Money Matters In The Military – Analysis

By Deepak Sinha

The only viable option for the Modi Government is to go back to the status quo ante as it existed before the Third Pay Commission started tinkering with the issue of civil-military parity. But sooner or later, the Government must take initiatives to move ahead in this direction

When is a scam not a scam? The short answer obviously would be, when it is approved by the Government in power. But then, the question arises: Is that necessarily true?

Take the case of the Non Functional Financial Upgrade or NFFU. Introduced by the Sixth Central Pay Commission (CPC), it allows for the grant of a higher pay scale on non-functional basis to the All India and Organised Group ‘A’ Services till Senior Administrative Grade (SAG) and Higher Administrative Grade (HAG) level after a gap of two years compared to an IAS officer of the same batch, who is posted at the Centre at the SAG or HAG level.

This promotion was independent of organisational requirements, availability of vacancies and level of responsibility or span of control of a post.

In simple terms, it implied that when an IAS officer from a particular batch (a batch includes everyone who joins service the same year) was promoted to a certain rank, all batch-mates from Group A Central Services automatically started drawing the same pay scale two years after that individuals promotion.

Thus, even as those officials continue to discharge their earlier functions, they are upgraded to the higher pay grade of their IAS batch-mate. Effectively, this has meant that every central services officer makes it to top pay grades, albeit with a two-year time lag behind the IAS.

It goes without saying that such a system is contrary to all principles of management and completely without precedent anywhere in the world, in either the Government or the corporate sector.

By all yardsticks, it is a scam of immense proportions on the tax-paying public that funds this excess and useless expenditure. But for the fact that in this case, then Prime Minister Manmohan Singh allowed it to be implemented.

It only showed up the degree of dependency and vulnerability of his scam-ridden Government to bureaucratic shenanigans and quid pro quo.

Commentator Minhaz Merchant called it “the empire of babus”! There is a caveat and it must be mentioned that members of the seventh CPC objected and wanted it terminated, but Justice Mishra, the Chairman, in his wisdom, insisted on its continuance because “it has existed for the last 10 years”.

This issue has once again come to haunt us as a Bench of the Armed Forces Tribunal (AFT) has ruled in favour of the hundred and sixty odd serving officers who approached for the same to also be applicable to the military. The Seventh CPC had not recommended it for the military and the mandarins in the Ministry of Defence (MoD) have been vehemently objecting to it being given to the military ever since they first demanded it in 2010.

The attitude of the Seventh CPC and the MoD towards the military in this regard smacks of parochialism and bias, because the ostensible reason for introducing NFFU, in the first place, was to ensure that stagnation did not adversely impact personnel. It, therefore, made little sense not to give it to those most impacted by lack of promotion avenues, given the military’s pyramidal structure.

In addition, the AFT has also directed that the Armed Forces be treated as an organised Group ‘A’ Service. Obviously, the Government is unlikely to implement these directions anytime soon.

Given its earlier behaviour of indulging in chicanery and gross misrepresentation in the Supreme Court to delay and derail the case of the ‘Dynamic Assured Career Progression’ Scheme pertaining to Military doctors, despite the AFT ruling in their favour some years ago. Even a novice in management will agree that no hierarchical organisation can ever work in a manner in which all personnel equal receive equal compensation regardless of differing responsibilities or positions that they may hold.

If it did how would it ensure that personnel remained motivated or strive to perform so that merit could be rewarded? At the end of the day,all promotions are intimately connected to pay and perks, and if all individuals are to finally receive equal pay then why would individuals strive to take on additional responsibilities and the hard work it entails?

Moreover, there is something morally and ethically reprehensible for people to receive compensation for a job that they are not doing. It was for this very reason that the Chiefs of Staff Committee had opposed the idea of NFFU in 2008 when it was first proposed.

Thus, by no stretch of imagination, is the introduction of NFFU going to help the military in any way. However, in Government pay scales are the determining factor of inter-services parity, and therefore, its implementation for the military cannot be avoided for now.

This is because by its very introduction the civil services have already wreaked havoc to the earlier parity that existed between civilian and military personnel. It has also adversely impacted the very functioning of those organisations such as the Ministry of Defence, the Military Engineering Services and the Border Roads Organisations and the Defence Research and Development Organisation.

It has also disrupted smooth functioning of the military with other organisations within the security establishment of the country. The only viable option to stop this headlong rush to the bottom by the civil services and the other Central Government services, including the military, is for the Narendra Modi Government to do away with NFFU totally and revert to status quo ante as it existed before the Third Pay Commission started tinkering with the issue of civil-military parity.

The question that arises is: Does Prime Minister Modi, or for that matter any other politician, have the nerve to take such a step as that would immediately raise the hackles of all those affected? This is especially since they are so completely dependent on their cooperation and goodwill for their functioning.

That apart, there can be little doubt that a scam always remains a scam, when advantage of unsuspecting tax-payers is taken, regardless of whether it has political patronage and Government sanction.

This article was originally published in Daily Pioneer


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Observer Research Foundation

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

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