Pay Bills

Agnipath recruitment program: why it can help reduce rising wages and pension bills

On Tuesday, when asked about it, Defense Minister Rajnath Singh said, “We never see the armed forces from the perspective of economies. Whatever we have to spend, the government is ready to do. Our goal is to defend the country’s borders. Whatever needs to be spent will be spent.

The government has allocated or paid more than Rs. 3.3 lakh crore in defense pension since 2020. For years, due to the pension bill, the revenue component of the Ministry of Defense has been higher than the capital expenditure for the modernization of the armed forces. In the budget presented in February, the total defense budget at Rs. 5.25 lakh crore was almost 10% more than the allocation of Rs 4.78 lakh crore last year. Yet, the revenue component of the budget continues to be more than capital expenditure.

The total revenue component allocated this year is Rs 3.65 lakh crore, of which pension is Rs 119,696 crore. The nearly Rs 1.20 lakh crore allocated for the pension was higher than the Rs 1.17 lakh crore in the revised estimates for the pension in 2021-22. The previous year – 2020-21 – the actual pension bill was even higher – Rs 1.28 lakh crore.

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In this year’s budget, the defense pension represents just under a quarter of the total defense budget, as has happened in recent years.

Similarly, the salary paid to the forces has also increased over the years. The military paid over Rs 88,800 crore in (real) wages on pay and allowances in 2020-21, which increased by Rs 10,000 crore last year. The revised army pay and allowance estimates for 2021-2022 were above Rs 99,800 crore.

This year, the government has allocated Rs 1.07 lakh crore for army pay and allowances. The army is the largest of the three forces with a strength of over 11 lakh officers and soldiers.

For the Navy, salary and allowances increased from Rs 6,659 crore in 2020-21 (actual) to Rs. 7,832 crore in 2021-22 (revised) to Rs 9,133 crore (budgeted) this year.

Likewise, the IAF numbers have also increased. After spending Rs 15,984 crore in 2020-21 (actual) on salaries and allowances, it rose to Rs 16,347 crore in 2021-22 (revised), and it allocated Rs 18,346 crore in the budget for this year.

The total salaries and allowances for the three services for this year is close to Rs 1.35 lakh crore. In addition to the Rs 1.2 lakh crore pension, the government this year allocated Rs 2.55 lakh crore for salary and pension, which is more than the Rs 2.33 lakh crore allocated for capital expenditure, to use for the modernization of the defense forces.

To get an idea of ​​how these numbers have ballooned, consider the 2012-13 budget. Ten years ago, the government allocated Rs 39,000 crore for defense pension, Rs 56,000 crore for service salaries and allowances and nearly Rs 80,000 crore for capital expenditure. The total defense budget for the year was Rs 2.38 lakh crore.

A first proposal from the army in 2020 had even made an approximate calculation of the amount of money that could be saved thanks to such a program. The initial proposal envisaged a three-year model. The calculations made in the proposal stated that “comparing the costs incurred by the government for a Sepoy with 17 years of terms of engagement versus (Tour of Duty) Sepoy with 3 years of service, shows that the potential lifetime savings for a single Sepoy is Rs 11.5 (crore) So the savings for just 1,000 jawans could be Rs 11,000 cr which could then be used for the much needed modernization of the Indian Armed Forces.