Takshashila Discussion Document - A Human Capital Investment Model for India’s National Security System

Executive Summary

India’s burgeoning defence pensions expenditure is unsustainable and begs immediate action. Starting with the Kargil Review Committee, many solutions have been mooted over the last two decades to address this problem but none of them have fructified. Meanwhile, the expenditure has ballooned after the implementation of the One Rank One Pension (OROP) scheme.

In this paper, we propose that the solution of lateral movement of armed forces personnel into the national security system has significant potential to contain the defence pensions expenditure. We conceptualise a model to operationalise the lateral movement solution. We also estimate that the government can achieve savings worth a net present value of INR 1.2 lakh crores if this model is implemented.

Authors