Source : The Indian Defence Review, © 1995 by Lancer Publishers & Distributors.
Introduction
The trade or employment structure of the Army, broadly, has three groups namely, the General Duties, Skilled and Highly Skilled or Technician groups. The General Duties group comprises the combat categories of armoured corps, mechanised infantry, artillery, corps of engineers, infantry and some categories of the corps of signals. The Skilled group generally comprises operator categories of various types of equipment mostly in the combat support and logistic units. The Highly Skilled group or Technical group includes mechanic and technical categories. The educational standard at recruitment, training period and the period of engagement is graduated upwards from the General Duties group to the Highly Skilled group. The training period varies from about a year or so at the lowest level to about two and a half to three years at the highest level of knowledge and skill. The aim of this article is to examine whether optimum use is made of this manpower and, if not, suggest an alternative method by which improved optimization and cost-effectiveness can be achieved.
The jargon prevalent in the Adjutant General's Branch, the Personnel Management Organization of the Army, is used in this article since it is expressive and brief. The meaning of the jargon is explained for ease of understanding of the uninitiated and lay readers. Quantitative analysis is essential to present the magnitude of the problem. Complicated calculations are given in the tables but derivations thereof are given in the text.
Genesis
Prior to1965, sepoys in the General Duties categories were engaged for seven years of 'colour service' with eight years of 'reserve' liability, Skilled categories for 10 and 10 years and Highly Skilled categories for 12 and 8 years, respectively. Except for Junior Commissioned Officers (JCOs) and Non-Commissioned Officers (NCOs), the age profile of combat units was between 18 and 25 years and those of Combat Support and Technical Services and Logistic Services units wore comparatively more, but not unduly so. Therefore, the high spirits, generally associated with youth, pervaded the entire Army. Re-employment after release from the Army was comparatively less difficult since trained manpower between the ages of 25 and 30 was more acceptable in the employment market. About 65 per cent wore released without the Army incurring any expenditure on pensions on their account since the minimum service for a pension was 15 years. Only JCOs and senior NCOs retired with pensions.
The colour service of the three groups, as defined, was changed to 10, 12, and 18 years, respectively with effect from 25 January 1965 to 15, 15 and 18, respectively with effect from 1 February 1976 and to 17, 17 and 20 years, respectively with effect from 30 June 1979. These increased colour service periods are operative till date. The effects of this upward revision of colour service will next be discussed in detail.
Effects
The increased colour services period has had three serious effects on the Army. These are
Age profile has a direct bearing on the combat- effectiveness of combat and combat support units. The combat effectiveness of such units depends, to a large extent, on leadership (not discussed in this article) as well as the combat skills, physical fitness and the mental attitude of the soldiers. If a high quality of leadership is assumed, it could be considered as a constant and the variables then would be combat skills, physical fitness and mental attitude. In the General Duties categories, all these variables could be developed to a high pitch in a comparatively short period of a year or so with good induction training at Regimental Training Centres. Subsequently, these qualities improve gradually and remain at a high level for a few years.
Taking each attribute in turn, combat skills could be sustained for a longer period by good training in units. Physical fitness, or rather toughness, which is required in the Indian Army owing to the types of terrain and climatic conditions in which it has to operate, starts declining in the late twenties, particularly, agility and physical reflexes, although stamina may not decline so rapidly. However, the decline in mental attitude tends to be much faster, since dash or elan, the propensity to face challenges and take risks decreases with increase in age owing to growing maturity and awareness of responsibility towards wife and children after getting married. Barring exceptions, this decline commences at about the age of 25, say after seven years of service. A proof for this statement lies in the fact that the average annual casual wastage's (i.e., soldiers leaving the service before completing their engagement period for various reasons) during the five-year period from 1980-81 to 1984-85 were 18,302 or about 39.1 per cent of total wastage's (i.e., casual wastage's plus normal wastage's or retirements). Generally, it was found that a large proportion of casual wastage's were from General Duties categories above the age of 25, showing a decline in the will of the soldier to continue in service accepting the rigours and other conditions. Of course, a small proportion of casual wastage's were persons from the Highly Skilled and Technician categories who leave the services to seek greener pastures as early as possible after acquiring a marketable skill and settle down since the service did not provide them employment for a full working life.
The age profile of combat and combat support units during 1985 was 40 per cent below 25 years, 30 per cent between 25 and 30 and another 30 per cent between 30 and 35 years of age. In all probability, the age profile at present is even more inclined towards higher age groups after full absorption of the Second Cadre Review upgradations. With this sort of age profile, in difficult situations, it is possible that the 60 per cent of the rank and file which is past the peak of the required mental attitude and wants to play safe may act as a brake on the live 40 per cent. Thus, at least two of the three variable factors of combat effectiveness show a declining trend, the alarming aspect being the decline in mental attitude. It should be noted that the analysis and assessment presented is based on the casual wastage pattern which is a good indicator of the prevalent general motivation of soldiers. It is also worth mentioning that premature release is granted to only about a third to a half of the number of soldiers who apply for such discharge from service.
The second effect is the problem of resettling soldiers who stay in service till retirement. The average of normal wastage during the five years from 1980-81 to 1984-85 was 28,196. In addition to this, a proportion of average casual wastage would also be seeking employment in civil agencies. Assuming that about 50 per cent of the average casual wastage (a very conservative estimate since accurate figures are not available) of about 9,000 would also be entering the job market, approximately 37,000 ex-soldiers have to be resettled every year. The major proportion, about 67 per cent, of these soldiers belong to the General Duties and Skilled categories who do not have any worthwhile marketable skills. Approximately 75 per cent of these are of ages 35 and above. Civil agencies, governmental or non-governmental, are reluctant to absorb them because of age and also lack of required skills. Besides the two unattractive factors of age and lack of skills, a third adverse factor in providing employment is the expectation of such soldiers to get re-employment in outside organizations at levels equivalent to length of service and rank at retirement and their inability to adjust quickly to the civilian environment. Further, such soldiers also show a marked inclination for service in their home states and near their homes.
Whatever be the reasons, it has not been possible to provide re-employment to a large proportion of soldiers who retire from service every year. The fundamental issue is that an ex-soldier with the current terms of engagement has to be provided a second regular employment for a period ranging from about 18 to 23 years at entry ages ranging between 40 and 35. This is a difficult proposition in any democratic society, particularly one in which high levels of unemployment exist. The deduction that could be drawn from this discussion is that the current colour service engagement of 17 and 20 years is not conducive to proper resettlement of soldiers. Perhaps, the colour service engagement of 7 years (non-marketable skill categories) and 10 years (marketable skill categories) which enabled soldiers to seek a second career at mean ages of 25 and 28, respectively, which was in vogue prior to1965,was more realistic from there settlement point of view.
TABLE 1
ESTIMATION OF ULTIMATE SIZE OF PENSION ESTABLISHMENT
S. NO. |
GROUP AND RANK |
ANNUAL NORMAL WASTAGE |
AGE AT RETIREMENT |
RESIDUAL LIFE SPAN |
ULTIMATE FIGURES |
1. |
Sepoys and Lance Naik (LAP Groups) |
14,253 |
35 |
33 |
4,70,349 |
2. |
Sepoys and Lance Naik (HAP Group) |
2,522 |
38 |
30 |
75,660 |
3. |
Naiks |
3,904 |
40 |
28 |
1,09,312 |
4. |
Havaidars (Both Groups) |
12,488 |
42 |
26 |
3,24,688 |
5. |
Naib Subedars (Both Groups) |
1,171 |
44 |
24 |
28,104 |
6. |
Subedars (Both Groups) |
6,260 |
46 |
22 |
1,37,720 |
7. |
Subedar Majors (Both Groups) |
1,068 |
49 |
19 |
20,292 |
TOTAL |
41,666 |
- |
- |
11,66,125 |
NOTES
The third major effect of the increase in the period of colour service is on the pension bill of the Army. Prior to 1 February 1976 about 65 per cent of soldiers used to be released without pensions. The other 35 per cent of retirees, who wore entitled to pensions, were JCOs, NCOs and the few who belonged to the Highly Skilled and technical categories in whose case the period of colour service engagement was raised to 18 years with effect from 25 January 1965. Thus, sepoys of General Duties categories who were recruited on or after 1 February 1966 (1 February 1976 minus 10 years) and sepoys of Skilled categories recruited on or after 1 February 1964 (1 February 1976 minus 12 years), became entitled to pensions. From the year 1979-80 (1 February 1964 plus 15 years) the Pension Establishment (i.e., total number of pensioners) started increasing but the material jump in magnitude started from the year 1981-82 (1 February 1964 plus 17 years) onwards and increased even further from the year 1983-84 (1 February 1966 plus 17 years) onwards. The average of normal (retirement) wastage over the five years from 1980-81 to 1984-85 was about 28,200. Of this number, about 65 per cent should be considered as sepoy pensioners who became entitled to pensions from the time the colour service engagement was revised upwards. Additional annual increment to the pension establishment from 1981-82 was 18,330. This number would have been released without pensions had the colour service engagement period not been increased. However, when making an assessment of the ultimate size of the pension establishment, the average expectancy of life and the residual life span after retirement upto the average expectancy figures have to be taken into account. The average expectancy of life is assumed as 68 years. The calculation of residual life span is not easy since retirement ages vary depending on the rank at retirement (JCOs and NC0s) and category group (General Duties and Skilled - Low Age Retirement and Highly Skilled and Technical - High Age Retirement). It is estimated that the pension establishment would stabilize at a figure of about 11,66,125 when the number of annual retirees is equal to the number of pensioners who die every year and the increase per year would be about 41,666 (Table 1). This is based on the authorized strength of JCOs and Other Ranks of the Army of about 9,30,000. In this assessment, the annual casual wastage of 2 per cent of the strength of the Army (about 18,000) has been ignored since this wastage is made up every year by fresh recruitment the following year.
Two deductions are made from this analysis. These are, first, in the 'steady state', when the pension establishment stabilizes, it would be 125.39 per cent of the strength of the Army, and secondly, the steady state would be reached in about 28 years after 1980-81, i.e., about AD 2008-2009. The pension bill will increase annually in a cumulative manner correspondingly till this also stabilizes by about AD 2008-2009 provided the inflation rate remains low. These figures relate to only normal wastages. The total actual numbers of pensioners would be about 66 per cent more since people drawing pensions would include family pensioners, disabled persons drawing pensions and those who retire prematurely after completing 1 5 years of service. The total number of pensioners (JCOs and Other Ranks) on 31 December .1983 was approximately 12,59,000 out of which the number of retirees (i.e., pensioners other than family and disability pensioners) was approximately 7,73,400. The pension bill as a percentage of the pay bill in 1973-74 was 17.7, in 1980-81 was 33.5 and in 1983-84 was 37.2. Normal wastage in 1980-81 was about 33,500 and in 1983-84 it was 25,200. It is estimated that normal wastages would, on an average, be about 30,000 per year thereafter. The pension bill would increase by about 3 per cent each year, including pension costs of family and disability pensioners and pensions of premature retirees, for about 28 years and stabilize around 121 per cent of the pay bill.
The next aspect to be examined is whether the pension is adequate to sustain the pensioner and his growing family till the children attain adulthood and, later, him and his spouse after this, assuming that he was not able to resettle himself in a second career. Full pension is one half of the basic pay drawn at the time of retirement. Full pension is permissible to a person only if he completes a period of 33 years of service. Actual pension drawn by the categories of persons under discussion is reduced because of the shorter span of service. Pension in most cases is full pension multiplied by the years of service plus weightage in service for early retirement divided by 33. The weightage in service is between 3 and 5 years depending on the length of actual service. Assuming that the weightage is 5 years (to keep the arithmetic simple), most sepoys draw two-thirds of full pension or one third of last basic pay drawn (two-thirds of one half). Dearness relief being a percentage of pension is also one-third of the dearness allowance on pay. The pay scales of these categories are almost the same as those of unskilled labour in civilian employment and hence, the pension alone cannot sustain the pensioner and his family. As already discussed, providing them a second career is very difficult. Most of them lead a life of penury, many even working as daily-wage labour when such employment is available. A system by which additional expenditure has been imposed on the exchequer without giving meaning ful sustenance to the majority of Army pensioners has come into existence with the increase in the periods of colour service.
It could be concluded that the present terms of engagement are unsatisfactory from all the three major aspects examined. In the long term, they would affect the quality of recruitment.
Examination of alternatives
In this part of the article a few possible broadly indicative or illustrative alternatives are considered. While studying the selected alternatives only the basic elements of manpower costs, i.e., training costs, pay and allowances while in service and terminal and non-effective (pensions) costs have been taken into account. These are adequate to prove the point and lead towards a solution.
A simple cost-effectiveness analysis associated with four different illustrative terms of engagement is made. While making the calculations for this analysis, to keep the costing simple, a set of parameters have been assumed. These and the calculations are shown in Table 2. Since the same set of assumptions have been used as regards the cost of the various factors for the different alternatives, a comparative study could be considered valid.
The four alternatives considered are
Alternative 1 |
7 years of service with a terminal benefits equal to 12 months' pay. No pension. (Note: Terminal benefits) |
Employers' share of Contributory Provident Fund at 10 per cent of pay per month |
8.4 months' pay (interest not included) |
Gratuity at current rates for 7 years' service |
3.5 months' pay |
Total |
11.9 months' pay |
Alternative 2 |
15 years' service with pension. Normal gratuity. |
Alternative 3 |
22 years' service with pension. Normal gratuity. |
Alternative 4 |
36 years' service with pension. Normal gratuity. |
TABLE 2
ENGAGEMENT ALTERNATIVES COMPARATIVE COST ANALYSIS
(Evaluation at 1983-84 prices)
a. Life expectancy (for these calculations) |
65 years |
b. Average age at enrolment |
18 years |
c. Training period |
1 year |
d. Per capita rate of personnel below officer rank
|
|
e. Estimate of per capita rate for 7 years' term |
10,000 |
f. Recruitment and training cost (includes pay and allowances and other facilities) |
13,000 |
g. Average non-effective benefits per year (assuming that pensions are granted at the rate of 50 per cent of the last pay drawn and are linked with the price index) |
6,500 |
h. Terminal benefits to persons released after 7 years |
6,500 |
i. Force level |
1,000,00 |
j. All the calculations are based on these assumptions which have been applied to all the alternatives |
A comparison of costs is given in Table 3 to facilitate further analysis. It is obvious from the tabulation that Alternative 2 is the most expensive. It is the nearest to the current terms of engagement. Alternative 1 (the pre-1965, 7 and 10 years' colour service) is the least expensive since the pension costs are the least, but the number of persons released from the Army every year would increase e by a factor of about 2 to 2.5. A great advantage, of course, is the fact that resettlement prospects at a much younger age (25) are much brighter than at the age of 35. Notwithstanding this, resettlement would still be a problem unless it is planned and built into the system. In the present-day social environment, in independent India when the Army is a national asset and not the asset of a colonial power, a moral obligation is placed on the Government and the service to arrange a second career or compensate an individual adequately on termination of service. It is also significant that most armies in the world have short terms of engagement for their soldiers in combat categories despite greater technological sophistication and mechanization in warfare. Examples are the United States Army in which the normal enlistment period is 3-6 years; in the erstwhile USSR Army the initial engagement period is 2 years; and in the Chinese Army it is an initial active engagement period of 3 years. All these three nations have large standing armies (terms of engagement prevalent in 1985).
Altemative 4 considers the employment of soldiers for a full span of working Idle till the age of 54 or 55. But this alternative would certainly not be acceptable to the Army for application to the General Duties categories who form the bulk of combat and combat support units. As a matter of interest, this alternative approximates to the terms of engagement of the Air Force, below officer-level categories. In 1983-84, the Air Force pension bill was 9.2 per cent of their pay and. allowances bill whereas that of the Army was 37.2 per cent of the pay and allowances bill.
This analysis does not include costs associated with provision and maintenance of family accommodation, provision of schooling, transportation of families during transfers, provision of medical facilities for the families of serving soldiers and for a large number of pensioners and their families. Although not quantified, the indications are that these costs would be lower in the case of Alternative 1.
Considering cost alone, Alternatives 1 and 4 are attractive. Assuming that effectiveness of all categories declines with increase in periods of engagement, Alternative 4 becomes unattractive. But Alternative 1 increases the magnitude of the resettlement problem and unless a satisfactory solution is found for discharging this moral obligation, quality of recruitment is likely to suffer in the long term. Therefore, none of these alternatives by itself or any variation of the period of engagement applicable to all categories does not provide a satisfactory solution. The ingredients of a satisfactory solution are as follows.
Solution of the problem
The Army has about 200 trade categories. Of these 18 categories belong to the General Duties group and their authorized strength is about 4,37,000. 157 categories belong to the Skilled group and their total authorized strength is approximately 3,85,000. 20 categories belong to the Highly Skilled and Technician categories and also the Tradesmen categories (cooks, barbers, mess waiters, safaiwalas and so on). Their authorized strength is approximately 1,10,000 (categories and strengths prevalent in 1985). A study of the characteristics of these category groups would indicate the following.
In outline, the fundamentals of the concept of the suggested solution are a viable combination of Alternatives 1 and 4 discussed earlier. These fundamentals are
With the revised terms of engagement of General Duties (Combat) categories would have a normal wastage of 43,615 per year of which 5,935 would be retirements (JCOs and NC0s) with pensions and 37,660 would be releases without pension. The annual normal wastage of the Skilled categories would be 14,797 (all retirements). These vacancies would be filled by persons released from General Duties (Combat) categories. Hence, the number of such persons who cannot be absorbed by the Army would be 22,863. The Government has to take positive measures to resettle these soldiers. The revised terms of engagement have reduced the annual numbers for resettlement from 37,000 to say 23,000, and, possibly, made it easier since the persons to be resettled are 25 years of age. The annual normal wastage of the Highly Skilled and Technician group and Tradesmen group of categories would be about 3,286 (all retirements). The total number of annual retirements would be 24,018 with a residual life span of 15 years as against annual retirements of 41,666 with residual life spans ranging from 33 years (for the largest numbers) to 1 9 years for Subedar Majors (senior most JCO rank). The Pension Establishment would stabilize at a figure of about 3,60,000 compared to a figure of 11,66,125 if the present terms of engagement were to continue.
In units, the age profile of the Skilled-Remustered categories would be 17.86 per cent for each of the 5-year periods of age 25-30, 30-35, 35-40, 4045, 45-50, and 10.7 per cent for the age period 50-53, or in other words, 53.58 per cent below the age of 40 and 46.42 per cent above the age of40.The age profile of Highly Skilled and Tradesmen categories would be 62.86 per cent below the age of 40 and 37.14 per cent above the age of 40. The majority of these groups belong to the Corps of Signals, Army Service Corps, Army Medical Corps, Army Ordinance Corps and Corps of Electrical and Mechanical Engineers which have both Field and Static (Peace Station) Units. By a system of judicious postings, the age profile of field units could be easily kept low. Functional effectiveness of these units would certainly not reduce but, in all probability, improve since knowledge and skill levels improve with experience. This system ensures that a much better return is obtained from the investment on training. Perhaps, these proposals would produce better sustained motivation and reduce casual wastages.
The financial effects of implementation of these proposals as in 1985 when the Fourth Central Pay Commission was still in session are mentioned briefly.
Implementation
Assuming that the Army and the Government find the proposals made in this article acceptable, the question of implementation arises. Broadly, three methods could be considered. These are
Method 1 has the advantage of bringing down the age profile of combat and combat support units to what is desirable in a matter of about 5 years. Since wastages are occurring at the current rate in Skilled (Remustered) categories, the vacancies thus created, about 18,482 per year, would be filled by remustered General Duties categories personnel. The number of persons in the General Duties categories between the ages of 25 and 30 would be about 95,034. Even if all these persons opt for the revised terms of engagement and also wish to continue in the Army in remustered categories, a policy of remustering one-fifth of them per year would produce about 19,000 optees for remustering. With this number, the system would not be overburdened. Similarly, another 95,034 would be between the ages of 30 and 35 and about one-fifth of this number, about 19,000, would be retiring per year. After a period of 5 years, the terms of engagement for Skilled categories could be raised to 35 years of total service, the first 7 being in General Duties categories and the f low would approximate to what has been discussed earlier, provided that the revised terms of engagement are not made applicable to those in service who were directly recruited. It would take about 12 years after this for the system to stabilize. The disadvantages of this method are the differential treatments to different categories of personnel and also the fact that for the first 5 years the number of persons to be resettled at ages 35 and above would still be about 41.000 per year including the normal wastage f from other categories. The imponderables which would have to be contended with are the number of persons who would opt for the revised terms and not seek remustering and those who would opt to continue with the existing terms of engagement. Further, for a period of 5 years the service is not making optimum use of trained manpower in Skilled and Highly Skilled categories.
Method 2 would be identical in its operation as Method 1 except for better utilization of trained manpower in Highly Skilled categories and Tradesmen categories. This would be marginally better than Method 1.
Method 3 appears attractive because it produces better utilization of trained manpower in Highly Skilled, Skilled and Tradesmen categories. For a period of about 13 to 18 years, there will be practically no normal wastages except the few who may not opt for the revised engagement. Recruitment into these categories will be minimal and only to fill up vacancies created by premature retirements, disablement and premature deaths in service. Further, during this period, except for the first 5 years when General Duties personnel between the ages of 30 and 35 years who would retire with pension, the bill on account of terminal benefits will be minimal. Annual accruals to the pension establishment would also be minimal. But during this period, the Army would be able to remuster only a very small proportion of such volunteers from the General Duties categories. The resettlement problem of Highly Skilled, Skilled and Tradesmen categories would be solved whereas that of General Duties categories would be increased as far as numbers are concerned but mitigated because of the younger age at which resettlement is carried out.
Every one of these methods has its own advantages and disadvantages. On balance, Method 2 would perhaps be the best. A hard decision has to be made not to make available the advantages of the revised terms of service to persons of the Skilled (Remustered) categories who were directly recruited. This would be in the overall, long-term interests of the Army. It could be further modified by remustering fewer numbers into the Skilled categories during the first few years and carrying a deficiency of about 15 per cent and making these up gradually so that the longer service period could be extended later to directly recruited personnel of Skilled categories. The possibility of remustering suitable personnel from Skilled categories into Highly Skilled categories should also be considered.
Conclusion
In this article the inadequacies in the manpower utilization of the Army have been studied in a quantified manner based on actualities that prevailed in 1985, before implementation of the award of the Fourth Central Pay Commission. There is no doubt that the increase in the colour service period was based on good intentions of providing a serviceman some form of pensionary benefit. Unfortunately, over a period of time, this has created serious problems which in the long term would affect the combat effectiveness of the Army and also the quality of recruitment. The terms of engagement which would be more suitable have been suggested. Methods of implementing the proposals have been discussed. Macro Manpower Management is not easy but it is a fascinating subject. It is hoped that some interest has been created to study the subject and find solutions to the problems that have been highlighted.
EDITOR'S NOTE
This article is based on a paper presented by the author to the Ministry of Defence in September 1985, prior to his retirement as Vice Chief of Army Staff and Adjutant General, Indian Army.