Non Functional Upgrade (NFU)

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. No reasoning or explanation was given for implementing NFU except that it would "alleviate stagnation in the civil services".

The Manmohan Singh government excluded the Armed Forces from the NFU scheme without explanation or assigning any reason, despite protest by Armed Forces headquarters. 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, Prime minister Manmohan Singh, appointed a 'Committee of Secretaries'. But the committee, predictably, evades the issue.

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".

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 They recommend that NFU be withdrawn from the Organized Group ‘A’ Services, noting that they are far less deserving than the officers of the Defence Forces.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.Considering the wide ramifications of the NFU scheme, and the backlash, they recommended that NFU scheme be abolished.

Impact

The 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. It affects pay and pension structure, status colonels, brigadiers and generals. It alters command and control frame work. The exclusion from NFU distrust between the armed forces and the bureaucracy. It fuels One Rank, One Pension (OROP) protests. And like OROP, it becomes 'honor and izzat' issue.

BJP and NFU for the Armed Forces

The Narendra Modi led Bharatiya Janata Party Government which replaced UPA Government, in May 2014, 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 their Joint memorandum to the MOD.

MOD Opposes NFU for Armed Forces.

The MOD while favouring NFU for defence-civilians has opposed NFU for the armed Forces. Ministry of Defence (MOD) on the instructions of Manohar Parrikar, Defence Minister, on 24 December 2014, informed Chairman of the 7CPC that MOD does not favour NFU for the Armed Forces. In its submission justifying its stand against the grant of NFU to the armed forces officers, the MOD recalled the reasons given by Cabinet Secretary's Committee, in 2011, in not making "any recommendations on the issue" of NFU for the armed forces. The reasons cited were: the non-functional upgradation scheme is applicable only to organised Group ‘A’ Services which includes Indian police officers but excludes armed forces officers; the average age of entry of commissioned officers is lower than those joining Group ‘A’ Services; and that the he norms for recruitment, promotion and rank structure of the Defence Forces are not identical to those of Group ‘A’ officers;"the service conditions of Defence Forces are quite different from those of civilian employees"; the armed forces officers get "Military Service Pay and various allowances..... which are not available to civilian officers"; and that Defence Forces officers are covered by a separate time-bound promotion scheme up to the level of Colonel. The MOD also informed the 7CPC that "the Pranab Mukherjee Committee Report' did not consider "this particular issue" of NFU, and "that for functional purposes, salary cannot be the basis to determine status". The MOD, after reiterateing 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, in its concluding remark noted, "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".

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. The 6 th CPC recommendation is " whenever an Indian Administrative Services Officer of the State or Joint Cadre is posted at the Centre to a particular grade carrying a specific grade pay in Pay band 3 or Pay Band 4, the officers belong to batches of Organized Group A Services that are senior by two years or more and have not so far been promoted to that particular grade would be granted the same grade on non- functional basis from the date of posting of the Indian Administrative Service Officers in that particular grade at the Centre."

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.

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.

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".

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.

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.

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]

2009-2014

24 April 2009

Department of Personnel and Training (DOPT) issues instructions on implementation of grant of non-functional financial up-gradation (NFU) for all "Organized Group-A Civil Services", which includes police officers but excludes officers of the Armed Forces.

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.

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'.

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).

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.

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.

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"

August 2014

Armed Forces headquarters submit a Joint Services Memorandum (JSM) to the 7CPC flagging issues affecting the armed forces, including the grant of NFU.

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.

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.

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".

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.

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.

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" . 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".