Non Functional Upgrade (NFU)

"Non Functional Upgrade" (NFU) also called "non-functional financial up-gradation" (NFFU) is the name of a scheme implemented by the Congress(I) led United Progressive Alliance(UPA) Government, in 2008, to reward civil servants of 49 'Organized Central Group A Services', also called Central Group A Civil Services, including members of the Indian Police Service(IPS), with automatic time bound pay promotions till the Higher Administrative Grade(HAG). The promotion under NFU scheme are independent of organizational requirements, vacancy, level of responsibility or span of control of a post. NFU scheme ensures that all IPS and civil servants, at a minimum, retire at the HAG pay grade, a grade equated by Government with Lt Generals, Vice Admirals, and Air Marshals of Armed Forces.[1] :para 7.3.18-7.3.25[2][3][4] There is no international precedent for NFU scheme which has had wide-ranging financial, organizational, governance implications.[1] :Chapter 11.22

NFU and the Armed Forces

Sixth Pay Commission (6th CPC)

NFU scheme was implemented by Manmohan Singh, Prime Minister in the United Progressive Alliance (UPA) Government in the wake of Sixth Central Pay Commission.[5]:para 7.46.20[6] :p 39 No reasoning or explanation was given for implementing NFU except that it would "alleviate stagnation in the civil services".[5]:para 7.46.20

The Manmohan Singh government excluded the Armed Forces from the NFU scheme without assigning explanation or reason, despite protest by Armed Forces headquarters.[5] After persistent outcry against the exclusion of armed forces officers from the NFU including in the form of a detailed written petition by the Chiefs of Staff Committee (COSC) to A. K. Antony, Defence Minister,[3] Prime minister Manmohan Singh, appointed a 'Committee of Secretaries'.[4][7] But the committee, predictably, evades the issue.[8]

Seventh Pay Commission (7CPC)

Chairperson of 7CPC, recommends that on Non - Functional Upgradation (NFU), should be allowed to continue for Organised Group ‘A’ Services, because it has 'existed for the last 10 years'. In response to the clamour for similar scheme by the armed Forces, he recommends that a watered down NFU with long residencies "be extended to the officers of the Defence forces and CAPFs" to "ameliorate the difficulties faced by the officers owing to stagnation at various levels".[1]:6.2.36 and Ch 11.22

Vivek Rae, IAS, and Dr. Rathin Roy, the other two Members of the commission, disagree with the Chairperson. In their dissent note, while criticizing the NFU scheme, they conclude that "exclusion of Defence forces from NFU" by the UPA government was "unfair". After examining the NFU scheme implemented by the UPA Government they conclude that the Indian bureaucracy and Police has set a world record "for career progression in government bureaucracies", by recklessly de-linking "promotions from career progression". They recommend that NFU be withdrawn from the Organised Group ‘A’ Services, noting that they are far less deserving than the officers of the Defence Forces. They do not favour extending NFU to the Armed Forces.[1]:6.2.36 and Ch 11.22Considering the wide ramifications of the NFU scheme, and the backlash, they recommended that NFU scheme be abolished.[1] :para 6.2.35–36 and Chapter 11.22

MOD Opposes NFU for Armed Forces.

Manohar Parrikar, Defence Minister on 24 December 2014 authorizes MOD to inform Chairman of the 7CPC that MOD does not favour NFU for the Armed Forces. The justification for not recommending NFU for the armed forces is that the Cabinet Secretary, in 2011, had not made "any recommendations on the issue". The MOD letter recalling the points made in the cabinet secretary's report notes that: "the service conditions of Defence Forces are quite different from those of civilian employees. Benefits in the form of Military Service Pay and various allowances are also available to the Defence Forces officers which are not available to civilian officers. It is, therefore, not logical to compare the earnings of two services. Further, Defence Forces officers are covered by a separate time-bound promotion scheme up to the level of Colonel. The scheme of non-functional upgradation is applicable only to organised Group ‘A’ Services and was extended to IPS/IFS. The requirements related to command and control, the norms for recruitment, promotion and rank structure of the Defence Forces are not identical to those of Group ‘A’ cadres. The average age of entry of Commissioned Officers is lower than those joining Group ‘A’ Services. In view of the above, the Committee did not make any recommendations on this issue." The MOD reply not recommending NFU for the Armed forces, notes that though "the Pranab Mukherjee Committee Report' did not consider "this particular issue" of NFU it stated "that for functional purposes, salary cannot be the basis to determine status". The MOD, does in the end offer a comment of its own, which is "However, on account of the steep hierarchical pyramid in the armed forces, a large number of officers stagnate and retire at the level of Lt Colonel. 7th CPC may, therefore, devise a way to address this issue suitably. One way to achieve this can be, to grant NFU to those personnel who have been stagnating at the same level (say for 3-4 years) after the promotion of their immediate juniors".

The MOD, in justification of its stand reiterates that "command and control...promotion and rank structure of the Defence Forces are not identical" with police forces, while knowing that police officers wear army badges of rank, make equivalences with military ranks, and even commands armed forces in the NSG and other organizations.[8]

Impact

NFU has wide-ranging impact on the senior hierarchy of the armed forces, its colonels, brigadiers and generals, their pay and pension structure, and the command and control frame work. The exclusion from NFU roils the officer corps of the Armed Forces. It becomes another cause of grievance and distrust of the bureaucracy, and fuels One Rank, One Pension (OROP) protest. And like OROP, it becomes 'honor and izzat' issue.[9] Additionally, implementation of NFU and unexplained exclusion of Armed Forces officers corps from the NFU has had a corrosive impact on the Armed Forces morale, status, cohesion, and national security, according to former senior military commanders.[1] :para 7.3.25[3][10]

BJP and NFU for the Armed Forces

The Narendra Modi led Bharatiya Janata Party Government which replaced UPA Government, in May 2014, from which much was expected by the Armed Forces and Ex servicemen,[11] once in power, much like the Congress Government, let the NFU issue fester, instead of addressing it.Manohar Parrikar, soon after becoming the Defence Minister, opposes NFU for the armed Forces despite it being flagged by the Chief of staff in the Joint memorandum.[10][12]

Time Line

March 2008

Sixth Central Pay Commission submits report. It recommends NFU for Group 'A' Central services, to "alleviate stagnation in the civil services". No explanation or reasons are given for excluding the Armed Forces from the scheme.[5]

July 2008

Chiefs of Staff Committee (COSC), consisting of General Deepak Kapoor (30 September 2007 -31 March 2010), Air Chief Marshal Fali Homi Major (31 March 2007-31 March 2009), and Admiral Sureesh Mehta (31 October 2006 -31 August 2009), send a detailed note to A. K. Antony, Defence Minister, flagging the adverse impact of NFU on the Armed Forces. The COSC urge that Armed Forces Officers be treated at par with All India Services. The minister on the advice of Vijay Singh, Defence Secretary, ignores COSC submission.[3]

29 August 2008

NFU is implemented after an endorsed by an ‘Empowered Committee of Secretaries" headed by K.M. Chandrasekhar, IAS, the Cabinet Secretary. Decision reads: "Whenever any IAS officer of a particular batch is posted in the Centre to a particular grade carrying a specific grade pay in pay bands PB-3 or PB-4, grant of higher pay scale on non- functional basis to the officers belonging to batches of organised Group A services that are senior by two years or more should be given by the Government." "This will also be applicable to the Indian Police Service and the Indian Forest Service in their respective State cadres for which the relevant cadre controlling authorities will issue the orders". No reason or explanation is given for implementing the scheme beyond that it will alleviate stagnation in the civil services.[6]

IPS Rules incorporate NFU scheme, the relevant rule reads: "whenever any Indian Administrative Service officer...in pay band 3 or pay band 4, is promoted, members of the Indian Police Service and other All India Services (AIS), senior to such officers' become automatically eligible to be "appointed to the same grade on non-functional basis from the date of posting of the Indian Administrative Service officer in that particular grade".[13]:p 156 note 3, and Annexure -I, p 319

Government creates a new pay grade designated as HAG+. It is 'carved out of PB-4', with "A new pay scale of ₹75500 - ( annual increment @ 3%)-80000 ". The new grade is accompanied by large scale up-gradation of posts in the police at the HAG + and apex level. HAG + and Apex grades become proforma time scale promotions. Almost all police officers and group A Officers become eligible to retire with pay and pension at Apex scale, with OROP benefits.[2]

The new rank HAG+ supersedes all Lt. General except for a small fraction that are Army Commanders. HAG+ renders Lt general and their equivalents in the air force and navy, inferior in status, and pay to scores of Police officers in HAG+ and apex scales. Increase in hundreds of new posts, and exclusion of Lt Generals from new HAG+ grade effectively degrades the status of Lt General.[6] :p 39

27 December 2008

UPA II Government, in response to sustained outcry by the Armed Forces, and Armed Forces veterans, on the anomalies in the Government decision, issues instructions that

  1. "In future, pay revision of the armed forces should be de-linked from that of civilians and separate board or commission should be set up for pay revision of the armed forces."
  2. Formation of a High Powered Committee to 'resolve issues relating to command and control functions/status of armed forces vis a vis paramilitary and civilians.' [Despite the announcement no follow action was taken] [14]

2009-2014

21 May 2009

UPA Government issues orders to implement non-functional financial up-gradation for all Organized Group-A Civil Services. Armed Forces are excluded from the order. Armed Forces remonstrations have little impact.[15]

7 July 2009

Seven member Committee, ordered to examine "One rank One pension and Related Issues" by Prime Minister Manmohan Singh, on the advice of AK Antony, Defence Minister, submits 21 page report. The committee, from which Armed Forces representation was excluded, includes, K. M. Chandrasekhar, Cabinet Secretary, Chairman; and six members: Vijay Singh, Defence Secretary, Ministry of Defence (MOD); Neelam Nath, Secretary Ex Servicemen Welfare, Ministry of Defence; (MOD), Madhukar Gupta, Secretary Home, Ministry of Home Affairs; Rajni Razdan, Secretary Pension and PW; Rahul Sarin, Secretary, Department of Personnel and Training (DOPT), PMO; and Sushma Nath, Secretary Expenditure, Ministry of Finance. The Report opposes OROP for the Armed Forces, and does not touch on the 'related issue' of NFU. The committee report evades NFU, but discusses the fraught issue of the civil equivalence, pensions and pay of Lt General, and their equivalents in Air Force and Navy, in the context of NFU, and up gradation of scores of police posts to HAG+ and Apex grades. The report in its consideration fails to acknowledge that HAG grade has, as result of Government decision, been rendered a time scale grade to which 100 percent of the officers of the 49 Civil Services are promoted as matter of right, and which does not bare comparison with Lt Generals grade, a highly selective rank to which less that one percent of the armed forces officers are promoted. The Report recommends that a new pay scale be created for Lt generals provided all HAG time scale officers are also elevated to the new scale.[7] : para 6.9, and 9(c)

19 November 2009

Against the background of the controversy on rewarding Group A Service with NFU, the Department of Personnel & Training (DoPT), under the Prime ministers Office (PMO), issues an Office memorandum(OM), titled "Attributes of Group-A Central Services Clarification on'.[16]

July 15, 2010

AK Antony, Defence Minister (2006–2014), rejects note vetted by General Vijay Kumar Singh, Chief of army Staff (31 March 2010 - 31 May 2012), Admiral Nirmal Kumar Verma, Chief of Naval Staff(31 August 2009 - 31 August 2012), and Air Chief Marshal Pradeep Vasant Naik, Chief of Air Staff (31 March 2009-31 July 2011), on NFU for Defence Officers. The reply dismissing the Armed Forces note on NFU for Defence Officers is signed by a Joint Secretary, a mid-level officer, in the Department of Defence, DOD, headed by Pradeep Kumar, Defence secretary (1 August 2009 -14 July 2011).[17]

The MOD instead of classifying Lt general as HAG+, as a concession, creates 'Non Function pay grades' like for the police, at the Lt general level, to which some Lt generals and their equivalents are 'promoted'.

12 March 2010

Department of Personnel & Training (DoPT), under the Prime Minister's Office (PMO), issues an Office memorandum(OM) on residency, i.e., minimum service requirement for various ranks in the higher Civil Service. Organized Group 'A’ Services: SAG 17 years, HAG scale 20 years, HAG+ 21 years, Apex scale 22 years. CRPF (CAPF) IG scale 24 years. IAS/ IPS/( Indian Forest Service)IFoS: SAG scale 16 years for IAS, 18 years for IPS, and IfoS.[1] :para 7.3.20

17 August 2012

Committee of Secretaries, appointed in 2011, by Manmohan Singh, Prime Minister, to examine the issues raised by the defence services, including Non Functional Upgradation (NFU), submits report. The report does not recommend NFU for officers of the Defence Forces on the basis of rationale provided by Shashi Kant Sharma, Defence secretary, and head of DOD, which was endorsed by AK Antony, Defence Minister. The MOD rationale for opposing NFU to the armed forces are

  1. Service conditions of the defence services are different than civilian officers; and
  2. The Defence forces are being given many benefits including Military Service Pay (MSP). The financial implications for the grant of NFU to the Armed Forces is estimated by the ministry as ₹69 crores.[4]

13 September 2013

India Today, Delhi based news magazine, cites a MOD letter titled, 'Common VII Central Pay Commission' leaked to it by a Joint Secretary in the MOD. The 'letter' is purportedly written by Chief NAK Browne, the Chairman of the Chief of Staff Committee (COSC), to AK Antony, Defence Minister. According to the 'letter' the Government is in favour of a separate pay commission for the Armed Forces, but the armed forces would rather be part of the 7CPC instead of having a separate pay commission. Air Chief Marshal NAK Browne, according to the 'letter' has:

  1. Opposed formation of separate pay commission for the armed Forces, because "a separate pay commission may not necessarily benefit the services as anomalies are invariably bound to arise in both cases";
  2. The main cause for dissatisfaction the armed Forces is not having separate pay commission but the "non-resolution of anomalies or ex-parte resolution of anomalies" [14]

24 December 2014

Manohar Parrikar, Defence Minister and R.K. Mathur, Defence secretary (25.05.2013 -24.05.2015), informs Chairman of the 7CPC, that MOD does not favour NFU for the Armed Forces.[8]

2015

11 July 2015

Five retired Lieutenant Generals, four Major Generals and one Air Marshall of the Indian Air Force, joins the protest at Jantar Mantar, in New Delhi. Amongst the Lieutenant General is Lt General Rajinder Singh Sujlana AVSM, VSM, former X Corps Commander and Colonel Commandant of the Sikh Regiment.[18]

13 August 2015

General S F Rodrigues, former COAS, and Admirals L Ramdas, Arun Prakash and Sureesh Mehta, former Chiefs of Naval Staff, write an open letter to President Pranab Mukherjee, Supreme Commander of the Armed Forces. The letter says, "Recent developments....have not only triggered a process of politicization of the Indian military, but also served to inflict grave damage on its morale and self-esteem"; and that these developments pose grave "implication for national security".[12]

3 September 2015

Major General Satbir Singh, Vice Chairman of IESM, responding to question on financial implication of One Rank One Pension (OROP) following his meeting with Nripendra Misra, Principal Secretary to PM, asks why similar questions were not raised following the implementation of NFU in 2008.[19]

13 October 2015

Principal Bench of the Armed Forces Tribunal (AFT) in New Delhi issues notice to the Ministry of Defence(MOD) and Ministry of Finance on a petition filed by Col Mukul Dev, a serving Colonel of the Army's Judge Advocate General's Branch, demanding grant of Non-Functional Upgrade (NFU) to Armed Forces Officers on the lines granted to IAS officers and other Group ‘A’ services. The colonel and his Counsel argue that the Governments failure to extend NFU to the armed Forces has lowered the status and adversely affected the morale of officers of the armed forces; and that:

  1. The stagnation in the armed forces is more acute than the civil services;
  2. Denial of NFU to the Armed Forces is violation of Article 14 and 16 of the Constitution of India;
  3. The aim of NFU is not to equate the monetary benefits or earnings enjoyed by a particular service but is granted with the aim to ameliorate stagnation;
  4. Well established parity between armed forces and the "All India Services/ Group ‘A’ services and IPS in particular has been disturbed', and
  5. Armed forces officers cadre meets all the attributes attached to the Group ‘A’ organised service; and [6] the comparison of Military Service Pay (MSP) and NFU is a "gross mis-concept", as MSP to compensate for difficulties of military service, and NFU is to "alleviate the acute stagnation" which is far worse than in the armed forces than in the Police other civil services, such as the Indian Legal Service and Indian Trade Service, Indian Statistical service, Indian Economic service and Central Information service, which are eligible for NFU.[20][21]

19 November 2015

A K Mathur, the Chairperson of 7CPC, recommends that On Non - Functional Upgradation (NFU), continue for Organised Group ‘A’ Services, because it has 'existed for the last 10 years'. He recommends a watered down NFU with long residencies "be extended to the officers of the Defence forces and CAPFs" .[1]:6.2.36 and Ch 11.22 Two members of the commission disagree with the Chairman. They recommend that NFU be abolished because, among other reasons, it has set a world record in de-linking "promotions from career progression".[1]:para 6.2.35–36 and Chapter 11.22

See also

References

  1. 1 2 3 4 5 6 7 8 9 "Report of Seventh Central Pay Commission" (Report: p 899). 2. New Delhi: Government of India. 19 November 2015. Retrieved 19 November 2015.
  2. 1 2 Shukla, Avay (17 August 2015). "The bitter truth about OROP". HillPost. Retrieved 28 August 2015. Avay Shukla, Indian Administrative Service, HP Cadre, 1975 batch , retired December 2010
  3. 1 2 3 4 O’ Leary, Alan, Rear Admiral (11 April 2012). "OROP and non Functional Pay Promotions". India of My Dreams. Retrieved 30 November 2015. Former Chairman PARC and Chairman Naval pay cell, 6th CPC
  4. 1 2 3 Navdeep Singh, Major, (retd) (16 September 2013). "Rank Pay Case : Opinion rendered by the Attorney General supporting some points in favour of the Defence Services". Indian Military: Service benefits and Issues:. Retrieved 30 November 2015.
  5. 1 2 3 4 Sixth Central Pay Commission (March 2008). "Report of the Sixth Central Pay Commission" (PDF). Ministry of Finance, Government of India. Ministry of Finance. p. 9. Retrieved 26 May 2015.
  6. 1 2 3 "Gazette of India: EXTRAORDINARY:Part I-Sec. I" (PDF). New Delhi: MINISTRY OF FINANCE (Department of Expenditure). 29 August 2008. Retrieved 14 July 2015.
  7. ↑ Singh, Maj Gen,(Retd) SM Vice Chairman Indian ESM Movement, Satbir (3 Nov 2011). "PRESS RELEASE "DEFENCE VETERANS AGAINST INJUSTICE". reportmysignal. reportmysignal.blogspot.com. Retrieved 5 June 2015.
  8. 1 2 Syed Ata, Hasnain, Lt General,(Retd) (5 October 2015). "NFU Indian Army: Big Ticket Vacancies At The Top". 2. Retrieved 30 November 2015. former Corps Commander XV Corps, currently associated with Vivekananda International Foundation
  9. ↑ Modi, Narendra (15 September 2013). "Narendra Modi speech at Ex-Servicemen Rally in Rewari, Haryana: 15 September 2013". U Tube: Bharatiya Janata Party. Retrieved 25 June 2015.
  10. 1 2 General Rodrigues, S F; et al. (14 August 2015). "Former chiefs write open letter to President, say 'denial of OROP the last straw". Financial Express. Delhi. Retrieved 21 August 2015.
  11. ↑ Department of Personnel & Training (DOPT). "INDIAN POLICE SERVICE (PAY) RULES, 2007" (PDF). Government Of India Ministry of Personnel, Public Grievances & ... Department of Personnel & Training (DOPT). Retrieved 26 May 2015.
  12. 1 2 Purohit, Jugal R (26 September 2013). "Armed forces oppose government's separate pay commission Air Chief Marshal NAK Browne has written to Defence Minister AK Antony on behalf of Joint Chiefs of Staffs opposing the separate pay commission.". Retrieved 30 November 2015. source unnamed MOD Joint secretary
  13. ↑ Navdeep Singh, Major, (retd) (25 May 2009). "Execution of 'non-functional financial upgradation' with effect from 2006 ordered for all Group-A organised services". Indian Military: Service benefits and Issues:. Retrieved 30 November 2015.
  14. ↑ Department of Personnel & Training (DOPT) (20 November 2009). "Attributes of Group-A Central Services Clarification on" (PDF). Retrieved 16 December 2015.
  15. ↑ Shukla, Ajai (9 November 2015). "Five simple measures to improve defence ministry's performance" (2). N Delhi: 2. 2. Retrieved 24 November 2015.
  16. ↑ "'Born to battle' batch joins OROP protest". Tribune. Tribune News service. 11 July 2015. Retrieved 13 July 2015.
  17. ↑ "One Rank One Pension: Has government overruled veterans?". N Delhi: NDTV. 3 September 2015. Panelist include Maj Gen Satbir Singh, General Shankar Roy Choudhry, and Shekar Gupta
  18. ↑ Chhina, Man Aman Singh (13 October 2015). "Armed Forces Tribunal issues notice to MoD, MoF on petition seeking pay parity with civil services". Chandigarh. Retrieved 24 November 2015.
  19. ↑ Chhina, Man Aman Singh (15 October 2015). "Colonel seeks pay parity with civil servants, AFT issues notice to MoD, finance ministry". Chandigarh: Indian Express. Retrieved 24 November 2015.
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