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Thursday, 16 October 2008

From Today's Papers - 16 Oct

Pay Anomalies
Panel backs armed forces
Tribune News Service

New Delhi, October 15
The issue of pay anomalies for the armed forces that had arisen out of the recommendations of the Sixth Pay Commission seems to have been informally decided in favour of the forces as the ruling Congress-led UPA combine will not want this to become a poll issue.Sources said the Congress knew it that the ground swell was in favour of the forces and this had the potential to become a poll issue.

All the four demands raised by the three service chiefs were being considered in a manner that would leave no room for any grudge. A ministerial committee headed by Pranab Mukherjee is all in favour of agreeing to the demands of the forces.The matter may come up in the Cabinet tomorrow or next week. Defence minister A K Antony has already announced that the matter will be sorted out before Diwali.

Rejoinder to article of V Adm PS Das (Retd) by V Adm PJ Jacob (Retd & former VCNS) , addressed to the TRIBUNE



While the observations made by Vadm Premvir Das in his article, " Military-Civil Ties" - (Tribune, 08 Oct 2008) - " Both must be nurtured and honoured", are unexceptionable, the sense the article conveys as well as the timing is most inopportune. It is one thing for, say, an executive editor of a nationwide newspaper to air his views in an obviously prejudiced article, but a totally different one for an erstwhile naval Commander in Chief to do so. Not only does it smack of being influenced by a bias towards the civilian bureaucracy, but, in doing so, also dilutes the focus on fundamental issues in the perception of the public at large.

Statements such as, " The two are powerful weapons of the State; both must be nurtured and honored, including by each other " are mere platitudes. The reality on the ground is very different. Whereas the services may go some distance to achieve this objective, the civilian bureaucracy usually spares no effort to undermine the influence of the armed forces. The present attempt by the Committee of Secretaries injecting three anomalies which were not there in the initial recommendations of the 6th Central Pay Commission, without any discussion or reference to the Chiefs of Staff Committee is a case in point. By this one action, the bureaucracy has forfeited any claim it could make as being an honest broker. This action has also put the political leadership in an awkward position which was totally unnecessary. It is however heartening to note that the political leadership has risen to the occasion as expected and announced the formation of a Committee of Ministers to look into the anomalies. The issue is therefore in good hands and I am sure will be resolved in a just manner.

The article also dismisses the role of the political leadership in one terse line," There are first the political leaders e.g. ministers and the like. They come and go with elections. Then there is the civilian bureaucracy; it has permanence". It is just this perception that I would like to challenge as a result of some experience that I have had in my forty years in the armed forces including three years as Vice Chief of the Naval Staff and Chairman Services Pay Commission Cell in the final stages of the 5th Pay Commission. The anomalies which came up were referred to the Committee of Secretaries who could not resolve the issues that were raised. The Armed Forces therefore referred the matter to the Political Leadership for resolution.

Now to deal with some of the other issues that have been raised. It is not very clear as to what the "good reasons" are that the Attorney General of India, the Comptroller and Auditor General, the Chief Election Commissioner and many others of that ilk can " hardly be placed in positions below those occupied by Service Chiefs". These are just mere proclamations based more on individual perception than on sustainable logic. If the service chiefs had held a higher precedence till then, what were the pressing circumstances to alter it, were it not for an insecure bureaucracy? It is also worth noting that the Chairman of the U P S C has also been raised to these dizzy heights in the most recent rehash of the Warrant of Precedence in Oct 2007.

Note number 10 (c) of the Warrant of Precedence is another insidious ploy used to erode the status of the Services where it states that in all functions held in Delhi, Army Commanders/Vice Chief of the Army Staff or equivalent are to rank below Secretaries to the Government of India even though they are at the head of article 23. When one views this in the context that there are just 3 Vice Chiefs and only 20 Army Commander equivalents spread all over the country as opposed to innumerable Secretaries in Delhi itself, the purport of this note is not very difficult to comprehend.

The fact that the service chiefs are not a part of any decision making authority, especially with regard to issues of security except to be "in attendance" has also been glossed over. It is unfortunate that " this (political) leadership can not function without the advice and support of the bureaucracy i.e. the civil servants " in many cases, to the complete exclusion of the armed forces. Surely, in matters of security, the functional and advisory hierarchy in this domain should be pre-eminently service oriented so that the political leadership gets the full benefit of this arm of government.

What has also not been addressed is another issue that rankles the services. If indeed, " It cannot be argued, as was done viciously two decades ago, that governance is not the business of those in uniform. The armed forces are as much a part of it as the civilian machinery ", then, there is no reason why the armed forces cannot find more representation in civilian governance and administration. A case in point is a major port trust, where the chairman is not even an IAS bureaucrat but an IPS officer. Surely, a naval officer would be more suitably qualified for the same job. Examples abound of such cases where a service officer would have been the logical incumbent for a particular job. There are also a number of instances where people from civil services other than the IAS are appointed to the MOD. If it were not bad enough being told how to run the services by IAS officers, they often have to contend with being told by, say, someone from the Dept of Posts. We are probably the only country in the world where a person can be Secretary Education one day and Secretary Water Resources the next. Is it any surprise that neither our theories nor our dams hold water? Can you therefore really blame the armed forces for being vexed? I believe that we should work towards a permanent solution wherein the Ministry of Defence is manned largely by individuals adequately experienced in the profession of arms. Indeed, why should it be inconceivable for the Defence Secretary to be a service officer?

While military subservience to civilian authority should mean to the politically elected government, the reality is that there is a concerted effort on the part of the bureaucracy to erode and chip away at the legitimate influence that the services need to wield in a vibrant democracy. Unfortunately, narrow political gains and turf wars overshadow the larger interests of the nation. Merely saying that both must operate in synergy is stating the obvious, apart from being wishful thinking.

Navy to protect ships in Somalian waters
Shiv Kumar
Tribune News Service

Mumbai, October 15
The government has allowed the Indian Navy to conduct patrols off the Gulf of Aden and on the Somalian coast, following increased incidents of piracy on high seas, according to sources here.

The naval authorities had proposed earlier this year that it would patrol the seas off Somalia independently or under the flag of the United Nations.The proposal came after a spate of incidents where ships with Indian crew were hijacked by pirates operating in the region.However, the Indian government sat on the proposal on the grounds that India did not have any bilateral treaty with the Somalian government.

The government finally decided to alter its stand after pirates seized the ship MT Stolt Valor nearly a month ago.The ship has 18 crew members and the pirates are said to be demanding a ransom running into several million dollars.Though the ransom amount was brought down to two million dollars, the ship's owners are reportedly not keen on paying.Families of the ship's Indian crew members have been putting pressure on the government to get the ship released.

Navies of a number of countries like Canada, China and Yemen are operating either independently or under the UN flag to combat the menace of piracy.International Maritime Board officials say 54 ships have so far been hijacked by Somalian gangs this year.Officials here say, Somalian gangs control vast areas across the war-torn country and have access to ports, telecommunication equipment and other infrastructure to operate as near-sovereign entities.Hijacked ships are often berthed in ports controlled by the gangs while negotiations for ransom take place.

US Army chief to visit J&K
To hold talks on South-East Asian security today
Ajay Banerjee
Tribune News Service

New Delhi, October 15
The chief of US Army, General George W. Cassey, will visit forward areas in Jammu and Kashmir during his visit in India. The first visit ever by a US chief to a forward base in the state starts tomorrow.He will visit the forward base camp just short of Saichen -located on the border between India and Pakistan.Sources said the General would be flying to the base camp located at a height of nearly 18,000 feet in an IAF chopper.

However, he would not fly over Saichen or land at the helipad at the glacier, which is touted as the world’s highest battlefield.He would not go right to the top as the only way is on board a single engine Cheetah helicopter, which was not used for flying such high ranking dignitaries.Also the weather could get tricky in minutes, hence, no chances were being taken, sources said.

Had he done that the General would have got a first hand view of how soldiers were operating in tough conditions at Saichen.The General will also visit Leh from where he will take a chopper flight till the base camp short of Saichen.It is at this base camp that things like supply chains and managing and moving stocks are managed to the top of the glacier.The idea of the US army seems to be to learn how logistics are managed in such remote and inaccessible locations.

The US probably needs to implement the same in remote and snow bound areas in Afghanistan where it is a part of the NATO forces operating there since 2001.General Cassey will also be holding meetings with his Indian counterpart General Deepak Kapoor tomorrow to review the security scenario in South-East Asia.Here, the agenda is expected to be changing scenarios in Pakistan and the security situation that can emerge.He will commence his visit by laying a wreath at the Amar Jawan Jyoti at the Indian Gate and inspect a guard of honour at the south block lawns. He will also visit the Taj Mahal in Agra.

Meanwhile, the US Navy and the Indian Navy will commence an exercise in the Arabian Sea under the “Malabar exercise”.This will include diverse activities, ranging from gun-firing and fighter combat operations from aircraft carriers to combating the scourge of terror, through Maritime interdiction operation exercises.The Malabar exercises are held every year with different countries participating in it.

Services deserve their due place in society
by Maj-Gen Himmat Singh Gill (retd)

THIS is the first time since Independence that a confrontation between the soldiery and the civilian masters should be cause enough for alarm bells to start ringing in wise minds.

Never before have the three Service Chiefs collectively and openly taken such a strong stand keeping in mind their duty to safeguard the legitimate interests of the men and women they command and whom they see in the instant case of having been humiliated and short-changed.

It is time to understand that in today’s enlightened and well informed world, the soldier does not consider himself to be either a mercenary or cannon fodder. The two varying points of view have brought about this stand off and distrust. One view is that a Pay Commission headed by a retired Supreme Court Judge took time to get everyone’s views including the forces before giving its recommendations. There are others who feel that the forces cannot overturn a Union Cabinet decision.

The civilian bureaucracy has conveniently taken care to upgrade its own monetary grades at the first available opportunity. The servicemen’s point is that a civilian mastery over them does not imply a political order that does not comprehend even their legitimate grievances. This is perhaps the only force that still stands tall in its performance and orderly behaviour. It deserves to be at least equated with its counterparts in the higher echelons of the civil services, including the police force.

The senselessness with which Lieutenant-Colonels have been downgraded in monetary standing and rank with their counterparts being placed in a higher pay band, the carelessness where only the Army Commanders have been equated with Directors-General of Police and not all the other Lieutenant-Generals with it and the persistence with which the pension of the jawan who retires very early with no lateral rehabilitation and not being enhanced to 70 per cent from the present 50 per cent are the three major areas that mark the proverbial red rag to the raging bull in the services.

More than the monetary disparity, it is the fall in ranking and operational gradation (how can a Coast Guard officer cadre override the regular Indian Navy hierarchy in command?; how can a Lieutenant-General with nearly double the amount of service be placed below a DGP?; and how will a Lieutenant-Colonel feel when his erstwhile junior counterpart in the BSF refuses to take his orders in the battle or counter-insurgency?) that should be the cause of serious concern to the government.

These are matters that go beyond the ambit of any panel or pay commission. Over the years, with unmatched ruthlessness, the bureaucracy has been riding over a political order that rarely comprehends service ethos or way of working. It has successfully cut to size the only organisation that remains apolitical and highly proficient in the execution of national aims and interests. Should this edifice also crumble like much of the rest? For the services rendered, can any other service or organisation match the armed forces? One can also refer to the IAS here which, certainly, is no match to the ICS which had left a name for itself.

Some of our best friends and close kin continue to serve in the civil services and the police. There is nothing personal between them and us but it is the principles that we stand for. They have a role to perform and so do we, and all we are asking for is that the government should recognise our special working conditions, service ethos and precedence of command.

Disobedience is simply not in our constitution and while we hold the dignity of the nation high, the government should give us our place in the sun and the dignity and izzat that we have earned with our performance and unimpeachable conduct.

Weakened and demoralised defence forces do not augur well for the country. The Service Chiefs have only temporarily accepted the ad hoc dispensation forced onto them and it would be unwise on anyone’s part to think otherwise and disregard the urgency and seriousness of a matter which all the three services are so deeply agitated and worked up.

It will be a sad day if the three-member high-powered ministerial committee skirts the issue and takes its own time to arrive at a decision. The services and veterans expect the government to give them their rightful place in society. It should understand that the three Service Chiefs have not defied any authority but only acted in the best interests of the troops and warriors that the government has itself charged them to stedignity and fairness.

Now, cops raise pitch over pay parity

Press Trust of India
Wednesday, October 15, 2008 (New Delhi)

After the three armed forces, it is now the turn of the central police organisations (CPOs) and paramilitary forces (CPMFs) to raise a pitch for "parity" in pay scales with their military counterparts. With the government setting up a three-member ministerial committee headed by External Affairs Minister Pranab Mukherjee to consider the armed forces' plea, the CPOs too have decided to seek a political intervention to resolve issues concerning their pay scales.

The chiefs of ITBP, BSF, CRPF and SSB will meet Home Secretary Madhukar Gupta to submit a memorandum seeking a political decision on the lines of Mukherjee committee for inclusion of their "second-in-command" rank officers in Pay Band-4, if the tri-services' Lieutenant Colonels and equivalents are included in this pay bracket.

The Pay Band-4 for Lt Cols is among the four "core issues" raised by the Army, Navy and Air Force in the 6th Central Pay Commission (CPC) and that led to Services refusing to implement the CPC, a decision taken by the Cabinet in August this year.

"The Director Generals (DGs) of all the CPOs and CPMFs will present a memorandum to the Home Secretary this week. We will urge Home Minister Shivraj Patil to request his cabinet colleague, Pranab Mukherjee, to include 'Second-in-Command' ranks also in Pay Band-4," Home Ministry sources said on Wednesday.

Parity in pension

In the news-item (Sept 11), pension of a pre-1996 retired Major-General was fixed lower than that of Brigadier who is one rank lower. The High Court, in a ruling, has stepped up the pension of pre-1996 which the Supreme Court upheld.

In the state services, such anomaly shall also crop up and create financial loss to them while fixing the pension. On the same analogy of the decision of the High Court, the state governments should keep in mind this pertinent point while implementing the pay commission’s recommendation to all categories of employees.

V.K. MOUDGIL, Shamshi, Kullu (HP)

US General to visit Siachen base camp during India visit


Visiting US Army chief General George W Casey will be treated to an exclusive tour of Siachen Glacier base camp near Leh by the Indian Army during his three-day-long stay in the country beginning tomorrow.

That apart, Indian defence establishment will hold a lengthy discussion with General Casey on the emerging security scenario in South Asia, particularly in the wake of heightened tension in the Pak-Afghan border, where the US troops have been forced to wage a battle against Taliban runaways.

The US Army's chief of staff will arrive in New Delhi to hold talks with the top brass of the Indian defence forces to further enhance the growing military relations between New Delhi and Washington, Defence Ministry sources here said today.

Besides meeting and discussing issues of mutual interest with Defence Minister A K Antony, General Casey would hold talks with his counterpart, Army chief General Deepak Kapoor, when he would be given a presentation on the South Asia security scenario.

"India will discuss the current security challenges in South Asia with the US General," a Defence Ministry source said without divulging specifics of the talks and issues that may crop up.

"But, yes, he will be taken on a tour of the world's highest battlefield Siachen's base camp on Friday," the source confirmed.

Siachen has been a bone of contention between India and Pakistan since the mid 1980s when India sent its troops to the 72-km-long Glacier to pre-empt a Pakistani move to send Japanese trekkers to the snowy heights ranging from 18,000 feet to 22,000 feet.

The US Army Chief of Staff will also visit the National Defence College here to deliver a lecture on "Landpower in 21st Century" and also visit Agra, before returning home.

He is also expected to visit a few more military bases outside Delhi during his visit that would end on October 18, sources said.

New Delhi and Washington have been coming closer to each other forming greater strategic relationship on military matters in the recent past.

A host of senior US armed forces' chiefs have been visiting India in a bid to enhance the military-to-military co-operation between the two countries.

Apart from army-to-army exercises, both the countries have recently entered into military equipment and platform contracts, with New Delhi allowing US companies to participate in Indian defence tenders since 2003.

Indian and US armies have been holding a series of military exercises since 2002. While India has hosted US troops for the annual 'Vajraprahar' series of exercises in the last five years, US hosts Indian troops for the 'Shatrujeet' series.

Both the series are high-level counter terrorism and counter insurgency exercises aimed at honing skills of the two sides.

While India has been battling insurgency in Jammu and Kashmir and the North-East for several years now, the United States is taking on insurgents and terrorists in Iraq and Afghanistan after the 9/11 strike by al Qaeda destroying the twin towers of the World Trade Centre.

The US armed forces have benefited from the expertise gained from Indian troops during their Operation 'Enduring Freedom' in Afghanistan.

The two sides trained in Indian Army's Vairangte-based Counter Insurgency and Jungle Warfare School (CIJW) in Mizoram in 2004 for the first time.

Special Forces of the two countries have participated in joint exercises in different and difficult terrain in India such as mountainous Ladakh and deserts of western Rajasthan.

India signed up with the United States for six C-130 J Hercules transport aircraft for its Special Forces, apart from deals involving IAF and Navy such as USS Trenton rechristened as INS Jalashva.

NSIT fest to showcase defence equipment

Wed, Oct 15 03:29 AM

An exhibition on Defence Research and Development Organisation (DRDO) will be the main attraction of the three-day marketing and technology fest - Innovision 2008 - organised by Netaji Subhash Institute of Technology (NSIT).

Life-size models of arms and equipment used by the Indian Army, such as the radar systems, missiles, small arms and ammunition as well as heavy artillery, will be showcased in the exhibition. The Indian Army and the DRDO will display and explain the technology being used and the ones being developed by the students. The exhibition will also allow the young engineering minds to explore the working of the DRDO and also take up certain assignments or projects with it. One of the main USP of the exhibition will be the presence of serving officers and soldiers of the Indian Army who will interact with the students and tell them about real life usage of the equipment. The students will also get a chance to interact with the DRDO researchers who have worked on developing the items on display.

Also on the itinerary is an Air Show by the Indian Air Force that will include skydiving and paragliding displays. Innovision also brings together the future managers and literary giants of India. A number of managerial and literary events will test the mettle of students, with quizzes and advertisement making competitions as part of the package. The biggest managerial event will be the Ultimo Empressario B Plan which will require students to create a complete business plan for a company.

US cos opt out of IAF's attack helicopter bids

PTI | October 15, 2008 | 11:00 IST

Two US chopper manufacturers, Bell and Boeing, have opted out of the Indian Air Force's tenders for attack helicopters, giving a severe blow to India's effort to get six global companies to participate in the bids.

"The US companies have refused to submit their bids for two very different reasons and have already explained their decision to the Indian defence top brass," a Defence Ministry official said in New Delhi on Wednesday.

India had released the tenders -- Request for Proposals in defence parlance -- in May this year for 22 combat helicopters to augment its fleet of around 30 Mi-25 and Mi-35 attack helicopters.

Of the six global players asked to submit their bids within three months, India received proposals from the Russian Kamov and Mil, Italian-British AgustaWestland and French Eurocopter.

Boeing, after showing initial interest in the bids, refused to submit it later, as it wanted more time to prepare a concrete proposal meeting all qualitative requirements of IAF.

It sought an eight-week extension of the deadline, originally set for August 23 this year. However, the Defence Ministry refused to provide such a long time, considering that India wanted to complete the procurement of the 22 attack helicopters before May 2011.

The government, on receiving the request from Boeing first agreed to extend the deadline by another 30 days to reset the last date for submission of the bids in September.

But Boeing, examining the RFP requirements, realised that it required more time to be able to send an adequate response and decided to withdraw from the competition, Defence Ministry officials said.

"The company studied the government's request seriously and thoroughly, and we also sent representatives for pre-bidder's conference in New Delhi with our AH-64 Apache helicopter in mind as a probable platform," Boeing officials said.

"However, after reviewing IAF's attack chopper's RFP, Boeing concluded that it will not be able to prepare a fully compliant proposal that addresses India's unique requirements with the allotted time. This was difficult, but a necessary decision to keep our standards high," they said.

Bell Helicopters, on the other hand, withdrew its participation, realising that its offering of AH-1Z Cobra attack helicopter was available for exports only through Foreign Military Sales route.

But, India had insisted in the RFP that it would procure the chopper directly from the company and not through the government route.

With the bids closing, India is now pursuing proposals received for Italian-British AgustaWestland's AW129, European consortium Eurocopter's Tiger, Russian Kamov's Ka-50 and Mil's Mi-28.

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Make Your Money March (Outlook Money 22 Oct)


Life in the defence forces has its own set of complexities. Here's how to get over them and plan for a great money life

Sunil Dhawan & Urmila Rao

Side Show Ritesh Laddha 26 Anshul Sharma 30 Col. D. Mukherjee 48 Easy Investing Steps Akhilesh Kumar Das 54

The safety, honour and welfare of your country come first always and every time. The honour welfare and comfort of the men you command come next. Your own ease comfort and safety come last always and every time.” Thus goes the saying in the Army. This holds true for about 1.3 million people in active service in the Indian Army and about 165,000 in the Indian Air Force and the Indian Navy. Steeped in the doctrine of sacrifice, their lives, in almost every aspect, are extremely different from those of the billion-odd civilians that they are dedicated to protecting. At Outlook Money, we routinely receive letters from our soldiers. They ask us for help in improving their financial lives and are posted from remote corners of the country. The return address is, as always, c/o 56 APO.

The problems of managing finances in the armed forces are as unique as the life in it. In an environment where you are trained to put yourself last, it is likely that you put your finances even later.

There are various reasons why life in the forces is different. The day you join, your world makes a paradigm shift. You are, in many ways, taken care of so that you can focus unwaveringly on your job. ‘You concentrate on your work and we will take care of your needs’, is the sense you get.

Accommodation in various locations is subsidised. Ration, including daily food as well as household items, and medical treatment are free. While the pay is not comparable with many in non-government jobs, you live a reasonably comfortable life. But life outside the cocoon of the cantonment is different. Not surprisingly, the biggest regret of many who have retired from the defence services is that they did not plan their finances better. But there are practical problems to overcome before you do.

The first hurdle is the pay. True, servicemen are somewhat insulated from the inflationary effects on prices of most daily necessities and healthcare, but few other things. According to the Sixth Pay Commission’s recommendations, in addition to the pay hike, defence personnel would get Military Service Pay (MSP). While officers will earn an MSP of Rs 6,000 a month, those below will get Rs 2,000. A review of the recommendations is likely to bring pay on a par with that of Central government officials.
Promotions, and, thus, annual hikes that go with it, can be a sticky issue too. By some estimates, in one round, just a third of the officers make it to a higher level. There is also no option of leaving and going to another organisation to get a hike, if you want to remain in the armed forces, that is. So, saving enough is a privilege available only to a few.

Some expenses are peculiar to Army life. For instance, apart from their heroic feats, their parties are famous too. With most of them compulsory, the mess bill becomes a non-discretionary spend. And social propriety demands of birthday gifts and wedding gifts to a large pool of colleagues add up to a significant figure in the expense list. Not surprisingly, most servicemen find themselves hamstrung when it comes to discretionary expenses—many find buying white goods a difficult proposition.

Then there is the constant shifting from one place to another. Someone serving in the Army for 20 years could easily have shifted base eight to nine times. This creates a sense of transience that is a serious handicap to long-term wealth creation.

In this respect, people in the Air Force and Navy are slightly better off. They have fewer field postings. A 30-year service in the Air Force means about nine postings and most of these in places that have some civilian population. Army postings could be in areas totally cut-off from the world outside. As far as location goes, the Navy has it best. Though their posting could be onboard a vessel or on land, they are often in cities like Mumbai, Vishakhapatnam and Kochi. Most Navymen are posted in Mumbai for at least five years.

Often, officers not satisfied with the quality of schooling of their children opt to send them to private, often expensive schools. Some dip into their provident funds to pay the lump sum admission fee. In some cases, working spouses stay apart to hold down their jobs, which means the costs of an extra establishment.

The constant shifting creates logistical problems too. Getting a residence proof, needed for any kind of investing, is quite a bother. In fact, most defence personnel find it difficult to even get a PAN card. Also, there is the risk of important documents, such as insurance policy certificates, getting lost in transit.

Finally, coupled with the sense of never settling down comes the lack of awareness of financial products and investing methods. Nine of 10 Army officers end up with the Army’s Defence Services Officers’ Provident Fund (DSOP), which pays Employees’ Provident Fund rates of 8.5 per cent, as the only saving other than bank or post-office deposits. For those going beyond this, buying land is a priority, but with postings in remote areas, the process becomes tedious. For most, stock investing is still as bad as gambling. And for those it’s not, information is often thin and trading opportunity slim as market timings clash with duty hours. An other common investment avenue is gold. That recipe is likely to disappoint. Except for land, there is nothing in most portfolios that allow a person to guard against inflation or ensure that the money grows. So here are a few things you could do to grow your money and, hopefully, ensure a better money life.

Most Armymen don’t consider this as an investment option. With defence families making sacrifices already, the sentiment is not to risk anything that involves the family’s future. There is also a reluctance to cut down on living standards and deprive oneself of the money now in expectation of future gains. Also, in a job that courts death, it is understandable that a long-term view is difficult to get into. Further, constant shifting does not help build a relationship of trust with a financial planner who can help.

OLM recommends. Equities are the only means to long-term wealth creation. We recommend that a portion of money be invested in equities every month. Also, the contribution to DSOP be reduced under a suitable asset allocation ratio. You will get a basic bread and butter pension, so you need more risk today to get the jam in your sunset years and to educate and marry off your kids. A young officer should put at least 50 per cent of his savings in stocks and equity mutual funds. The DSOP can act as the debt component in the portfolio.

While investing in stocks, stick to lower-risk, blue-chips. Else, invest in either a Nifty BeES, which is an exchange-traded fund that you can ask your broker to buy from anywhere, or a good diversified equity fund. For this, you can check products recommended by us in the OLM 50 (see and choose four- and five-star rated mutual funds. You can also buy stock and mutual funds online—and we strongly urge you not to get into active stock trading, it is a disaster for people with small surpluses. Systematic investment plans (SIPs) will also offset any relocation-related disadvantages.

What to buy: Nifty BeES (see Fund Pick, Page 50).

Life. The Army has its own life insurance scheme. While officers are covered for Rs 15 lakh, others are covered for Rs 7.5 lakh. In the Navy, life cover is Rs 20 lakh, and the Air Force cover is Rs 22 lakh for officers and Rs 11 lakh for airmen. But, what is not taken into account is the fact that life insurance needs change. The actual financial liabilities of the personnel need to be assessed. If you find that you are underinsured, you will have to squeeze out that much extra premium. Children’s plans could be one option to safeguard the financial interests of children. However, as you are a higher risk group, the premium charged on your policy would also be higher.
OLM recommends. Buying insurance policies on the Internet is difficult, especially for high-risk professionals. But even small towns have insurance agents. You can buy policies from them and renew them over the Net. A family member can also issue a renewal cheque if you are in a remote place. Policy certificate is a very important document at the time of claims, and should not be lost during relocations. The spouse should be made aware of the existence of the policy and the whereabouts of the certificate. As a thumb rule, one should have a cover that is 5-7 times one’s gross annual income. Any shortfall can be met by a pure term plan (see ).

Medical. All your medical needs, as well as those of your spouse or dependent children are covered during your service years. Expenses incurred in hospitals not empanelled are also reimbursed.

OLM recommends. No additional health cover is required. Post-retirement, a one-time payment of around Rs 15,000 has to be made, which will ensure the continuity of medical cover. Make sure you do that.

Provident fund. The DSOP is similar to the employee provident fund (EPF). But unlike the EPF, the Army does not contribute anything towards it. Interest rate is same as for the EPF—8.5 per cent.

OLM recommends. DSOP does provide risk-free returns, but wealth creation is not possible through this route. After accounting for inflation, net returns would be rather low. We recommend that you redirect some of the money to equities as that is where you are likely to grow your money. Depending on your age and financial goals, a suitable asset allocation can be ascertained. Your DSOP can comprise the debt portion of your investment.

Pension. Your pension comes from a defined benefit scheme, unlike the defined contribution scheme that applies to non-defence employees who joined after 1 January 2004. The benefit in terms of monthly pension is a fixed amount and it continues for the rest of your lives. Currently, about 50 per cent of the last pay is given to the officers as pension. On surviving 15 years, this amount gets doubled.

The pension is a startling point for most defence personnel when they retire. Half of the last pay is insufficient to maintain living standards since you will have to bear the additional cost of housing, power, water and the like. You should ideally build a retirement corpus of your own, apart from this pension scheme.

Start on the day you join the Army. If you invest Rs 1,000 every month for 30 years, your money would grow to about Rs 34 lakh, assuming 12 per cent annual return. You could invest in diversified equity mutual funds, or the yet-to-be launched new pension scheme (NPS). While contributing to it is not mandatory for defence personnel, it should be a highly portable scheme and you can contribute from many places in India. It will also give you the option to invest part of your money in equities. Consider it since it is also a low-cost pension scheme.

What to buy. Wait for the NPS.

Most men in uniform are not in debt. Most have only one credit card. They are risk-free cardholders as any default is considered a legal offence and they can be chargesheeted under Army law.

OLM recommends. Use your credit cards minimally. Do not roll over any dues. Enroll for electronic clearing of your dues from your bank to avoid late payment charges and interest. Give your card issuer your new address each time you move.

This is the hard-landing time for most of you. Given your saving patterns, most of you would have to compromise on your living standards. The good thing is that defence people are still fighting fit. And that gives you a shot at a second career. The Directorate General of Resettlement of the Army can help here. It organises employment-oriented training programmes for officers so that they can equip themselves with qualifications for a job (see The programmes last three months to three years and are offered in fields as diverse as information technology to security services to HR services to law to tourism.

Recently, half-year management courses have been introduced at Management Development Institute, Gurgaon, and Indian Institutes of Management, Kolkata and Lucknow. Next in line are other IIMs.

While a career in defence is not the highest paying, it has its rewards. And with a bit of planning, life afterwards can be as fulfilling. Our next story is about three people who are enjoying life after the armed forces and how they did it.

All financial plans have been made by iTrust, a Gurgaon-based financial advisory firm.

US army chief to visit Siachen

By Iftikhar Gilani

NEW DELHI: United States Army Chief General George W Casey will visit Siachen Glacier in Jammu and Kashmir during his three-day stay beginning on Thursday. The visit begins a day after Pakistani National Security Adviser Mehmud Ali Durrani returned to Islamabad after talks with his Indian counterpart MK Narayanan on Siachen and other contentious issues.

Defence Ministry sources said that Casey would visit the Siachen base camp, where he will take stock of high-altitude land warfare techniques. During his three-day visit, the Indian defence establishment will hold a lengthy discussion with the general on the emerging security scenario in South Asia, particularly in the wake of heightened tension on the Pak-Afghan border. Sources said the US Army chief will hold discussions to further enhance the growing military relations between New Delhi and Washington.

He will meet Defence Minister AK Antony and will hold talks with his counterpart, Indian Army chief General Deepak Kapoor. “India will discuss the current security challenges in South Asia with the US general,” a Defence Ministry source said. “We will take him to tour the world’s highest battlefield, the Siachen base camp, on Friday,” the source confirmed. The US general will also visit the National Defence College to deliver a lecture on ‘Land power in the 21st Century’ and also visit Agra, before returning home. He is also expected to visit a few other military bases outside Delhi during his visit, sources said.

Tatas to set up first defence aerospace hub near Hyderabad

Express news service Posted online: Oct 16, 2008 at 2346 hrs

HYDERABAD, OCTOBER 15 : The Tatas are proposing to set up the country’s first defence and civil aerospace hub at Aadibhatla, near Hyderabad.

Speaking during the inauguration of the India Aviation-2008 at the Begumpet Airport on Wednesday, Chief Minister Y S Rajasekhara Reddy said the Tata Group’s Tata Advance Systems would invest Rs 500 crore in the proposed special economic zone to set up the aerospace hub to manufacture radar and satellite systems. The AP Government would provide 50 acres of land to the Tatas at the SEZ near the hardware park to set up the aerospace hub.

The Tata’s aerospace hub is over and above the Lepakshi Aerospace Station and Academy that may also come at Chilamatur in Anantapur district. Besides, the Lepakshi Aerospace Station and Academy will also come up at Chilamattur in Anantapur district for design, manufacture and maintenance of military and civil space vehicles.

Besides several small business jets by Dassault, Bombardier and other companies, an Airbus 319 acquired by Air India landed at the airport during the country’s first-ever international aviation exhibition and air show. The Airbus 319 would be inducted into the Air India fleet. Airbus, Boeing, Hindavia, Jeppesen, Bell Helicopter are also participating in the show. The much-awaited Airbus A 380 would land at 12 noon on Thursday.

Inaugurating the exhibition, Civil Aviation Minister Praful Patel said the aviation industry in the country was in the midst of a crisis but the Government was doing all it could to help them out. “It is a tough time for the entire industry worldwide,” he said.

“We have set the ball rolling for the development of the Indian aviation sector. We are also committed to making aviation safer and cleaner with the co-operation of other countries like the US,” he said. “Indian aviation is here to stay.”

Patel said to develop the sector in the country, about 400 old and unused airports would be made operational in a phased manner.

Navy to have its own selection board

Sanjoy Bhadra Kolkata, October 15, 2008

Come 2010, Navy aspirants will not have to appear before the Army Selection Board as Indian Navy will launch its first ever selection board centre of the country at Diamond Harbour in West Bengal.

Till now, Indian Navy aspirants had to undergo their selection before the Indian Army selection panel.

Waking up to the need, the Defence Ministry has cleared the proposal of the Indian Navy to have a staff selection board of its own.

Indian Army spokesman, Group Captain R K Das said, "We have received the clearance order from the ministry. We will soon start the work to erect the complex at our Naval Coastal Battery Office in Diamond Harbour."

Since Independence, Indian Navy applicants, after completing the written test, appear before the Indian Army Selection Board for their selection process.

These selection board offices are located at Bangalore, Bhopal and Allahabad. This norm had attracted criticism from several quarters. With Selection board of its own, Indian Navy will have its selection exam conducted at its own unit.

Defence sources revealed that the proposal to have its first selection board was proposed by the Indian Navy two years back.

The proposal, however, was cleared last week. The clearance order reached the Eastern Zonal headquarters in Kolkata on Wednesday.
Indian Navy officials briefed that they will have their board office at Diamond Harbour.

The work will start on January, 2009 and is expected to be completed in one year. As soon as the selection board office will be completed, the Naval selection board office will start functioning.

Army’s EME corps celebrates 65th Anniversary

The Corps of EME celebrats 65th Anniversary on 15 Oct 2008. The Corps was raised thick of Second World War. ver the journey of past six and a half decades, the Corps has emerged as an efficient ‘Total Solution Provider’ for the myriad challenges that the diversified equipment holdings of the Indian Army pose.

The Corps is entrusted with the onerous responsibility to ensure operational readiness of all the equipment of the Indian Army. While the man behind machine is still the war winning factor, the emerging technologies have begun to play a predominant role in contemporary battle fields. Management of these technologies is the new dimension that has been added to the responsibilities of the Corps and the Corps already has the mechanism to handle these changes in place in the form of its ‘Think Tank’ namely HQ Technical Group. HQ Technical Group has already operationalised ‘Technology Centres’ in every Corps Zone to manage these technology transitions. These ‘Technology Centres, are acting as an active interface between the users and all the newly inducted equipment.

In order to take benefit from the expertise held with the industry, the Corps has translated Army Industry Partnership into reality in a few areas of technology. The Corps has been given the responsibility of indigenisation which will save the State substantial revenues in import. The Corps has made long term plans for the modernization of all its Base Workshops which are the power-houses of captive knowledgebase and very potent defense industries which have met the needs of the Army in all major or minor conflicts of the past. The Corps has established in house R&D in all the base workshops and has also given a major thrust to the development of simulators which are an extremely cost effective tool of training. The Corps is developing these simulators not only for the Army but for paramilitary and police also. The Corps has embarked on an ambitious automation process across its length and breadth to reap the benefits of revolution in the IT.

The Corps has the rare distinction of producing several outstanding sportsmen and adventurists of international repute. ‘Flying Sikh’ Padma Shri Milkha Singh who is a living legend in the Indian Sports arena, Padma Bhushan, Padma Shri Maj HPS Ahluwalia, the first Indian Army officer to flutter the Army flag atop Mt Everest and Col JK Bajaj, the first Indian to reach the South Pole are a few to name.

Speaking on the occasion, Lt Gen AKS Chandele, the Director General and the Colonel Commandant of the Corps complimented the officers and men of the Corps for their professionalism, selflessness and devotion to duty which has allowed the organization to grow into a fine and efficient whole, imbued with a dedicated determination to excel in all the assigned responsibilities.

Armypost Awards 2008

Lt Gen ML Naidu, Vice Chief of Army Staff gave away the Army post Awards to the officers and organizations for their contribution to the growth of Postal Life Insurance in Army. The function was be organized at 1 CBPO Complex, Rao Tula Ram Marg, New Delhi today. The Postal Life Insurance Scheme was introduced in 1884 as a welfare institution for Postal employees which was subsequently extended to all Government employees and large group of salaried employees. The scheme was introduced in Army Postal Service (Base Circle) on 01 Jun 1975 for processing and maintenance of PLI in Defence Sector.. Risk Cover is full. War, sea and air risk covered with no extra premium. PLI offers six types of policies with the minimum sum of twenty thousands and maximum 10 lacs to meet the individual needs of the insurants.

Initially, Defence personnel of three services and Border Road organization were eligible for Postal Life Insurance. Subsequently PLI coverage was extended to the personnel of Para Military forces under operational control of Army. Since last year the Defence civilians have also been brought under PLI coverage from APS.

PLI started in APS with a humble beginning of just 16,745 policies amounting Rs. 3.5 Crores during 1975 and today it has become the highest insurance procurer among all Postal Circles of Dept of Post. During the financial 2007 – 2008 APS ensured nearly 1 Lakh lives for a sum of Rs 1344.6915 Crores. Defence Personnel are opting for PLI polices though they are well protected under compulsory Army Group Insurance Scheme. This reflects high about the faith, the man in uniform are having on PLI and APS. As on date, more than 7 Lakh active policies for an assured value of Rs 7297.41 Crores are serviced by APS.

All operations of PLI were computerized in 1990 which helped in better customer satisfaction. APS issues timely advance notices for stopping recovery of premia, ensures payment of maturity amount on due date. The loan facility is also available in PLI with a nominal interest. For the welfare of the troops and to interact with PLI Cell a toll free telephone has been installed since Dec 2005. The facility is being utilized by more than 300 personnel from all over India each week.

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