Supreme Court directs govt. to clear ₹28,000crore OROP arrears by February next year

Context:

The Supreme Court on March 20 gave the government leeway to pay in installments ₹28,000 crore in arrears due to veterans under the One Rank One Pension (OROP) scheme.
The staggered payment of OROP arrears would be made to various categories of eligible pensioners, totaling 21 lakh persons, from April 2023 till February 2024.
The entirety of the arrears was supposed to be paid by March 2023, according to an earlier deadline given by the court.

What is One rank, one pension?

OROP means that any two military personnel retiring at the same rank, with the same years of service, must get an equal pension.
While this might appear almost obvious, there are several reasons why two military personnel who may have retired at the same rank with the same years of service, may get different pensions.
Military personnel across the three services fall under two categories:
- The officers and the other ranks.
- The other ranks, which are soldiers, usually retire at age 35. Unlike government employees who retire close to 60, soldiers can thus miss out on the benefits from subsequent pay commissions. And since pensions are based on the last drawn salary, pensions, too are impacted adversely.
- Similarly, the age when officers in the military retire depends upon their ranks. The lower the rank, the earlier they superannuate. But the problem is not just that.
Benefits of Pay commissions not reaching Servicemen:
- The benefits of the successive pay commissions were not passed to servicemen who had retired earlier.
- Pensions differed for those who had retired at the same rank, with the same years of service, but years apart.

After the government’s December 2022 decision — further reiterated by a government order issued in January this year — a group of ex-servicemen moved the apex court seeking that the arrears be paid in a single instalment instead of four instalments.
The January order stated that the OROP arrears would be paid in four half-yearly installments.

The ex-servicemen in its plea said the Centre, by issuing this order, subverted the apex court’s March 2022 order, in which it had said that arrears payable to all eligible pensioners of the armed forces shall be computed and paid over accordingly within a period of three months.

As per officials in the government, the cabinet note, which was approved by the union cabinet last year, had mentioned that installments be cleared in four installments, barring exceptions.
While the government did make an appropriation of 28,138 crores in the budget for 2023-24 for payment of OROP arrears, officials explained this does not mean that this entire budget is available to the government for a lump sum payment.
They said for every installment paid, the Ministry of Finance will have to balance cash inflows and outflows — in the absence of which the government might need to go for additional borrowings to fill the deficit. Currently, the government is not in favour of such a move.