Cut army pension bill? Proceed with caution


National security and military readiness are discussed in purely financial terms, with a focus on reducing the pension bill.

India’s budget for FY2022-23 featured Rs. 5.25 crore for defense, which includes the defense pension component of about Rs. 1.2 crore. This pension component has been the subject of considerable debate in political, bureaucratic, and think-tank circles, which hold the view that if the pension component can be reduced, more of the defense budget could be made available for defense modernization and capital raising. Since the Indian Army has the largest manpower, the focus has been on finding measures that could lower the army’s pension bill.
To that end, in 2019, an army veteran, Lt. Gen. P. Menon, along with Pranay Kotasthane, both from the Takshashila Institute, authored a discussion paper recommending a “reverse induction model” to lower the army’s pension bill. Broadly speaking, the proposal was that personnel recruited into the Central Armed Police Forces (CAPF) would be enlisted in the Army for a period of 7 years, after which they would be returned to the particular police unit that enrolled them. In principle, this idea is not new. The Army had long recommended that personnel retiring from the Army could be redirected to the CAPF, but this proposal met with strong opposition from police forces. The inverse induction model also finds little traction and is resisted by the CAPF.
Another proposal making the rounds is the “Tour of Duty” (TOD) concept, in which young soldiers are enrolled for a period of three to five years. Romantically named “Agnipath”, the soldiers recruited in this proposal will be known as “Agniveers”, following the classic business model of giving standard military jobs a fancy name. A small proportion of Agniveer will be retained by the army, some will find their way into jobs in other sectors of government, but the majority will have to fend for themselves once their service is over. However, you will receive a small lump sum as compensation for the service provided.
What is inherently wrong with these proposals is that national security and military readiness are discussed in purely financial terms, with the emphasis on lowering pension bills. The military is the last bastion of a nation’s security. Therefore, the main focus of the Indian Armed Forces must be on the effectiveness of the armed forces and not just on pension spending. Seen from another perspective, the discussion will be all inclusive and will not be limited to a single agenda.
The TOD concept is inherently flawed. Recruiting people for short periods of three to five years will adversely affect the operability of units, especially combat and combat support weapons. Troops in combat excel when the unit fights as a cohesive whole and when the bond is strong, based on esprit de corps, camaraderie, and unit ethos. All these aspects will gradually erode with the implementation of the TOD concept. The rapid turnover of soldiers after only three to five years of service means units will always be on the move, with raw recruits replacing those who have just learned the basics of warfare. The Commander’s (CO) management problem will increase exponentially as his focus shifts to training and managing the constant arrival of new recruits, and then determining who to keep and who to leave out. Those left out will harbor resentment toward the unit and the army, and are unlikely to be good ambassadors for the military. It will also erode the bond between serving soldiers and veterans, affecting serving soldiers’ motivation levels.
These are the intangibles that cannot be quantified, but these intangibles are the cutting edge in combat and can mean the difference between victory and defeat. We must be mindful of the path we tread lest we lose our edge in battle. While the TOD concept will reduce pension obligations to some extent, the cost of training will increase as higher turnover means we need to increase the entire cycle of recruiting and training workers by a factor of four or five.
The more logical way to approach what is popularly referred to as “the best value for money” is to examine the effectiveness of the force. The entire range of research, development and production of weapon systems for both the public and private sectors comes into play – as does troop structuring and maintenance. The Prime Minister’s push for an Aatmanirbhar Bharat in arms production will in itself be a far more effective tool for improving the effectiveness of the armed forces while reducing costs than the proposed TOD concept. Combine this with weapon exports and we have a total game changer at our fingertips. Here one should also look at German medium-sized companies, which have become a model for economic success. For something like this to be successful in India, we need a very proactive bureaucracy to act as an enabler and support such companies. Unfortunately, until now, the private sector has been hampered by India’s bureaucratic maze, leading many entrepreneurs to simply close up shop and relocate to other countries where their talents are better valued.
We must also examine how future conflicts will unfold and restructure our armed forces accordingly. Innovation in battlefield tactics and strategy is the name of the game, and military leadership needs to think about and prepare for the possible changes that will take place on the battlefield at least two decades in advance. While future warfare will have a large component of non-contact warfare, the physical blood and violence of warfare will still remain a constant. For the non-contact part of warfare, attracting individuals at various levels for short-term contracts from the private sector may be a better option, especially in the emerging field of cyber warfare, artificial intelligence (AI) robotics and others. A holistic long-term view will give the Indian armed forces the capability and wherewithal to defend the nation against external threats. Tampering with the system and only looking at the financial aspects could lead to total disaster in the long run. We have suffered from foreign invaders ruling our land for the last millennium. We cannot walk this path again.
Also, let’s remember that maintaining a young army comes with a cost. The nation must be willing to bear these costs.

The author is an Army Veteran who is currently the Director of the India Foundation.


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