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New Delhi: The government on Friday approved revision of pension of armed forces personnel under 'One Rank One Pension' scheme with retrospective effect from July 1, 2019 and the decision will benefit around 25 lakh pensioners.
The decision taken at a meeting of the Union Cabinet presided over by Prime Minister Narendra Modi will result in an additional annual expenditure of Rs 8,450 crore, according to the defence ministry.
It said Rs 23,638 crore will be paid as arrears to the pensioners from July 2019 to June 2022.
"The Union Cabinet, headed by Prime Minister Narendra Modi, has approved revision of pension of armed forces pensioners/family pensioners under One Rank One Pension (OROP) with effect from July 1, 2019," the ministry said in a statement.
It said the pension of the past pensioners would be re-fixed on the basis of average of minimum and maximum pension of defence forces retirees of calendar year 2018 in the same rank with the same length of service.
The armed forces personnel retired up to June 30, 2019 (excluding those retired pre-maturly (PMR) with effect from July 1, 2014 will be covered under this revision, according to the ministry.
More than 25.13 lakh (including over 4.52 lakh new beneficiaries) pensioners and family pensioners will be benefitted from the decision, it said.
The government had issued notifications in 2015 announcing the implementation of the OROP scheme. It had a provision for reviewing the pensions every five years.
The ex-servicemen have been demanding a revision of the pension.
"The additional pension to defence personnel and family pensioners will entail an additional annual expenditure of Rs 8450 crore," Information and Broadcasting Minister Anurag Thakur told reporters at a briefing.
The ministry said pension for those drawing above the average shall be protected. The benefit would also be extended to family pensioners, including war widows and disabled pensioners, according to the ministry.
It said arrears will be paid in four half-yearly instalments.
"However, all the family pensioners, including those in receipt of special/liberalised family pension and Gallantry award winners, shall be paid arrears in one instalment," the ministry said.
The defence ministry said the estimated annual expenditure for the implementation of the revision has been calculated at approximately Rs 8,450 crore considering 31 per cent dearness allowance.
It said the arrears from July 1, 2019 to December 31, 2021 have been calculated as over Rs 19,316 crore based on dearness allowance of 17 per cent for the period from July 1, 2019 to June 30, 2021 and 31 per cent DA for the period from July 1, 2021 to December 31, 2021.
Arrears from July 1, 2019 to June 30, 2022 have been calculated at Rs 23,638 crore as per the applicable dearness relief.
This expenditure is over and above the ongoing expenditure on account of OROP.