Centre's dearness allowance move to save Rs 11,000 crore from military

An army jawan guards at the LoC in Mendhar Sector of Poonch district
Serving soldiers, sailors and airmen of the three defence services, and retired veterans and their families who draw pensions, will bear the brunt of the government’s decision.

The salary freeze will affect the military’s 1,500,000 serving men and women — 1,265,000 in the Army, 83,500 in the Navy and 155,000 in the Air Force.

Meanwhile, the freeze in pension hike will affect 2,587,000 military pensioners and about 600,000 civilians drawing defence pensions. The decision does not violate the “one rank, one pension” principle because pensions have been frozen across the board.

With the defence budget for 2020-21 allocating Rs 142,292 crore for salaries and Rs 133,825 for pensions, the suspension of DA/DR increases will save at least Rs 11,000 crore over a year. The savings could be as much as Rs 13,000-14,000 if inflation rises sharply.

All defence employees have already contributed a day’s salary to the PM-CARES fund. This freeze on salaries and pensions, however, will cost them significantly more – about Rs 15,000 to Rs 20,000 in a year for an entry-level soldier, sailor or airman.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel