The proposed Direct Taxes Code (DTC) tabled in Parliament on Monday signals some key changes for you. Women taxpayers would enter a new taxing era, where they won’t get the exemption edge that they have been enjoying till now. While the overall deductions have moved up only marginally by `15,000, some instruments have been moved out from the deduction ambit.
“I feel this is a diluted version of the first draft. In terms of tax exemption limit and deductions, the difference is not huge,” says Nikhil Bhatia, executive director (direct tax), PricewaterhouseCooper.
The income-tax exemption limit for both men and women has been moved up to `2 lakh. While for men this is a jump of `40,000 from their existing limit of `1.6 lakh, women’s benefit has been restricted only to `10,000 from their current `1.9 lakh limit. Senior citizens, too, would see a rise of only `10,000—the new exemption limit has been raised to `2.5 lakh from the current `2.4 lakh.
Exemption means the income threshold before which no income-tax is due. So, a man earning `3 lakh a year will have to pay tax only on `1 lakh; `2 lakh becomes his tax-free income or income exempted from tax. Add a deduction of `1 lakh and he can bring his tax liability to nil. Also, any individual claiming a deduction of `1.5 lakh can ensure that `3.5 lakh of his income is tax-free.
Deductions up to `1 lakh will be available on savings, pension funds and pension schemes. These include long-term savings options, such as the Employees’ Provident Fund, Public Provident Fund, other government approved provident funds and contributions made to the tier I structure of the New Pension System.
Another `50,000 will be available on life insurance and health insurance premiums and tuition fees. Additionally, the interest on loans taken for higher education is also deductible. However, premiums paid on a life insurance policy can’t exceed 5% of the sum assured.
Earlier, the total deduction came to `1,35,000, including instruments under section 80C up to `1 lakh, infrastructure bonds up to `20,000 and health insurance up to `15,000. Now, it comes to `1.5 lakh.
Home loan principal: The deduction up to `1.5 lakh on interest paid on home loans continues. However, the principal on home loans is not eligible for deduction any more.
Equity-linked savings scheme (ELSS): In a blow to the mutual fund industry, the tax-friendly ELSS is out of the deduction ambit.
Others: Five-year fixed deposits (FDs), which were earlier included in `1 lakh deduction list, are out. Infrastructure bonds, introduced in this year’s Budget for an additional deduction of `20,000, seem to have a short life. They, too, are not part of the new list.
“The deduction of up to `1 lakh under DTC is applicable on approved funds that currently consist of provident funds, pension and superannuation schemes. It seems to suggest that ELSS and infrastructure bonds will no longer enjoy tax deduction,” says Bhatia.
The proposed DTC brings cheer to those who have made capital gains. The previous version of the DTC proposed to tax a portion of long-term capital gains (LTCG), the current proposal has removed it altogether. For listed securities, LTCG will be nil as is the norm now.
In case of short-term capital gains (STCG), gains made within a year, 50% of the profit will be taxed at your tax slab. Effectively, that would mean a tax rate of 5%, 10% and 15% for those in tax slabs of 10%, 20% and 30%, respectively. At present, STCG is taxed at 15%, which is levied on the entire amount.
This means that those in lower tax bracket would gain out of this move. Says Sudhir Kapadia, tax market leader, Ernst and Young, a consulting firm: “Investors in the lower tax bracket will stand to gain as they will pay less than the current 15%.”
The rich will have to pay a wealth tax if the proposed DTC is passed in its present form. Net assets in excess of `1 crore will be taxed every year at the rate of 1%. Net assets is the difference between the value of all assets owned by a person (including a house, land, car, yacht, helicopter, jewellery, furniture, utensils, archaeological collections, paintings, cash and deposits in banks outside India, among others) and debts associated with the above assets.
The tax will have to be paid by the date for filing of tax returns. There are a plenty of exclusions in this DTC clause, so do talk to your financial planner before you panic.
The restructuring of deductions is aimed at encouraging long-term savings. By increasing the deduction limit for pension products, the government clearly aims at boosting retirement savings. Also, removal of short-term tax-saving tools, such as ELSS and five-year FDs, shows that the new focus period is long term.
Also, with deductions on insurance premiums limited to `50,000, sticking to the simplest and cheapest term insurance would make more sense for you. Earlier, agents often pushed insurance products as a tax-saving tool; they can’t use that pretext any more.
Deepti Bhaskaran, deepti.bh@livemint.com
Sep 17, 2010
A VERY DAMNING ARTICLE ON INDIA & TRUE TOO
Reflections on India By Sean Paul Kelley
Sean Paul Kelley is a travel writer, former radio host, and before that an asset manager for a Wall Street investment bank that is still (barely) alive. He recently left a fantastic job in Singapore working for Solar Winds, a software company based out of Austin to travel around the world for a year (or two). He founded The Agonist, in 2002, which is still considered the top international affairs, culture and news destination for progressives. He is also the Global Correspondent for The Young Turks, on satellite radio and Air America .
If you are Indian, or of Indian descent, I must preface this post with a clear warning: you are not going to like what I have to say. My criticisms may be very hard to stomach. But consider them as the hard words and loving advice of a good friend. Someone who’s being honest with you and wants nothing from you.
These criticisms apply to all of India except Kerala and the places I didn’t visit, except that I have a feeling it applies to all of India , except as I mentioned before, Kerala.
Lastly, before anyone accuses me of Western Cultural Imperialism, let me say this: if this is what India and Indians want, then hey, who am I to tell them differently. Take what you like and leave the rest. In the end it doesn’t really matter, as I get the sense that Indians, at least many upper class Indians, don’t seem to care and the lower classes just don’t know any better, what with Indian culture being so intense and pervasive on the sub-continent. But here goes, nonetheless.
India is a mess. It’s that simple, but it’s also quite complicated. I’ll start with what I think are India ’s four major problems–the four most preventing India from becoming a developing nation–and then move to some of the ancillary ones.
First, pollution. In my opinion the filth, squalor and all around pollution indicates a marked lack of respect for India by Indians. I don’t know how cultural the filth is, but it’s really beyond anything I have ever encountered. At times the smells, trash, refuse and excrement are like a garbage dump.
Right next door to the Taj Mahal was a pile of trash that smelled so bad, was so foul as to almost ruin the entire Taj experience. Delhi , Bangalore and Chennai to a lesser degree were so very polluted as to make me physically ill. Sinus infections, ear infection, bowels churning was an all to common experience in India . Dung, be it goat, cow or human fecal matter was common on the streets. In major tourist areas filth was everywhere, littering the sidewalks, the roadways, you name it. Toilets in the middle of the road, men urinating and defecating anywhere, in broad daylight.
Whole villages are plastic bag wastelands. Roadsides are choked by it. Air quality that can hardly be called quality. Far too much coal and far to few unleaded vehicles on the road. The measure should be how dangerous the air is for one’s health, not how good it is. People casually throw trash in the streets, on the roads.
The only two cities that could be considered sanitary in my journey were Trivandrum –the capital of Kerala–and Calicut . I don’t know why this is. But I can assure you that at some point this pollution will cut into India ’s productivity, if it already hasn’t. The pollution will hobble India ’s growth path, if that indeed is what the country wants. (Which I personally doubt, as India is far too conservative a country, in the small ‘c’ sense.)
The second is sue , infrastructure, can be divided into four subcategories: roads, rails and ports and the electrical grid. The electrical grid is a joke. Load shedding is all too common, everywhere in India . Wide swaths of the country spend much of the day without the electricity they actually pay for. With out regular electricity, productivity, again, falls.
The ports are a joke. Antiquated, out of date, hardly even appropriate for the mechanized world of container ports, more in line with the days of longshoremen and the like. Roads are an equal disaster. I only saw one elevated highway that would be considered decent in Thailand , much less Western Europe or America . And I covered fully two thirds of the country during my visit.
There are so few dual carriage way roads as to be laughable. There are no traffic laws to speak of, and if there are, they are rarely obeyed, much less enforced. A drive that should take an hour takes three. A drive that should take three takes nine. The buses are at least thirty years old, if not older.
Everyone in India , or who travels in India raves about the railway system. Rubbish. It’s awful. Now, when I was there in 2003 and then late 2004 it was decent. But in the last five years the traffic on the rails has grown so quickly that once again, it is threatening productivity. Waiting in line just to ask a question now takes thirty minutes. Routes are routinely sold out three and four days in advance now, leaving travelers stranded with little option except to take the decrepit and dangerous buses.
At least fifty million people use the trains a day in India . 50 million people! Not surprising that waitlists of 500 or more people are common now.
The rails are affordable and comprehensive but they are overcrowded and what with budget airlines popping up in India like Sadhus in an ashram the middle and lowers classes are left to deal with the overutilized rails and quality suffers. No one seems to give a shit.
Seriously, I just never have the impression that the Indian government really cares. Too interested in buying weapons from Russia , Israel and the US I guess.
The last major problem in India is an old problem and can be divided into two parts that’ve been two sides of the same coin since government was invented: bureaucracy and corruption.
It take triplicates to register into a hotel. To get a SIM card for one’s phone is like wading into a jungle of red-tape and photocopies one is not likely to emerge from in a good mood, much less satisfied with customer service.
Getting train tickets is a terrible ordeal, first you have to find the train number, which takes 30 minutes, then you have to fill in the form, which is far from easy, then you have to wait in line to try and make a reservation, which takes 30 minutes at least and if you made a single mistake on the form back you go to the end of the queue, or what passes for a queue in India.
The government is notoriously uninterested in the problems of the commoners, too busy fleecing the rich, or trying to get rich themselves in some way shape or form. Take the trash for example, civil rubbish collection authorities are too busy taking kickbacks from the wealthy to keep their areas clean that they don’t have the time, manpower, money or interest in doing their job.
Rural hospitals are perennially understaffed as doctors pocket the fees the government pays them, never show up at the rural hospitals and practice in the cities instead.
I could go on for quite some time about my perception of India and its problems, but in all seriousness, I don’t think anyone in India really cares. And that, to me, is the biggest problem. India is too conservative a society to want to change in any way.
Mumbai, India ’s financial capital is about as filthy, polluted and poor as the worst city imaginable in Vietnam , or Indonesia –and being more polluted than Medan , in Sumatra is no easy task. The biggest rats I have ever seen were in Medan !
One would expect a certain amount of, yes, I am going to use this word, backwardness, in a country that hasn’t produced so many Nobel Laureates, nuclear physicists, imminent economists and entrepreneurs. But India has all these things and what have they brought back to India with them? Nothing.
The rich still have their servants, the lower castes are still there to do the dirty work and so the country remains in stasis. It’s a shame. Indians and India have many wonderful things to offer the world, but I’m far from sanguine that India will amount to much in my lifetime.
Now, have at it, call me a cultural imperialist, a spoiled child of the West and all that. But remember, I’ve been there. I’ve done it. And I’ve seen 50 other countries on this planet and none, not even Ethiopia , have as long and gargantuan a laundry list of problems as India does.
And the bottom line is, I don’t think India really cares. Too complacent and too conservative.
From: Brig K P G Kurup
Date: Sunday, 12 September, 2010, 10:52 AM
Sean Paul Kelley is a travel writer, former radio host, and before that an asset manager for a Wall Street investment bank that is still (barely) alive. He recently left a fantastic job in Singapore working for Solar Winds, a software company based out of Austin to travel around the world for a year (or two). He founded The Agonist, in 2002, which is still considered the top international affairs, culture and news destination for progressives. He is also the Global Correspondent for The Young Turks, on satellite radio and Air America .
If you are Indian, or of Indian descent, I must preface this post with a clear warning: you are not going to like what I have to say. My criticisms may be very hard to stomach. But consider them as the hard words and loving advice of a good friend. Someone who’s being honest with you and wants nothing from you.
These criticisms apply to all of India except Kerala and the places I didn’t visit, except that I have a feeling it applies to all of India , except as I mentioned before, Kerala.
Lastly, before anyone accuses me of Western Cultural Imperialism, let me say this: if this is what India and Indians want, then hey, who am I to tell them differently. Take what you like and leave the rest. In the end it doesn’t really matter, as I get the sense that Indians, at least many upper class Indians, don’t seem to care and the lower classes just don’t know any better, what with Indian culture being so intense and pervasive on the sub-continent. But here goes, nonetheless.
India is a mess. It’s that simple, but it’s also quite complicated. I’ll start with what I think are India ’s four major problems–the four most preventing India from becoming a developing nation–and then move to some of the ancillary ones.
First, pollution. In my opinion the filth, squalor and all around pollution indicates a marked lack of respect for India by Indians. I don’t know how cultural the filth is, but it’s really beyond anything I have ever encountered. At times the smells, trash, refuse and excrement are like a garbage dump.
Right next door to the Taj Mahal was a pile of trash that smelled so bad, was so foul as to almost ruin the entire Taj experience. Delhi , Bangalore and Chennai to a lesser degree were so very polluted as to make me physically ill. Sinus infections, ear infection, bowels churning was an all to common experience in India . Dung, be it goat, cow or human fecal matter was common on the streets. In major tourist areas filth was everywhere, littering the sidewalks, the roadways, you name it. Toilets in the middle of the road, men urinating and defecating anywhere, in broad daylight.
Whole villages are plastic bag wastelands. Roadsides are choked by it. Air quality that can hardly be called quality. Far too much coal and far to few unleaded vehicles on the road. The measure should be how dangerous the air is for one’s health, not how good it is. People casually throw trash in the streets, on the roads.
The only two cities that could be considered sanitary in my journey were Trivandrum –the capital of Kerala–and Calicut . I don’t know why this is. But I can assure you that at some point this pollution will cut into India ’s productivity, if it already hasn’t. The pollution will hobble India ’s growth path, if that indeed is what the country wants. (Which I personally doubt, as India is far too conservative a country, in the small ‘c’ sense.)
The second is sue , infrastructure, can be divided into four subcategories: roads, rails and ports and the electrical grid. The electrical grid is a joke. Load shedding is all too common, everywhere in India . Wide swaths of the country spend much of the day without the electricity they actually pay for. With out regular electricity, productivity, again, falls.
The ports are a joke. Antiquated, out of date, hardly even appropriate for the mechanized world of container ports, more in line with the days of longshoremen and the like. Roads are an equal disaster. I only saw one elevated highway that would be considered decent in Thailand , much less Western Europe or America . And I covered fully two thirds of the country during my visit.
There are so few dual carriage way roads as to be laughable. There are no traffic laws to speak of, and if there are, they are rarely obeyed, much less enforced. A drive that should take an hour takes three. A drive that should take three takes nine. The buses are at least thirty years old, if not older.
Everyone in India , or who travels in India raves about the railway system. Rubbish. It’s awful. Now, when I was there in 2003 and then late 2004 it was decent. But in the last five years the traffic on the rails has grown so quickly that once again, it is threatening productivity. Waiting in line just to ask a question now takes thirty minutes. Routes are routinely sold out three and four days in advance now, leaving travelers stranded with little option except to take the decrepit and dangerous buses.
At least fifty million people use the trains a day in India . 50 million people! Not surprising that waitlists of 500 or more people are common now.
The rails are affordable and comprehensive but they are overcrowded and what with budget airlines popping up in India like Sadhus in an ashram the middle and lowers classes are left to deal with the overutilized rails and quality suffers. No one seems to give a shit.
Seriously, I just never have the impression that the Indian government really cares. Too interested in buying weapons from Russia , Israel and the US I guess.
The last major problem in India is an old problem and can be divided into two parts that’ve been two sides of the same coin since government was invented: bureaucracy and corruption.
It take triplicates to register into a hotel. To get a SIM card for one’s phone is like wading into a jungle of red-tape and photocopies one is not likely to emerge from in a good mood, much less satisfied with customer service.
Getting train tickets is a terrible ordeal, first you have to find the train number, which takes 30 minutes, then you have to fill in the form, which is far from easy, then you have to wait in line to try and make a reservation, which takes 30 minutes at least and if you made a single mistake on the form back you go to the end of the queue, or what passes for a queue in India.
The government is notoriously uninterested in the problems of the commoners, too busy fleecing the rich, or trying to get rich themselves in some way shape or form. Take the trash for example, civil rubbish collection authorities are too busy taking kickbacks from the wealthy to keep their areas clean that they don’t have the time, manpower, money or interest in doing their job.
Rural hospitals are perennially understaffed as doctors pocket the fees the government pays them, never show up at the rural hospitals and practice in the cities instead.
I could go on for quite some time about my perception of India and its problems, but in all seriousness, I don’t think anyone in India really cares. And that, to me, is the biggest problem. India is too conservative a society to want to change in any way.
Mumbai, India ’s financial capital is about as filthy, polluted and poor as the worst city imaginable in Vietnam , or Indonesia –and being more polluted than Medan , in Sumatra is no easy task. The biggest rats I have ever seen were in Medan !
One would expect a certain amount of, yes, I am going to use this word, backwardness, in a country that hasn’t produced so many Nobel Laureates, nuclear physicists, imminent economists and entrepreneurs. But India has all these things and what have they brought back to India with them? Nothing.
The rich still have their servants, the lower castes are still there to do the dirty work and so the country remains in stasis. It’s a shame. Indians and India have many wonderful things to offer the world, but I’m far from sanguine that India will amount to much in my lifetime.
Now, have at it, call me a cultural imperialist, a spoiled child of the West and all that. But remember, I’ve been there. I’ve done it. And I’ve seen 50 other countries on this planet and none, not even Ethiopia , have as long and gargantuan a laundry list of problems as India does.
And the bottom line is, I don’t think India really cares. Too complacent and too conservative.
From: Brig K P G Kurup
Date: Sunday, 12 September, 2010, 10:52 AM
ANOMALIES IN MAJORS PENSION ( PRE 2006 RETIREE) REMOVED
Holding that the pension shall not be less than 50 per cent of the minimum pay within the pay-band, the Armed Forces Tribunal (AFT) today allowed a petition filed by majors and equivalents that would now entitle them to enhanced pension.
With the removal of existing anomalies that had resulted in majors, who retired prior to 2006, getting pension lower than even junior commissioned officers, they would now be paid an additional basic pension of about Rs 5,000 per month, besides consequential benefits. The order affects a substantial number of officers of the three services who had retired in the rank of major prior to 2006.
After the implementation of the Sixth Pay Commission (SPC), the pension of majors was fixed at Rs 14,100 per month. This was less than what JCOs, four ranks below their grade, have been getting (Rs 16,145).
The anomaly in pension fixation arose because the minimum of the entire pay-band (PB-3) was taken into account while fixing the pension instead of considering the minimum of the pay-band applicable to majors. PB-3 (Rs 15,600-39,100) includes officers of the ranks of lieutenant to major and equivalents in other services. The minimum scale of major post-SPC is Rs 23,810.
The petitioners had contended that the existing basic pay, inclusive of grade pay and military service pay, worked out to be Rs 36,410, hence their pension at the stipulated 50 per cent of basic worked out to be Rs 18,205 per month, to which they were entitled.
In December, 2004, all majors with 13-year experience and having requisite qualifications were promoted to the rank of lieutenant colonel (time scale) and the policy has continued since then. Following the implementation of the Sixth Pay Commission, all 35 categories of services were merged into four pay bands in which lieutenant colonels were initially placed in pay band-3, but later moved to pay band-4.
The pension of lieutenant colonel is fixed at Rs 25,700 whereas that of majors who retired before 2006 is Rs 14,100, creating a huge difference of Rs 11,600, the petitioners claimed. Prior to the Sixth Pay Commission, the difference was just Rs 950.
In fact, the Department of Pensions (DoP) had raised the issue of incorrect interpretation of pension fixation rules of pre-2006 majors with the Department of Expenditure (DoE) and that it needed to be corrected. Despite the fact that the ministers of finance as well as personnel were in favour of the correction, the bureaucracy in the Ministry of Finance put a spanner in the work. The case was taken up time and again by the DoP, but was always rejected by the DoE.
Vijay Mohan
Tribune News Service
Chandigarh 14 Sep 10
With the removal of existing anomalies that had resulted in majors, who retired prior to 2006, getting pension lower than even junior commissioned officers, they would now be paid an additional basic pension of about Rs 5,000 per month, besides consequential benefits. The order affects a substantial number of officers of the three services who had retired in the rank of major prior to 2006.
After the implementation of the Sixth Pay Commission (SPC), the pension of majors was fixed at Rs 14,100 per month. This was less than what JCOs, four ranks below their grade, have been getting (Rs 16,145).
The anomaly in pension fixation arose because the minimum of the entire pay-band (PB-3) was taken into account while fixing the pension instead of considering the minimum of the pay-band applicable to majors. PB-3 (Rs 15,600-39,100) includes officers of the ranks of lieutenant to major and equivalents in other services. The minimum scale of major post-SPC is Rs 23,810.
The petitioners had contended that the existing basic pay, inclusive of grade pay and military service pay, worked out to be Rs 36,410, hence their pension at the stipulated 50 per cent of basic worked out to be Rs 18,205 per month, to which they were entitled.
In December, 2004, all majors with 13-year experience and having requisite qualifications were promoted to the rank of lieutenant colonel (time scale) and the policy has continued since then. Following the implementation of the Sixth Pay Commission, all 35 categories of services were merged into four pay bands in which lieutenant colonels were initially placed in pay band-3, but later moved to pay band-4.
The pension of lieutenant colonel is fixed at Rs 25,700 whereas that of majors who retired before 2006 is Rs 14,100, creating a huge difference of Rs 11,600, the petitioners claimed. Prior to the Sixth Pay Commission, the difference was just Rs 950.
In fact, the Department of Pensions (DoP) had raised the issue of incorrect interpretation of pension fixation rules of pre-2006 majors with the Department of Expenditure (DoE) and that it needed to be corrected. Despite the fact that the ministers of finance as well as personnel were in favour of the correction, the bureaucracy in the Ministry of Finance put a spanner in the work. The case was taken up time and again by the DoP, but was always rejected by the DoE.
Vijay Mohan
Tribune News Service
Chandigarh 14 Sep 10
LT CDR'S CASE : ANOTHER VICTORY
Respected Veterans,
We are pleased to inform that we have won the case for the enhanced Pension payable to Lt Cdrs, filed by Cdr Avtar Singh and well fought by Cmde Sukhjinder Singh. The judgment was pronounced this morning by the tribunal bench headed by Justice Mathur and Lt Gen M Naidu. Copy of the judgment will be available only in a couple of days and the same will also be promulgated for your info.
The Lt Commanders will now be entitled to a pension of 50% of what the serving Lt Commander in service are drawing. It may make a difference of about Rs 4000 in their pensions.
We were awaiting the outcome of this case to file the Case for the Cmdes / Brigs etc and the needful will be done shortly. Cmde Sukhjinder will be steering this case and NFDC will also be a litigant.
This is another battle won for the Veterans with the help of the judicial process but there are good reasons to believe that as is now the norm, the MOD will file an SLP.
Vice Admiral Harinder Singh
We are pleased to inform that we have won the case for the enhanced Pension payable to Lt Cdrs, filed by Cdr Avtar Singh and well fought by Cmde Sukhjinder Singh. The judgment was pronounced this morning by the tribunal bench headed by Justice Mathur and Lt Gen M Naidu. Copy of the judgment will be available only in a couple of days and the same will also be promulgated for your info.
The Lt Commanders will now be entitled to a pension of 50% of what the serving Lt Commander in service are drawing. It may make a difference of about Rs 4000 in their pensions.
We were awaiting the outcome of this case to file the Case for the Cmdes / Brigs etc and the needful will be done shortly. Cmde Sukhjinder will be steering this case and NFDC will also be a litigant.
This is another battle won for the Veterans with the help of the judicial process but there are good reasons to believe that as is now the norm, the MOD will file an SLP.
Vice Admiral Harinder Singh
PAY TO ARMED FORCES
We need a permanent solution to this tussle over emoluments so that the armed forces need only confront the enemies of the nation, says T.R.Ramaswami IAS.
In the continuing debate on pay scales for the armed forces, there has to be a serious and transparent effort to ensure that the country is not faced with an unnecessary civil-military confrontation.That effort will have to come from the netas, who are the real and true bosses of the armed forces and not the civil bureaucracy. A solution may lie in what follows. This country requires the best armed forces, the best police and the best civil service. In fact that is what the British ensured.. By best one means that a
person chooses which service he wants as per his desires/capabilities and not based on the vast differential in prospects in the variousservices.
How much differential is there?
Take Maharashtra, one of the most parsimonious with police ranks thus still retaining some merit -
The 1981 IPS batch have become 3-star generals, the 1987 are 2-star and the 1994 1-star.
In the army the corresponding years are 1972, 1975, 1979. – ie a differential of 10-15years. While the differential is more with the IAS, the variance with the IPS is all the more glaring because both are uniformed services and the grades are "visible" on the shoulders.
First some general aspects. Only the armed forces are a real profession – ie where you rise to the top only by joining at the bottom. We have had professors of economics become Finance Secretaries or even Governors of RBI. We have any number of MBBSs,engineers, MBAs, in the police force though what theirqualifications lend to their jobs is a moot point. You can join at any level in the
civil service, except Cabinet Secretary. A civil servant can move from Animal Husbandry to Civil Aviation to Fertilisers to Steel to yes, unfortunately, even to Defence.. But the army never asks for Brigade Commanders or a Commandant of the Army War College or even Director General Military Intelligence, even from RAW or IB. Army officers can and have moved into organizations like IB and RAW but it is never the other way round. MBBS and Law graduates are only in the Medical or JAG Corps and do nothing beyond their narrow areas. Every Army Chief - in any army - has risen from being a commander of a platoon to company to battalion to brigade to division to corps to army.In fact the
professionalism is so intense that no non-armoured corps officer ever commands an armoured formation – first and possibly only exception in world military history – General K. Sunderji.Perhaps it is this outstanding professionalism that irks the civil services.
Next, one must note the rigidity and steep pyramid of the army's rank structure. In the civil services any post is fungible with any grade based on political expediency and the desires of the service. For example I know of one case where one department downgraded one post in another state and up-graded one in Mumbai just to enable someone continue in Mumbai after promotion!
You can't fool around like this in the armed forces. A very good Brigadier cannot be made a Major-General and continue as brigade commander. There has to be a clear vacancy for a Major General and even then there may be others better than him. Further the top five ranks in the army comprise only 10% of the officer strength. Contrast this with the civil services where entire batches become Joint Secretaries.
Even the meaning of the word "merit" is vastly different in the army and
the civil services. Some years back an officer of the Maharashtra cadre claimed that he should be the Chief Secretary as he was first in the merit list. Which merit list? At the time of entry more than 35 years before! The fact is that this is how merit is decided in the IAS and IPS. Every time a batch gets promoted the inter-se merit is still retained as at the time of entry. In other words if you are first in a batch at the time of entry, then as long as you get promoted, you continue to remain first! This is like someone in the army claiming that he should become chief because he got the Sword of Honour at the IMA. Even a Param Vir Chakra does not count for promotion, assuming that you are
still alive. In the armed forces, merit is a continuous process - each time a batch is promoted the merit list is redrawn according to your performance in all the previous assignments with additional weightage given not only to the last one but also to your suitability for the next one. Thus if you are a Brigade Commander and found fit to become a Major General, you may not get a division because others have been found better to head a division. That effectively puts an end to your promotion to Lt. General.The compensation package must therefore address all the above issues. In each service, anyone must get the same total compensation by the time he reaches
the 'mode rank' of his service. "Mode" is a statistical term “ the value where the maximum number of variables fall.
In the IAS normally everyone reaches Director and in the IPS it is DIG. In the army, given the aforementioned rank and grade rigidities and pyramidical structure, the mode rank cannot exceed Colonel. Thus a Colonel's gross career earnings (not salary scales alone) must be at par with that of a Director. But remember that a Colonel retires at 54, but every babu from peon to Secretary at 60 regardless of performance.Further, it takes 18-20 years to become a Colonel whereas in that time an IAS officer reaches the next higher grade of Joint Secretary, which is considered equal to a Major General.These aspects and others - like postings in non-family stations - must be addressed while fixing the overall pay scales of Colonel and below. Thereafter a Brigadier will be made equal to a Joint
Secretary, a Major-General to an Additional Secretary and a Lt. General to a Secretary. The Army Commanders deserve a new rank -Colonel General - and should be above a Secretary but below Cabinet Secretary. The equalization takes place at the level of Cabinet Secretary and Army Chief.
If this is financially a problem I have another solution. Without increasing the armed forces' scales, reduce the scales of the IAS and IPS till they too have
20% shortage.
Done?
Even India 's corruption index will go down.
If the above is accepted in principle, there is a good case to review the number of posts above Colonel. Senior ranks in the armed forces have become devalued with more and more posts being created.But the same pruning exercise is necessary in the IAS and more so in the IPS, where
Directors General in some states are re-writing police manuals eg one is doing Volume I and another Volume II!
Further the civil services have such facilities as "compulsory wait" ie “ basically a picnic at taxpayers cost. And if you are not promoted or posted where you don't want to go they seem able to take off on leave with much ease. In the army you will be court-martialled. Also find out how many are on study leave. The country cannot afford this.
Let not someone say that the IAS and IPS exams are tougher and hence the quality of the officers better. An exam at the age of 24 has to be tougher than one
at the age of 16. The taxpaying citizen is not interested in your essay/note writing capabilities or whether you know Cleopatra's grandfather.
As a citizen I always see the army being called to hold the pants of the civil services and the police and never the other way round. That's enough proof as to who is really more capable. Also recall the insensitive statements made by the IG Meerut in the Aarushi case and the Home Secretary after the blasts. Further, when the IAS and IPS hopefuls are sleeping, eating and studying, their school mates, who have joined the army, stand vigil on the borders to make it possible for them to do so. Remember that the armed forces can only fight for above the table pay. They can never compete with the civil services and definitely not with the police for the under the table variety.
Finally, there is one supreme national necessity. The political class, not the bureaucracy - which represents the real civil supremacy better become more savvy on matters relating to the armed forces. Till then they are at the mercy of the civil service, who frequently play their own little war games. At ministerial level there are some very specialized departments eg “ Finance, Railways,Security (Home), Foreign and Defence, where
split second decisions are necessary. It is always possible to find netas savvy in finance, foreign relations and railways. Security has been addressed in getting a former IPS officer as NSA at the level of a MoS. Is it time that a professional is also brought into the Defence Ministry as MoS? The sooner the better. In fact this will be better than a CoDS because the armed forces will have someone not constrained by the Army Act or Article 33 of the Constitution.Of course the loudest howls will come from the babus. The netas must realize that a divide and rule policy cannot work where the country's security is concerned. Recall 1962?
Our army, already engaged in activities not core to their functions, including rescuing babies from borewells (!), should not have to engage in civil wars over their pay scales. I only hope our defence minister or anyone who would take a reasonable stand for defence forces ever gets to see this article.
It would definitely affect any person with an iota of integrity
Fwd by Col George Joseph email :jaat52@hotmail.com
In the continuing debate on pay scales for the armed forces, there has to be a serious and transparent effort to ensure that the country is not faced with an unnecessary civil-military confrontation.That effort will have to come from the netas, who are the real and true bosses of the armed forces and not the civil bureaucracy. A solution may lie in what follows. This country requires the best armed forces, the best police and the best civil service. In fact that is what the British ensured.. By best one means that a
person chooses which service he wants as per his desires/capabilities and not based on the vast differential in prospects in the variousservices.
How much differential is there?
Take Maharashtra, one of the most parsimonious with police ranks thus still retaining some merit -
The 1981 IPS batch have become 3-star generals, the 1987 are 2-star and the 1994 1-star.
In the army the corresponding years are 1972, 1975, 1979. – ie a differential of 10-15years. While the differential is more with the IAS, the variance with the IPS is all the more glaring because both are uniformed services and the grades are "visible" on the shoulders.
First some general aspects. Only the armed forces are a real profession – ie where you rise to the top only by joining at the bottom. We have had professors of economics become Finance Secretaries or even Governors of RBI. We have any number of MBBSs,engineers, MBAs, in the police force though what theirqualifications lend to their jobs is a moot point. You can join at any level in the
civil service, except Cabinet Secretary. A civil servant can move from Animal Husbandry to Civil Aviation to Fertilisers to Steel to yes, unfortunately, even to Defence.. But the army never asks for Brigade Commanders or a Commandant of the Army War College or even Director General Military Intelligence, even from RAW or IB. Army officers can and have moved into organizations like IB and RAW but it is never the other way round. MBBS and Law graduates are only in the Medical or JAG Corps and do nothing beyond their narrow areas. Every Army Chief - in any army - has risen from being a commander of a platoon to company to battalion to brigade to division to corps to army.In fact the
professionalism is so intense that no non-armoured corps officer ever commands an armoured formation – first and possibly only exception in world military history – General K. Sunderji.Perhaps it is this outstanding professionalism that irks the civil services.
Next, one must note the rigidity and steep pyramid of the army's rank structure. In the civil services any post is fungible with any grade based on political expediency and the desires of the service. For example I know of one case where one department downgraded one post in another state and up-graded one in Mumbai just to enable someone continue in Mumbai after promotion!
You can't fool around like this in the armed forces. A very good Brigadier cannot be made a Major-General and continue as brigade commander. There has to be a clear vacancy for a Major General and even then there may be others better than him. Further the top five ranks in the army comprise only 10% of the officer strength. Contrast this with the civil services where entire batches become Joint Secretaries.
Even the meaning of the word "merit" is vastly different in the army and
the civil services. Some years back an officer of the Maharashtra cadre claimed that he should be the Chief Secretary as he was first in the merit list. Which merit list? At the time of entry more than 35 years before! The fact is that this is how merit is decided in the IAS and IPS. Every time a batch gets promoted the inter-se merit is still retained as at the time of entry. In other words if you are first in a batch at the time of entry, then as long as you get promoted, you continue to remain first! This is like someone in the army claiming that he should become chief because he got the Sword of Honour at the IMA. Even a Param Vir Chakra does not count for promotion, assuming that you are
still alive. In the armed forces, merit is a continuous process - each time a batch is promoted the merit list is redrawn according to your performance in all the previous assignments with additional weightage given not only to the last one but also to your suitability for the next one. Thus if you are a Brigade Commander and found fit to become a Major General, you may not get a division because others have been found better to head a division. That effectively puts an end to your promotion to Lt. General.The compensation package must therefore address all the above issues. In each service, anyone must get the same total compensation by the time he reaches
the 'mode rank' of his service. "Mode" is a statistical term “ the value where the maximum number of variables fall.
In the IAS normally everyone reaches Director and in the IPS it is DIG. In the army, given the aforementioned rank and grade rigidities and pyramidical structure, the mode rank cannot exceed Colonel. Thus a Colonel's gross career earnings (not salary scales alone) must be at par with that of a Director. But remember that a Colonel retires at 54, but every babu from peon to Secretary at 60 regardless of performance.Further, it takes 18-20 years to become a Colonel whereas in that time an IAS officer reaches the next higher grade of Joint Secretary, which is considered equal to a Major General.These aspects and others - like postings in non-family stations - must be addressed while fixing the overall pay scales of Colonel and below. Thereafter a Brigadier will be made equal to a Joint
Secretary, a Major-General to an Additional Secretary and a Lt. General to a Secretary. The Army Commanders deserve a new rank -Colonel General - and should be above a Secretary but below Cabinet Secretary. The equalization takes place at the level of Cabinet Secretary and Army Chief.
If this is financially a problem I have another solution. Without increasing the armed forces' scales, reduce the scales of the IAS and IPS till they too have
20% shortage.
Done?
Even India 's corruption index will go down.
If the above is accepted in principle, there is a good case to review the number of posts above Colonel. Senior ranks in the armed forces have become devalued with more and more posts being created.But the same pruning exercise is necessary in the IAS and more so in the IPS, where
Directors General in some states are re-writing police manuals eg one is doing Volume I and another Volume II!
Further the civil services have such facilities as "compulsory wait" ie “ basically a picnic at taxpayers cost. And if you are not promoted or posted where you don't want to go they seem able to take off on leave with much ease. In the army you will be court-martialled. Also find out how many are on study leave. The country cannot afford this.
Let not someone say that the IAS and IPS exams are tougher and hence the quality of the officers better. An exam at the age of 24 has to be tougher than one
at the age of 16. The taxpaying citizen is not interested in your essay/note writing capabilities or whether you know Cleopatra's grandfather.
As a citizen I always see the army being called to hold the pants of the civil services and the police and never the other way round. That's enough proof as to who is really more capable. Also recall the insensitive statements made by the IG Meerut in the Aarushi case and the Home Secretary after the blasts. Further, when the IAS and IPS hopefuls are sleeping, eating and studying, their school mates, who have joined the army, stand vigil on the borders to make it possible for them to do so. Remember that the armed forces can only fight for above the table pay. They can never compete with the civil services and definitely not with the police for the under the table variety.
Finally, there is one supreme national necessity. The political class, not the bureaucracy - which represents the real civil supremacy better become more savvy on matters relating to the armed forces. Till then they are at the mercy of the civil service, who frequently play their own little war games. At ministerial level there are some very specialized departments eg “ Finance, Railways,Security (Home), Foreign and Defence, where
split second decisions are necessary. It is always possible to find netas savvy in finance, foreign relations and railways. Security has been addressed in getting a former IPS officer as NSA at the level of a MoS. Is it time that a professional is also brought into the Defence Ministry as MoS? The sooner the better. In fact this will be better than a CoDS because the armed forces will have someone not constrained by the Army Act or Article 33 of the Constitution.Of course the loudest howls will come from the babus. The netas must realize that a divide and rule policy cannot work where the country's security is concerned. Recall 1962?
Our army, already engaged in activities not core to their functions, including rescuing babies from borewells (!), should not have to engage in civil wars over their pay scales. I only hope our defence minister or anyone who would take a reasonable stand for defence forces ever gets to see this article.
It would definitely affect any person with an iota of integrity
Fwd by Col George Joseph email :jaat52@hotmail.com
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