OROP: Pension promise in peril?

[pmaitra]

Do you actually know anything about economics ?

Or you have no idea about demand and supply graph.

Read what I have written .

Inflation is due to, increase in money supply in economics , without increase in more production capacity , thus same amount of production (Ex, being more money in hand of MGNREGA workers , which opted for protein rich food , which was not able to keep up with the demand from same workers). So, more money in hands of people who would compete for same amount of products , so higher cost thus inflation.

But, if we increase production , or utilize existing extra production capacity (Ex. In case of Suzuki production plant, where existing production capacity is not being fully utilized due to low consumption demand), then the above mismatch is avoided and more consumption leading to more profit , which leads to more investment and thus increasing capital in economy.

BTW, do you know their are many reasons for inflation , and monetary mismatch being only one of them.

I think he was referring to giving higher pension to retired militarymen which would improve the economy. It was not about increasing production. Increased money supply might increase demand, and increased demand might actually make the market increase the supply, so from that angle, you have a valid point.

 

[Yumdoot]

This is such a pathetic representation of the valor and bravery and courage shown by the warrior .
I consider this author to be worse than a worm.
To use the bravery and sacrifice of this honest soldier to push his agenda and make a case out of hia death in such a smug and cavalier manner is worse than even a porki.
Is this person writing a script for a Bollywood movie . even before the ashes of this yoddha have been scattered to use his death to push ones own agenda instead of paying tribute to him.
Me and my friends have already started a fund to be contributed for his family
Does this piece of shit think that all Indians are like him to use the death of a veer to opportunistically push his case.
So what about mukund varadharajan has he been forgotten already???
Or did he die too early to be used for this authors agenda pushing. Does he even know how much the aam public contributed to the war effort during the Kargil war??
Even rikshaw pullers and auto driver gave a percentage of thier meagre daily earnings.
Sir this is not a tear jerker Bollywood movie.this realy life where even a civilian with small kids and family can die at any time . India is not safe for anyone.
Please give the dead the honor they deserve who ever it may be.

A lot of urban Hindus are converts without even knowing that they are. Its just the way they live. No point wasting breath on them.

Martyr tags, RIP Azan, MSM Hyperventilation, Irrelevant quotes like Mark Anthony etc., Irrelevant conclusions like Snubbing a Minister or even the Sab Mile Hue Hain, Collective bathing in the reflected glory of an individuals natural instincts.

Lets just hope all this helps them to remain stable and not become a Naxal.

Meantime conserve your strength till you can plant a firm and fatal kick on them (ie. if they do turn Naxals ).

 

[Abhijat]

@pmaitra , Sir, that's why I specifically mentioned Suzuki , which according to post made by @Simple_Guy , have their view on 7th pay commission and their target being government employees which are in Middle class and thus their purchasing basket being , of more of manufacturing goods , rather than primary goods like food. So, underutilized capacity of these manufacturing company's can be utilized by increasing purchasing power via 7th pay commission.

Here is the quote :

Investors expect Maruti Suzuki to get a boost from the Seventh Pay Commission's recommendations later this year that will lead to salaries of government employees rising. The Pay Commission is expected to submit its report by October and this is likely to be implemented from July 2016, likely adding to an expected double-digit growth in passenger car sales in FY17. Maruti Suzuki is expected to be the main beneficiary, analysts said. The last Pay Commission report had resulted in car sales rising 18 per cent annually between FY09 and FY11.

"The Sixth Pay Commission, which was implemented in August 2008, resulted in almost 10 times increase in Maruti's sales to government employees from FY08 to FY12," Jatin Chawla and Akshay Saxena, research analysts at Credit Suisse, wrote in a July 15 report.

"We have sold almost 200,000 vehicles to government employees in FY15," said Randhir Singh Kalsi, executive director, sales, Maruti Suzuki. "We certainly believe we can get more incremental volumes after implementation of the Seventh Pay Commission."

@Mad Indian , sorry brother for harsh language I have written in my previous post. I think it was due to my lack of not clearly quoting the post I was mentioning and thus your response being related to thread itself. Hopes you might overlook the same.

 

[Mad Indian]

Do you actually know anything about economics ?

Or you have no idea about demand and supply graph.

Read what I have written .

Inflation is due to, increase in money supply in economics , without increase in more production capacity , thus same amount of production (Ex, being more money in hand of MGNREGA workers , which opted for protein rich food , which was not able to keep up with the demand from same workers). So, more money in hands of people who would compete for same amount of products , so higher cost thus inflation.

But, if we increase production , or utilize existing extra production capacity (Ex. In case of Suzuki production plant, where existing production capacity is not being fully utilized due to low consumption demand), then the above mismatch is avoided and more consumption leading to more profit , which leads to more investment and thus increasing capital in economy.

BTW, do you know their are many reasons for inflation , and monetary mismatch being only one of them.

Again, why why din the supply demand mismatch occur in MNREGA? Surely you dont think Indian agriculture is functioning at optimum production efficiency? Indian agri yields are only 1/3-1/4th of the western yields per hectare. So by your logic, infusion of money into the MNREGA should have made more money available to the farmers for improving their production efficiency and should have resulted in higher yields and economy? But instead it resulted in inflation. Why? Because your logic is BS


Regarding Suzuki, again dude, suzuki will make money because some people might buy from them. But, the money given into the veterans will end in other sectors too pushing the prises up and so the inflation will be felt by every one. THats what I said -- Maruti will make money, but the money they make will have to be bourne by common men through inflation.

Also, no matter how many fancy terms you come up with, 4+4=8 only. Printing more money and showering more wages wont cause anything more than increase inflation. It does not do shit to improve the economy

 

[Mad Indian]

@pmaitra , Sir, that's why I specifically mentioned Suzuki , which according to post made by @Simple_Guy , have their view on 7th pay commission and their target being government employees which are in Middle class and thus their purchasing basket being , of more of manufacturing goods , rather than primary goods like food. So, underutilized capacity of these manufacturing company's can be utilized by increasing purchasing power via 7th pay commission.

Here is the quote :



@Mad Indian , sorry brother for harsh language I have written in my previous post. I think it was due to my lack of not clearly quoting the post I was mentioning and thus your response being related to thread itself. Hopes you might overlook the same.

What harsh language? Whatever

Dude, its stupid that you people think that purchase power can be increased by infusing money into the economy. It does not. Economy increase by increased productivity, not by increasing money circulation

@Sakal Gharelu Ustad Dude, how can infusion of money into the economy by increasing wages result in economic growth? Anything that might happen due to temporary excess will result be lost as soon as people come to realise the increased money supply just means inflation right? Please help me out here.

 

[Mad Indian]

again people, if increased money supply increases demand, why not increase the money supply to infinite amount and see economy become super powered in a single day?

 

[Sakal Gharelu Ustad]

What harsh language? Whatever

Dude, its stupid that you people think that purchase power can be increased by infusing money into the economy. It does not. Economy increase by increased productivity, not by increasing money circulation

@Sakal Gharelu Ustad Dude, how can infusion of money into the economy by increasing wages result in economic growth? Anything that might happen due to temporary excess will result be lost as soon as people come to realise the increased money supply just means inflation right? Please help me out here.

Artificial money supply can boost demand in case of a downturn when people don't want to spend anything. If people are perfectly rational, then it would lead to inflation right away. In case, they are not perfectly forward looking, then it might boost demand in short run and help in overcoming recession. In the long-run, it does not have any impact.

 

[Abhijat]

infusion of money into the MNREGA should have made more money available to the farmers for improving their production efficiency and should have resulted in higher yields and economy?

MGNREGA primary beneficiary were not the farmers but agricultural laborers , who by the virtue of increased purchasing power , get to demand higher protein rich products , which were initially only being part of food basket of middle class.

And on question of why farmers were not able to profit much from same, reason being APMC act , lack of cold storage and related infrastructure.

APMC act , restricts farmers from direct selling their products to consumers , so they have to sell their products through Mandis, where Dalals profited at cost of farmers. Thus, farmers themselves couldn't put up any extra money in increasing production substantially .

suzuki will make money because some people might buy from them. But, the money given into the veterans will end in other sectors too pushing the prises up and so the inflation will be felt by every one.

Read again , I am not talking about army veterans and neither are Suzuki . They are targeting civil government employees , who are due to get 7th pay commission , and thus can help in consumption spree of their products.

again people, if increased money supply increases demand, why not increase the money supply to infinite amount and see economy become super powered in a single day?

Where did you get this notion from above discussion ?

Both , money supply and production capacity needed to be increased side-by-side, so that velocity of money i.e speed of flow of money from on hand to another , can be increased thus putting economy in consumption spree.

 

[jackprince]

again people, if increased money supply increases demand, why not increase the money supply to infinite amount and see economy become super powered in a single day?

I think you are going to the point inversely. It is not increase money supply in the economy itself, but it will increase money supply in consumer demand sector diverting funds, for a limited period of time, from development sector. The supplier of the consumer goods will benefit which in turn will create more jobs in those sectors, and bring in more investment. Printing money will make influx of more new money into the economy which will not be substantiated by the economic condition and will cause inflation.

Because of OROP and upcoming 7CPC, the development sectors will be hurt for a while as you will not see much of new govt. projects sanction in next budget, however the economy will not be worse off except may be housing sectors which will see a rise of prices. Though I have the impression that housing sectors are suffering due to lack of demand.

This my understanding.

 

[Mad Indian]

MGNREGA primary beneficiary were not the farmers but agricultural laborers , who by the virtue of increased purchasing power , get to demand higher protein rich products , which were initially only being part of food basket of middle class.

And on question of why farmers were not able to profit much from same, reason being APMC act , lack of cold storage and related infrastructure.

APMC act , restricts farmers from direct selling their products to consumers , so they have to sell their products through Mandis, where Dalals profited at cost of farmers. Thus, farmers themselves couldn't put up any extra money in increasing production substantially

Again dude, stop beating around the bush. I asked a simple question. You say purchasing power of the laborers got increased by the MNREGA. That would mean more demands to be met by the farmers. So why dint Farmers increase their yields. Dont tell me their yields are saturated as is.

And please dont bring this middle men crap. I am not talking about why profits dint reach farmers, I am asking why there was no net increase in productivity/yield. Even if middle men take lot of profits, it still is only rational for farmers to increase the productivity to increase their share of the income from the increased demands. Why dint it happen?

Read again , I am not talking about army veterans and neither are Suzuki . They are targeting civil government employees , who are due to get 7th pay commission , and thus can help in consumption spree of their products.

Whatever. My point still stands and you have not actually countered it. Whatver money which will reach the civil servants due to wage increase will result in proportional inflation which has to be bourne by the common man. In other words, when suzuki is making money, ordinary people will be paying for it through inflation

Where did you get this notion from above discussion ?

Both , money supply and production capacity needed to be increased side-by-side, so that velocity of money i.e speed of flow of money from on hand to another , can be increased thus putting economy in consumption spree.

Again dude, you were the one who claimed that infusion of money into the economy will help the economy due to consumption.

Anyway, @Sakal Gharelu Ustad already explained about this issue.

What you are suggesting is not applicable to India. It is only applicable to countries with stagflation and recession, and that too only as a temperory measure.

 

[Mad Indian]

I think you are going to the point inversely. It is not increase money supply in the economy itself, but it will increase money supply in consumer demand sector diverting funds, for a limited period of time, from development sector. The supplier of the consumer goods will benefit which in turn will create more jobs in those sectors, and bring in more investment. Printing money will make influx of more new money into the economy which will not be substantiated by the economic condition and will cause inflation.

Because of OROP and upcoming 7CPC, the development sectors will be hurt for a while as you will not see much of new govt. projects sanction in next budget, however the economy will not be worse off except may be housing sectors which will see a rise of prices. Though I have the impression that housing sectors are suffering due to lack of demand.

This my understanding.

In other words, you will be diverting the usual economic growth and activity from one group of people to the other. That is, there will be no net gain in the economy. In fact, if you take into account the efficiency loss due to the govt induced transfer of economic activity, there will actually be a net economic loss.(mostly due to inflation)

This is the reason why money infusion is a bad idea.

Again, why not print more money and infuse it to the govt employees? You guys claim that supplying more wages will up the demand and hence will up the production by giving more incentives for the investments. So lets print 1 crore for each govt employee and give it to them. They will have huge money to spend on and investments will rise up several magnitudes and India will be developed in a year? Its such a simple question to answer. @Abhijat

 

[jackprince]

In other words, you will be diverting the usual economic growth and activity from one group of people to the other. That is, there will be no net gain in the economy. In fact, if you take into account the efficiency loss due to the govt induced transfer of economic activity, there will actually be a net economic loss.(mostly due to inflation)

This is the reason why money infusion is a bad idea.

Again, why not print more money and infuse it to the govt employees? You guys claim that supplying more wages will up the demand and hence will up the production by giving more incentives for the investments. So lets print 1 crore for each govt employee and give it to them. They will have huge money to spend on and investments will rise up several magnitudes and India will be developed in a year? Its such a simple question to answer. @Abhijat

Nobody is claiming that it will improve the economy significantly, but that it will help certain some sectors of economy significantly. Also, printing more money which the economy cannot substantiate, is the simple example of supply and demand which answers that. Printing more money will increase flow of money unsubstantiated and devalue Rupee in the process. It is simple logic, but in your stubborn way you refuse to concede to that point.

Further, the Govt. employees are men and women who deserve a good living too. They deserve periodic up-gradation of pay like everyone. Why deny them the economical benefits enjoyed by the private sectors? How can you expect a person to dedicate in his job when he is not paid well enough? When at lowest levels, the Govt. employees do make more than do make significantly more money than their private sectors counterparts - the career growth both monetarily and promotion-wise gets significantly stunted as it goes upwards. Also, the wage increase by Pay Commissions are not arbitrary but actually based on various parameters which adjust the wage/salary of govt. employees based on the economy of the nation.

Diverting money to the Govt. employee and armed forces doesn't mean that citizens are neglected. Govt. employees are citizens too. Also, the backlog normally doesn't continue for more than one financial year, and if a nation's economy cannot take care of its own employees which help function it, the economy is not worth having.

 

[Mad Indian]

Nobody is claiming that it will improve the economy significantly, but that it will help certain some sectors of economy significantly. Also, printing more money which the economy cannot substantiate, is the simple example of supply and demand which answers that. Printing more money will increase flow of money unsubstantiated and devalue Rupee in the process. It is simple logic, but in your stubborn way you refuse to concede to that point.

Nope . I already said Maruti will make money at the expense of te inflation suffered by common man. Or in other words, there is no net economic activity growth and only transfer of economic activity from one place to another

Nobody said it helps the economy? Da hell, the very first post I quoted in this matter is on how OROP will help the economy.

Further, the Govt. employees are men and women who deserve a good living too. They deserve periodic up-gradation of pay like everyone. Why deny them the economical benefits enjoyed by the private sectors? How can you expect a person to dedicate in his job when he is not paid well enough? When at lowest levels, the Govt. employees do make more than do make significantly more money than their private sectors counterparts - the career growth both monetarily and promotion-wise gets significantly stunted as it goes upwards. Also, the wage increase by Pay Commissions are not arbitrary but actually based on various parameters which adjust the wage/salary of govt. employees based on the economy of the nation.

Strawman argument. I never said anything about whether govt emplyees should get a pay hike or not. I am talking about why the claims that such pay hike will boost the economy is utter crap to further the agenda of the people who are peddling that utter crap

Diverting money to the Govt. employee and armed forces doesn't mean that citizens are neglected. Govt. employees are citizens too. Also, the backlog normally doesn't continue for more than one financial year, and if a nation's economy cannot take care of its own employees which help function it, the economy is not worth having.

Exactly. The economic activity is diverted. Its not increased. Thats the point.

 

[Simple_Guy]

Impact of pay commissions

The sixth Pay Commission partly offset the after-effects of the 2008 Lehman crisis on India because of the 35% increase recommended. The implementation of the hike boosted two-wheeler and car sales and increased demand in the cement sector, according to global brokerage firm Bank of America Merrill Lynch.

"The arrears resulted in robust demand for consumer discretionary products that resulted in sustained stock performance over 3-5 years," Jai Shankar, chief India economist of Religare.

Due to this co-relation between Pay Commissions and economic growth, many analysts are eagerly awaiting the 7th Pay Commission report.

While Bank of America estimates the salary raise to be at 15%, Religare puts it at 28 to 30%. Credit Suisse expects a salary hike of 40%. Economists see the 7th Pay Commission as improving the economic activity in the country by increasing consumption.

"The most important factor is economic activity itself which is gaining pace and, together with greater employment generation and policy reform, the 7th Pay Commission salary hike may help India enter a larger virtuous cycle," said Religare.

"A 15 per cent salary increase would push up the central government's salary bill by Rs 25,000 crore (or $4 billion), which is 0.2 per cent of India's GDP. This will help in a consumption-driven recovery in the domestic economy," said Indranil Sen Gupta of Bank of America Merrill Lynch.

 

[DingDong]

I shall be very grateful , if you would be kind enough to justifiably support OROP by giving a missed call to 7304400500 to help the Ex-servicemen in fully impacting the Unaccountable , Inept n Self Seeking Govt / Bureaucracy to see the reality in the National Interest n take appropriate action to ensure the desired morale of the Forces .
Thanks/ regards
R Adm H C Malhotra

No "national interest" is served by spending more of tax payers' hard-earned money on pension and perks of the ex-servicemen. Tell your colleagues to stop being so greedy that we start suspecting their intentions.

 

[hit&run]

http://www.ndtv.com/india-news/one-...y-government-1241205?pfrom=home-lateststories

NEW DELHI: Over 25 lakh veterans across the country will get at least Rs. 3,000 to 5,000 more in pensions - depending on their last rank and years of service. And this will cost the exchequer a minimum of Rs. 8,000 crore to start with.

The increased pension will be paid with effect from July 1, 2014.

The Government today issued the much awaited One Rank One Pension or OROP scheme. Although, a formal announcement on OROP was made on September 5, no official order was issued because of Bihar elections and the Election Commission's Model Code of Conduct.


Defence Minister Manohar Parrikar signed the official notification today evening making good his promise that the government will implement OROP before Diwali.

Pension arrears to widows and gallantry award winners will be paid in one go, the government said showing sensitivity. Others will get arrears in four equal instalments. But it was clear that veterans may not find all their demands met.

 

[ezsasa]

Rs 10795.4 cr disbursed to 20,60,220 Defence Forces Pensioners/Family Pensioners as arrears on account of OROP. Yearly recurring expenditure is about Rs 7123.38 cr & for about 6 yrs starting from 01.07.2014. Total recurring expenditure approx Rs 42740.28 cr: Ministry of Defence


https://twitter.com/ANI/status/1324662679315783682?s=20

 

[ezsasa]

Five years of historic decision to implement OROP; Over Rs. 42740 Crore disbursed to 20,60,220 Defence Forces Pensioners/Family Pensioners

Government of India took the historic decision to implement One Rank One Pension, OROPby issuing an order on 7.11.2015, benefit effective from 01.07.2014, despite huge financial burden demonstrating its commitment to the welfare of ex-servicemen.Armed Forces Personnel retired upto 30.06.2014 were covered under this Order. Keeping in view the magnitude and complexity of Defence pension, extensive consultations were held with experts and ex-Servicemen before issue of Government order on implementation of OROP.

Ex-Servicemen had been agitating for implementation ofOROP nearly for the 45 years, but the same was not implemented before 2015.

OROP implies that uniform pension be paid to the Armed Forces Personnel retiring in the same rank with the same length of service regardless of their date of retirement. Thus, OROP implies bridging the gap between the rate of pension of current and past retirees at periodic intervals.

A sum of Rs. 10795.4 crorehas been disbursed to 20,60,220 Defence Forces Pensioners/Family Pensioners as arrears on account of implementation of OROP. The yearly recurring expenditure on account of OROP is about Rs.7123.38 crores and for about six years starting from 01.07.2014, the total recurring expenditure worked out to approximately Rs. 42740.28 crore.

OROP beneficiaries also got the benefit of fixation of pension under 7th CPC while calculating the pension by multiplication factor of 2.57.

Five years of historic decision to implement OROP; Over Rs. 42740 Crore disbursed to 20,60,220 Defence Forces Pensioners/Family Pensioners

Government of India took the historic decision to implement One Rank One Pension, OROPby issuing an

pib.gov.in