Pension costs rising; Indian Ocean has threats: Defence Secretary

Ajay Banerjee
Tribune News Service
New Delhi, May 21

Defence Secretary Dr Ajay Kumar on Thursday said ways are being found to reduce the wage and pension bill at the Ministry of Defence.

Separately, while addressing a wider strategic issue, he said the Indian Ocean Region was becoming “a threat” like the South China Sea (SCS).

The latter was the obvious unstated reference to China’s recent activities in the Indian Ocean, including building artificial islands near Maldives, and the ongoing tussle in the contested hydro-carbon rich waters of the SCS.

He delivered a talk on ‘COVID-19, Resource Crunch and Defence Modernisation’ and later answered questions at a ‘web-seminar’ conducted by the Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA), here.

On the Indian Ocean, he was answering questions on ‘blue economy’ euphuism for marine, fishing, minerals and energy, when he said security needs in Indian Ocean will have to be addressed, adding that the means of doing it are best left to experts.

On pensions he said expenses rose from some Rs 32,000 crore in few years back to Rs 1,33,000 crore.

“We need money for committed expenses… We have to look at ways to reduce pension and wage bill to free money for capital and modernisation,” he said.

Possible extension of service (for jawans) which will reduce pension bill and long-term pension liabilities, Dr Kumar said. 

On budgetary requirements, he said the COVID-19 was a passing phase and said the share of capital procurement—new weapons and equipment — has decreased from 40 per cent of the budget in 2010-11 and is down to 33 per cent.

The Finance Commission has been tasked to see how additional resources can be mobilised for defence sector.

Reduction of civilian manpower has started, 9,000 posts have been abolished in the Military Engineering Services (MES), he said.

“We are examining other civilian areas for reduction,” Dr Kumar said answering a question.

“We have not taken any decision to reduce manpower of armed forces, so there is no question of political will,” he said clarifying on being asked if there could be a political fallout of this.

The non-salary expenses under the revenue head have grown incrementally and dependence is on import while the transfer of technology items produced in India are costing more than the imported ones, he said.

The Lt Gen DB Shekatkar committee suggested reforms and several areas have been identified, he added.

“We are looking at outsourcing those activities which can reduce revenue cost without impacting operations,” Dr Kumar said.

Military farms are being closed down while outsourcing has been approved for base workshops. In NCC we are intending to send back some 3,000 serving personnel to active duty and employ ex-servicemen, he said.

Dr Kumar said, "Our software industry is doing $1.5 to $2 billion dollars of work for foreign manufacturers, this segment of technology needs to be tapped. Land monetisation models exist and that is being looked into to develop housing." 

On being asked about lateral induction of retiring servicemen into other cadres, the Defence Secretary assured, that the issue was being looked at, how recruitment rules of other cadres will need to be changed for ‘group B and A’ employees.

He talked about exports saying the figure jumped from Rs 1500 crore a few years ago to Rs 11,000 crore and 80 per cent of growth came from the private sector.

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