IWhile the Agneepath scheme is facing challenges on several fronts, let’s take a step back and ask: What are some of the lessons for public policy from this saga?
lesson 1: DATA makes privacy reform difficult
in his book in the service of the republicEconomists Vijay Kelkar and Ajay Shah identified secrecy as a deterrent to state capacity building.
Furthermore, the book proposes a seven-stage model-type pipeline for effecting public policy change. The first phase of this pipeline is “establishment of the statistical system”. Highlighting the importance of this stage, the author writes, “There is a need to systematically capture the facts. Without facts, the whole downstream process breaks down.” That’s the problem with the entire debate on defense pensions—the absence of reliable, baseline data.
Believe it or not, the government does not release defense pension data beyond the total number listed in budget documents. For example, we still do not know how this amount of Rs 1.15 trillion is divided among officers, non-officers and defense civilians. Forget pension, we don’t even have official source in public domain exact number of personnel in our armed forces. There are good reasons to keep information about combat capability, ammunition status, etc. secret. But there is no reason to hide basic data on defense personnel and pensions.
This serious lack of facts is counterproductive to the government itself. Without reliable information, myths abound, mistrust builds up, and stakeholders’ cognitive maps become inaccurate. The need for reforms is not widely appreciated, and the status quo becomes desirable, however harmful it may be.
Take an example. An often repeated argument against defense pension reform is to blame defense civilians. Through the images circulated on WhatsApp groups, many in the armed forces community are convinced that defense civilians account for over 45 per cent of the total defense pension expenditure. And whenever it comes to the issue of defense pension, they refer to this data point.
However, there is no reliable information for this claim. Based on the last available data for 2016-17, the pension of defense civilians was only accept it of the total defense pension expenditure. And even though the pension outflow was somewhat higher for defense civilians, the new defense civilians are now part of the National Pension System (NPS) since 2004. This issue has already been managed for a long time. But in the absence of reliable data, Myths Keep looting. Calls for reforms become zero-sum competition between defense civilians and uniformed personnel, or between development and defense expenditure.
Had the government come out with a status paper on pensions, allowances and personnel, people would be more likely to come on board for reforms.
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lesson 2, Ex-East Fiscal Estimates absolutely necessary
Contrary to seemingly small changes in pension policies, there can be long-term harmful effects. For example, an executive decision in 1976 increased the 10-year service period for a non-officer soldier to 17 years. This move meant that every soldier is eligible for pension by default upon retirement. This decision was the primary reason for the steady increase in pension expenditure. Rising life expectancy (a welcome development) and the One Rank One Pension Scheme contributed to pension expenditure from Rs 228 crore in FY11 to Rs 1.15 lakh crore in FY11.
Here we need an independent financial council, which can help people and politicians to understand the financial consequences of such schemes. before this execution. While India has an institution (Comptroller and Accountant General) to audit policies that are already in place, no organization conducts an independent financial evaluation of government policies before they are approved. 13th14th and 15th Finance commissions have highlighted this institutional gap.
As a result of this absence the lofty promises of the party’s election manifestos become government policies regardless of fiscal stability.
To take this idea further, Rajya Sabha MPs Sujit Kumar, Vedanta Mongar and Vikram Venelkanti as proposed A law that mandates executive decisions undergo a law impact analysis pre- and post-implementation evaluation in Parliament.
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Chapter 3, PTension reforms are like a six-day test match
Pension reforms are known around the world for being notoriously difficult. It is not possible to reduce the pension of the employees while in service. More importantly, such a move would be an immoral breach of trust by the state. Therefore, all pension reform options can only deal with the future employees, saving on the expenses they will have after their retirement. Today’s reforms can control the increase in spending a few decades later, when these not-yet-hired workers will retire. Therefore, it is imperative to exercise caution on pension policies at the initial stage.
Whatever happens with the Agneepath plan, these three meta-lessons are helpful for future improvement efforts.
(Edited by Zoya Bhatti)