutshell, I expect the entire startup ecosystem should be free of Red-Tapery, easing down the process of doing business and creating the ground for ‘Innovation’. 
	 Furthermore, considering the enthusiasm about the much talked about ‘<keyword id="1929810" type="UNKNOWN" weightage="20" keywordseo="Digital-India">Digital India</keyword>’ campaign, the budget this year should also focus on digital literacy to ensure the benefits of digitization is reaped by maximum number of individuals in the country. This will also empower citizens and enable start-ups and large organisations to experience digital transformation. Additionally, for the campaign to be successful, improved connectivity and access to technology supported by radical government process re-engineering needs its share in the Union Budget this year. Budget 2015 had its firm fingers on the IT companies apart from being rational and realistic. I think the budget this year should continue with its stand. As a matter of fact, Digital India, <keyword id="3003094" type="UNKNOWN" weightage="20" keywordseo="Startup-India">Startup India</keyword>, Standup India and Skill India requires strong budgetary support for the creation of a technological infrastructure to nurture such campaigns. In addition to that, schemes for IT based students, animation and gaming along with the Innovation Promotion Platform to foster a culture of innovation, research and development should be implemented this year as that would positively impact the Indian IT ecosystem. 
	 
	This year’s budget should aggressively promote R&amp;D benefits so that the organisations are encouraged to innovate and come up with newer technologies. Investment allowances for IT adoption must also be made to promote India as a premiere destination for both hardware and software development. 
	 
	Moreover, talking about the necessary infrastructure, the budget should definitely focus on ‘Smart Cities’. The year 2015 witnessed the listing of 98 smart cities across India and ensued by that the year 2016 looks prospective for the IT sector, categorically for the IoT players. A lot has been spoken about smart cities in the past two years and this year is the time to realize them. Smart cities – the fine amalgamation of technology, environment, governance and people, should be a predominant piece in the union budget pie. 
	 
	The country expects announcement of a vivid, descriptive roadmap and implementation plan for the humongous task of transforming the cities to a smarter phase, with select few cities embracing new technologies and people friendly applications. Real-time apps like ‘smart metering, smart road &amp; rail transport management, smart metro, smart water &amp; waste management, smart lighting and traffic control’ etc. can be initiated in those chosen cities, which could serve as blueprints for implementing future projects among the rest, in the years to come. 
	 
	This article has been authored by Samar Singla, CEO and founder of auto rickshaw aggregator <keyword id="2885078" type="UNKNOWN" weightage="20" keywordseo="Jugnoo">Jugnoo</keyword>.

Budget 2016: #Startup Jugnoo has some serious suggestions for the Modi Govt

Considering the massive military modernization, OROP commitments and implementation of Seventh Pay Commission a hike is warranted in allocation in the upcoming Budget 2016 for Defense sector. 
	 
	Post the Gurdaspur and Pathannkot attack, the army’s main focus has been on border management. At present, it is more manpower oriented rather than technological. The border management needs a complete overhaul making it more dependent on state of the art technology. A lesson needs to be learnt from Israel whose border management is mainly monitored through technology and less on manpower. The internal security duties and frequent deployment for natural disasters too need to prepare a lot. 
	 
	More autonomy for Airforce? 
	 The air force is still dependent on the bureaucratic hurdle of getting the <keyword id="6381048" type="ORGANIZATION" weightage="20" keywordseo="Rafale">Rafale</keyword>. Even after the decision of buying the 36 fighters off the shelf, the negotiations are still on. It was expected to be signed during the visit of French President on republic day, but didn’t. The good news though is about the spectacular performance of home made Tejas at the recently completed Bahrain Air Show. Tejas, a 4.5 generation aircraft like Rafale, has always been insufficiently funded by the government and undermined by the IAF with periodic rewriting of ASRs. 
	 
	<keyword id="6355100" type="ORGANIZATION" weightage="20" keywordseo="Indian-Navy">Indian Navy</keyword> 
	 
	The Navy showcased its growing supremacy at the recently concluded International Fleet Review (IFR). The Navy has emerged as an effective tool of Indian diplomacy in past years, making it imperative for policy-makers to redefine the role of the nation’s naval forces in Indian strategy. The Indian Navy’s role is now changed from being local sea control and shore defense orientation, to a more aggressive naval posture. India needs blue water navy not only to meet emerging naval threats from Pakistan and China. It also has to safeguard strategic location at the center of the Indian Ocean as well as to protect its extensive exclusive economic zone. 
	 
	The Indian Navy also has a 15-year plan to achieve full indigenization in all phases of warship construction as a part of Make in India campaign. But it’s a real long time and the Navy to maintain its supremacy in Indian Ocean and to withstand the rising Chinese Navy’s ambition, still needs Submarines, Frigates and helicopters. 
	 
	Make in India 
	 
	Make in India has led to a lot possibilities for private partnership in defense which can bolster manufacturing sector. In a significant boost for the Indian Air Force, Phil Shaw, chief executive of Lockheed Martin India Private Ltd said "We are ready to manufacture F-16 in India and support the Make in India initiative," at the Singapore Airshow 2016. There have been lots of interesting deals that have been signed under Make In India campaign recently: 
	 
	1) BAE Systems to partner with Mahindra for assembling &amp; testing M777 howitzers 
	 
	2) Bharat Forge forms joint venture with Rafael; to manufacture high-tech defence components 
	 
	3)Mahindra, Airbus sign pact to form joint venture for military helicopters 
	 
	Defense allocation: India versus its neighbours 
	 In the neighborhood, Pakistan's defense budget has consistently been getting an almost double-digit growth meanwhile China maintains a defense budget which is three times the size of India. China’s dangerous adventures can gauged from the recent news that is has deployed surface-to-air missiles (<keyword id="694687" type="PERSON" weightage="20" keywordseo="SAMS">SAMs</keyword>) near a Chinese-held feature in the Paracel Island group. As reported by Fox News the missile deployment, based on analysis of satellite imagery; the news has since been confirmed by both the U.S. Department of Defense and Taiwan’s Ministry of National Defense (MND). 
	 
	Incidents of border stand-offs in the North and claiming of Aksai Chin are major irritants. Besides, India's traditional strategy to combat insurgency and terrorism remains military oriented. Combined with the ambition to extend our maritime sphere of interest, these potential threats will require India to give a boost in its defense spending. 
	 
	Looking at India’s neighborhood scenario the government needs to take a call whether it can or cannot hike the defense spending. Our defense strategy should be based on therealities of the money this government can actually spend. 
	 One also needs to look in to the fact that continued government’s fiscal deficit targets and the need to increase the budget allotment on Education, Health and policies for the poor farmers will also be deciding a factor if this Government can actually spend more than 2% of its <keyword id="35050" type="CITY" weightage="20" keywordseo="gdp">GDP</keyword> on defense. 
	 
	The article has been authored by defense analyst Sunil Rampore, who works as a leading consultant in defense and aerospace industry. 
	 
	Image Credit: Indiatimes.com

Budget 2016: Can the Indian defense forces get a little more than 2% of the GDP?

‘Heylo everyone!’
 Everyone looked up. The <keyword id="44284" type="POSITION" weightage="100" keywordseo="Secretary">secretary</keyword> looked up. The <keyword id="210157" type="POSITION" weightage="100" keywordseo="deputy-secretary">deputy secretary</keyword> looked up and so did the assistant secretaries and the associate secretaries. Well, if the secretary looks up, the others had better not keep their head down as this is what gives a wrong signal and allows supersession in offices. The secretary then asked me to go to the reception and meet his secretary. ‘Well, this is quite a wonderful world here,’ I said, ‘full of secretaries.’ 

	No answer.
 

	I walked out and asked the secretary of the secretary if he was indeed the secretary of the secretary and he said, ‘I am indeed.’
 ‘So tell me,’ I said, ‘why is the <keyword id="6484188" type="CITY" weightage="100" keywordseo="Sensex">sensex</keyword> so dependent upon whatever happens in China today?’ 

	‘Ask the secretary.’
 

	‘But you’re the secretary.’
 

	‘I’m only the secretary to the secretary and not the secretary.’
 

	The way the PMO and, in fact, all these government offices function can be quite harrowing for simple folk like me. But this was more than just harrowing… I felt I was inside a pitch-black pipe and rolling with no chance of ever stopping. No wonder they say that the government is invariably rolling well or rolling back something or the other or heads are rolling. Rolling is quite a popular activity in the PMO as well. Do well and you’re on a roll… slip once and see your head roll. The people there role-play. They know their role well and roll in tandem. And thus the government rolls… and often like a roller-coaster, going higher and higher and then doing a noisy free-fall, but always rolling. It rocks and rolls too, really speaking. Rolling is what it does well other than rocking.
 

	And this leads us to rocking. Each of the services has their own rock throwers who do their job well. We’ve just being seeing one long rocking-battle between the defence guys and the civil services… operation OROP, as one veteran told me once. The common chant all over all the ministries is: ‘Rock their boat! Rock their boat!!’ The PMO, I discovered, is no less. They are adept at rocking boats in office and even after they have retired. Read the books that they write (which have, of course been written while they were in service and pretending to do some really complex fiscal jogging to help the nation afloat) and you’ll know how popular the sport of rocking is in a sarkari environment.
 

	Come on now, the government isn’t just about the babus and also has its roles shared by the netas. Though many of them prefer to roll than walk, but that being only an outcome of their physical attributes, they need to be adept at rocking as well. And the opposition is always rocking the decision-making abilities and bill-passing of the party in power. Ironically, the party in power believes they are rock stars and have a rocking performance.
 

	This is so confusing… but Specky, my wife thinks otherwise. She told me the other day that most of these rock stars in our parliament would look up and scan the skies if their leader were to suddenly shout, ‘Rock it!’ So I asked her if a command to ‘rock on’ will probably get them scurrying to manage a guitar!
 

	But let me not digress and let my thoughts not play second fiddle to any other thoughts that our bureaucracy and our politicians light up so easily. I had gone to the PMO to ask them about what the nation needs to do.
 

	The secretary to the secretary heard the word nation and looked up, ‘Ah! What the nation needs to know is that the rupee is like an iceberg, still afloat. Icebergs never drown.’
 

	‘Noble thought,’ I said, and immediately wrote a few lines sitting on a chair in the PMO…
 

	An appeal to the market 
	 

	how much further will the <keyword id="45204" type="UNKNOWN" weightage="100" keywordseo="Market-fall">market fall</keyword>

	for how long shall the Bulls now crawl

	the Sensex that once made me glad

	piles figures and emotions that are bad

	I know this cycle of bad and good

	is a combo of could, would, and should

	but it is time for the fiscal roll to stop

	to hop the chop and pop the drop

	it is time for life to have some bounce

	without fiscal fear ready to pounce!
 

	As I was leaving, I decided to let my readers know that the PMO that I went to was some Prime Merry-making Office that every government office really is.

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