Introduction

On 14 June 2022, the Union Cabinet unveiled a new recruitment scheme for the Indian armed forces. Named Agnipath, the programme will henceforth apply to all fresh recruitment of soldiers, sailors, and air force personnel and is a radical departure from past recruitment policy for the services. Young people joining under the scheme will be known as Agniveers.^[1] As against the earlier recruitment policy under which soldiers were required to serve a minimum 17 years before retiring with a life-long pension, Agnipath provides a four-year tenure with no gratuity or pension benefits for at least three-fourths of each batch who will be demobilised after four years. The government has justified the new scheme, saying it is transformative in nature and will lower the age profile of the armed forces. The government is hopeful that the initiative will attract more young, talented and tech-savvy Indians into the armed forces.

Despite its purported benefits, the announcement of the scheme was met with protests in different parts of the country, with some of them turning violent.^[2] To assuage concerns, the government has since announced a number of fresh initiatives to make the scheme more attractive, while making it clear that it will not be withdrawn.^[3]

This brief outlines a historical survey of the minimum engagement period (or the so-called ‘colour service’) of the armed forces, and seeks to understand its rationale and the likely impact. It examines the scope of absorption of Agniveers into other jobs after their demobilisation, and discusses the need for reform of the officer cadre of the armed forces. 

Agnipath: An Overview

The Agnipath scheme, unveiled by Defence Minister Rajnath Singh on 14 June, represents a key revamp of the way the services have been recruiting for the Other Ranks (ORs). Its highlight is the new four-year engagement period—the colour service—beyond which only up to 25 percent of each batch of Agniveers will be inducted into the regular ranks to serve at least 15 more years. However, for these 25 percent permanent recruits, the four-year service put in as Agniveers will not be counted for pension benefits.^[4] The entry age for enrolment will be 17.5 to 21 years,^[a] and recruitment will be on “All India all Class” basis. In the first year, 46,000 Agniveers will be recruited.

The scheme provides a financial package with a monthly composite salary of INR 30,000 in the first year, progressively increasing to INR 40,000 by the fourth year. All Agniveers will get allowances—such as risk and hardship, ration, dress and travel—and, in case of death or disability while on duty, will get compensation that includes a non-contributory life insurance of INR 48 lakh, as well as an ex-gratia payment of INR 44 lakh. Agniveers will, however, form a distinct rank in the armed forces, different from the existing ones. They will also not be eligible for certain benefits given to ex-service personnel, such as the Ex-Servicemen Health Scheme (ECHS) and the right to make purchases from the military’s Canteen Stores Department (CSD); they will also not be accorded ‘ex-serviceman’ status.^[5]

After their four-year tenure, all Agniveers will get a ‘seva nidhi’ severance package of around INR 11.71 lakh, comprising 30 percent monthly contributions from their salaries, a matching contribution from the government, and interest earned.^[b] It will be exempt from income tax. 

The Road to Agnipath

According to the government, this reform will add a youthful profile to the armed forces.^[6] The Ministry of Defence (MoD) has estimated that the scheme will help reduce the average age of the armed forces from the present 32 years to 24-26. This is in keeping with the recommendations of several expert committees and commissions in the past, all of which have strongly advocated a more youthful military to deal better with India’s security threats.^[7] Indeed, many other countries’ services have a much lower average age. The MoD’s own study of the armed forces of the US, the UK, France, Israel, Russia and China reveals that the corresponding average age in these countries is 26-27 years, with an engagement period of two to four years and a training period of three to six months.^[8]

While unveiling the Agnipath scheme, the government denied any financial motive behind the radical change in recruitment policy. Defence Minister Rajnath Singh emphasised: “We never see the army from the point of view of savings.”^[9] The scheme, however, is equally driven by a strong imperative of controlling the rising personnel cost of the MoD, which has been a source of concern, especially because it reduces the funds available for capital procurement, equipment maintenance, and research and development (R&D).

As Figure 1 illustrates, the MoD’s personnel costs on two accounts—Pay and Allowances (P&A) and Pension—have increased from 50 percent to 55 percent in the past 10 years, while the share of acquisition and stores expenditure (the maintenance expense of existing equipment in the inventory) has declined by four percentage points. The share of R&D, which is critical for the self-reliance that the government is fervently trying to enhance through its ‘Make in India’ initiative and Atmanirbhar Bharat Abhiyan, hovers at a meagre 3-4 percent. In 2022-23, P&A and Pension will add up to INR 287,040 crore, or 79 percent of the MoD’s total revenue expenditure.

Figure 1: Broad Distribution of the MoD’s Expenditure, 2013/14-2022/23

Among all the broad budget heads, the impact of personnel cost is particularly ubiquitous on capital acquisition. The pressure on procurement has been so acute that the government has found it increasingly difficult to pay even for ongoing contracts. In 2019-20, for instance, the latest year for which official statistics are available, allocations for acquisition were nearly 30-percent lower than what was required to pay for signed deals, let alone new ones.^[10]

As Figure 1 further illustrates, the biggest contributor to the rising share of personnel cost has been defence pension. As of 01 April 2021, pension was being provided to 3,294,181 retirees comprising 2,679,645 military veterans or their dependents and 614,536 defence civilian pensioners.^[11] In the last 10 years (2013-14 to 2022-23), pension expenditure has increased by 163 percent from INR 45,500 crore to INR 119,696 crore. In comparison, the MoD’s overall expenditure has risen by a far lower 107 percent.

There are several reasons for the hefty increase in defence pension. These include periodic upward revision of pensionary benefits due to the implementation of recommendations of successive pay commissions, and the introduction of the One Rank One Pension (OROP).^[c] The biggest factor, however, is the change in the colour service brought about in the 1960s and 1970s, which has led to a quantum jump in the number of pensioners and overall pension expenditure.

Prior to 1965, the minimum engagement period for army personnel in the general duty category (of infantry, armoured corps, and artillery) was only seven years.^[12] The pensionable service being 15 years, and the colour service a mere seven, about 65 percent soldiers were retiring without a pension.^[13] In two successive changes—one in January 1965 and the other in February 1976—the colour service was increased to 17 years. With the minimum reckonable pensionable service remaining unchanged at 15 years, it led to almost 100 percent of retirees being eligible for pension. Thus, the number of military pensioners, which stood at 380,000 in 1950 and 600,000 in 1970, climbed to 2,680,000 in 2021 (see Table 1). With nearly two pensioners for every serving personnel and one-fourth of the MoD’s budget being devoted to retirement benefits, even the critics of Agnipath acknowledge the problem in the growing defence pension budget.^[14]

Table 1: Growth of Defence Pensioners

The financial burden is not the only problem created by the enhanced colour service of 17 years. It also caused the Indian military to shed some of its youthfulness. In 1992-93, submitting before the Estimates Committee of the 10^th Lok Sabha, the government had confirmed that the increase in the number of years of colour service had raised the average age to 35 years for the other ranks (ORs) and 40 years for the battalion commanders.^[15] With such an aged profile, the Indian armed forces, particularly the army, stood out as an outlier in comparison to armies in different parts of the world. Writing in 2000, defence and security expert Jasjit Singh noted that with an average age of 37 years, the Indian army was far older than its counterparts of the North Atlantic Treaty Organisation (NATO) (24 years), China (about 25 years) and Pakistan (25 years).^[16]

Given the adverse effects of the enhanced colour service, the need for a new personnel policy was seen as early as in the 1980s. An expert committee headed by Lt Gen. K. Balaram, then Vice Chief of the Indian Army, had observed in 1985 that the terms of engagement were the “least cost-effective among many options that could be considered.”^[17] Indeed, by the early 1990s, the Indian army was at an advanced stage of revising the colour service. The MoD had confirmed to the 10^th Lok Sabha’s Estimates Committee that “as far as the Army colour service is concerned, we are any time awaiting the recommendation of the Chief of Army Staff. We have done a great deal of work. We referred it to the Chief of Army Staff. We are awaiting his recommendation any time now.”^[18]

The need to reduce the colour service became even more pressing with the realisation that the loss of youthfulness was adversely impacting combat effectiveness. An analysis of the performance of the Indian peacekeeping force (IPKF) in Sri Lanka (1987-90) concluded that “wherever there was a younger age group in a unit, it did better than the others.”^[19] Regrettably, despite the problems being long known, and the army and the MoD having some sort of plan to address them, it has taken more than 30 years to undo what was clearly a decision “imposed for short-term gains in manpower management in the 1960s and 1970s.”^[20]

How Many Agniveers?

The government plans to recruit 46,000 Agniveers in 2022, of which 40,000 will be inducted into the Army and 3,000 each into the Navy and Air Force.^[21]  Recruitment will grow in the coming years. Lt General B. S. Raju, Vice Chief of the Army, has said that its intake of Agniveers will increase to “1.2 lakh by the seventh or eighth year, and then 1.6 lakh by the 10^th or 11^th year.”^[22] He further noted that with increased induction of Agniveers, the Indian army was eventually looking at a ratio of 50:50 of regulars and Agniveers. Similarly, the Air Force and Navy are also expected to increase the pace of recruitment of Agniveers, although there is so far no indication of how many Agniveers will be inducted per year.

No doubt the progressive increase in the intake of Agniveers will steadily change the composition of the Other Ranks in the armed forces in favour of Agniveers. However, details of how this will change by year are not available. The Army Vice Chief’s statement on induction does not clarify whether the induction rate is intended to maintain the current strength of ORs or how the 50:50 ratio will be achieved and if it can be sustained.

To overcome the information gap, an attempt has been made in Annexure 1 to estimate the number of Agniveers the armed forces would need to induct in the next two decades or so—by which time all the current regular troops (recruited as per the earlier policy) would have retired. The estimate is based on two key assumptions: that the number of ORs will remain constant at 13.35 lakh (the current strength of ORs)^[23] through the projection period; and that the current lot of ORs will retire at the present rate of about 60,000 per year.

Based on these assumptions, by 2044, ORs will consist entirely of Agniveers, and Agniveers-turned regulars. Assuming that the government fills all the posts vacated by the erstwhile regulars, the initial recruitment of 60,000 Agniveers in the first year will have to be progressively increased to a peak of 118,125 by the 21st year. By the end of the 23rd year, the forces would have inducted 2,244,375 Agniveers, and 1,364,063 Agniveers would have been demobilised. Agniveers would make up 50 percent of the total of ORs by the 15th year and their representation will continue to grow for the rest of the period, reaching 66 percent by the time all the current regulars have retired.

Agnipath Savings

It is worth estimating the savings (based on the projections made in Annexure 1) that will accrue on both defence salaries and pensions following the implementation of the Agnipath scheme. The monthly average salary of an Agniveer (including the 30-percent contribution from the government towards the seva nidhi package) will be INR 45,338. This is nearly 24-percent lower than the average monthly pay of INR 59,976^[d] of a current OR. This means an Agniveer would cost the government INR 175,656 less than a current OR every year. Assuming 60,000 Agniveers are inducted in the first year, the total saving on salaries would amount to INR 1,054 crore, which would increase with the progressive rise in induction of Agniveers (see Figure 2). The savings will, however, need to be viewed against the additional expenditure the armed forces will have to incur—on infrastructure, trainers, and training aids such as simulators—to train a relatively larger number of Agniveers.

Figure 2: Potential Savings on Salaries Resulting from Agnipath

On pensions, however, there will be no savings in the near to medium term. The number of pensioners will keep increasing till all the current ORs retire by the year 2044. It is only after 2044 that the number of pensioners (all recruited through the earlier scheme) will start declining, as the number of new retirees from the Agniveer-turned regular cadre, who will join the pension club, will be less than the number of aging veterans and family pensioners who would exit due to the natural process of death.

It is, however, important to underscore that in the absence of Agnipath, the number of pensioners would have continued to swell without any break. The financial advantage is that compared to the earlier system, under which all serving ORs were entitled to pension after retirement, the benefit will be extended to only a few. By 2044, when the entire contingent of ORs will consist of Agniveers and Agniveers-turned regulars, only 454,688 (34 percent) of 1.33 million ORs will be entitled to pension after retirement. This will lead to significant savings.

Concerns over Agnipath

Following the announcement of Agnipath, armed forces veterans and others have raised a number of concerns.^[24] They pertain to the scheme’s timing, the attractiveness of military service as a result of it, the societal effect of the demobilised Agniveers, and the programme’s impact on the “ethos, values, beliefs and combat effectiveness” of the armed forces. The government has defended the scheme, claiming that it was finalised only after detailed discussions involving the services, the MoD, and other government agencies across more than 250 meetings worth 750 hours.^[25]

There is no gain saying that, like any other radical reform, Agnipath will face teething problems in the initial years. However, some of the concerns that are being expressed appear to be disconnected from both past efforts to reform colour service, and current ground realities. It is an unfounded fear, for instance, that Agnipath will lead to talent turning away from the armed forces to other security sectors. As the initial response to the Agnipath advertisement showed, the enthusiasm of applicants remains intact. In response to 3,000 vacancies advertised by the Air Force under the new scheme, it received 749,899 registrations (or 250 for each post)—an all-time high in comparison to any past recruitment cycle.^[26]

The Issue of Demobilisation

One of the concerns raised of the Agnipath scheme pertains to future career prospects of those who will be demobilised eventually. It has been argued that Agniveers who do not find a place in the regular cadre will leave the military dejected and could be a potential nuisance for society, given their exposure to the use of arms. The Centre, and certain state governments, have announced job reservations and other incentives for the demobilised Agniveers (see Table 2). The Ministry of Home Affairs and the MoD, for instance, have announced 10-percent reservation in a number of their organisations for Agniveers, which together have a cadre strength of over 19 lakh (see Table 3). This may not be adequate to absorb all the demobilised Agniveers, but along with the jobs reserved by state governments would provide reasonable scope for those who would be needing a job after their military service.

Table 2: Jobs and Other Incentives for Agniveers Exiting after Four Years

Table 3: Strengths of Organisations

Critics, however, have dismissed the government’s job reservations, arguing that previous reservations for ex-servicemen (ESMs) have remained grossly underutilised.^[27] Indeed, as of June 2021, against a total of over 32 lakh vacancies reserved for ESMs, only 80,135 (or 2.49 percent) posts have been filled (see Table 4). However, absorption of Agniveers can hardly be compared with the under-utilisation of the job quota by ESMs. The principal reason for ESMs not filling up posts reserved for them is their lack of interest,^[e] largely because of their late exit from the services and the availability of a guaranteed life-long pension, both of which would not be applicable in the case of Agniveers. With the vast segment of Agniveers exiting the military at a much younger age (between 21.5 and 25 years), they will have both age and motivation on their side to seek a job in other sectors. 

Table 4: Re-employment of Ex-Service Personnel Against Job Reservations *

Need for a Scheme for Officers

While the government has announced the Agnipath scheme to reform the recruitment of ORs, no such programme has been promulgated yet for the officer cadre. Given its current size, age profile and pyramidical structure, the officer cadre is equally ripe for reform. As Figure 3 shows, the number of officers in the three forces has grown since the late 1950s, with the increase since 2007 amounting to over 22 percent.

Figure 3: Officer Cadre of the Indian Armed Forces, 1957-2022

Beyond the numbers, what is important to note is that because of the stiff, pyramidical structure of the armed forces, progressively fewer posts are available at higher ranks, with all the top posts (of Colonel and above) being filled only on the basis of vacancies.^[f] In 2021-22, out of a sanctioned strength of 75,630 officers (excluding 10,170 officers in the army medical, dental and nursing services), only 9,923 were of Colonel (or its equivalent) and higher ranks (see Figure 4).^[g] It is this category of officers who handle the crucial command and other important assignments that are vital for the country’s defence preparedness. However, since very few from each rank can be promoted to the next higher rank, many officers are superseded and their career stagnates. A superseded officer with little further growth prospects can hardly be an asset to any organisation, let alone the military, which demands agility, dynamism, and leadership from every officer. Since there is no attractive ‘golden handshake’ to send a superseded officer home, they continue to serve till retirement, thereby affecting the average age profile of their rank.

Figure 4: Pyramidical Structure of the Sanctioned Officer Cadre of Indian Armed Forces

The A. V. Singh Committee, set up by the government in 2001 to address this stagnation in the higher ranks and improve the age profile of the officer cadre, had suggested a number of far-reaching measures. A key suggestion was to induct more officers through the Short Service Commission (SSC), who would make up nearly 50 percent of the total officer cadre. However, the scheme has been diluted over the years, first by not implementing the recommended ‘golden handshake’ package to encourage early departure, and then by granting the court-directed permanent commission to most SSC officers, thus negating the very purpose of the committee’s recommendation. Given that young, dynamic officers are as important as young ORs, it is imperative for the government to reform the officer cadre.

Conclusion

The Agnipath scheme is a radical initiative to reform the recruitment of troops into the armed forces. Though the official explanation for the scheme is to make the forces younger and more tech-savvy, it is equally driven by a strong financial motive: to arrest the rising personnel cost of the defence services. While the scheme is not driven by short-term financial gains as crucial savings will accrue only in the long-term, the long gestation of the reform does not mean it is unnecessary. Without drastic personnel reform, the defence budget, which is already personnel-heavy, would have become unsustainable to fund essential future procurement, equipment maintenance, and R&D—all of which are vital for the country’s defence preparedness.

Given the radical nature of the reform, the scheme has drawn criticism. The critics, however, seem to be oblivious to the recruitment policy prior to 1965, the government’s efforts to reduce the colour service since the 1980s, and the current ground reality. It is an irony that such a vital piece of reform, whose need has been repeatedly emphasised by various experts and government-appointed committees, had to wait long to be implemented. Having announced the scheme to reform the recruitment of ORs, the government now needs to institute similar reforms in the officer cadre.

Annexure-I

The Likely Impact of Agnipath

* Required intake of Agniveers is based on the total sanctioned strength of ORs (13.35 lakh for all years) minus the existing strength. Existing strength in any given year = Remaining erstwhile ORs in that year + Cumulative strength of Agniveers of previous year + No. of Agniveers converted into Regulars in that year­­ – No. of Agniveers demobilised in that year.

Endnotes

^[a]The upper age limit has however been extended by two years to 23 years as one-time waiver for the recruitment in 2022. See.

^[b] The Seva Nidhi package of the Agniveers who would be enrolled into the regular cadre would exclude the government contribution.

^[c]The financial impact of the OROP in the first six years has been about Rs. 42,740 crore, or about Rs 7,123 core per year. See PIB, “One Rank One Pension: Fulfilling Long Standing Demand of Defence Pensioners”, p. 10. https://static.pib.gov.in/WriteReadData/specificdocs/documents/2022/apr/doc202242145601.pdf

^[d]The average salary of an OR is calculated based on the average 2021-22 salary.

^[e]There are two other reasons why ESM do not fill up reserved posts. According to Directorate General Resettlement (DGR), “adequate number of ESM are not qualifying for these posts and the DOPT order dated 12 Feb 1986 regarding relaxed standards of selection no being implemented by Organizations.” See DGR, “DGR Yearly Newsletter”, 2021.

^[f]After the implementation of the AV Singh Committee, officers of the armed forces are promoted till rank of Lt Col on time-scale basis. Some superseded Lt Cols are promoted to Colonel rank after 26 years of service.

^[g]For a review of different categories of defence personnel funded by the Indian MoD, see Laxman Kumar Behera and Vinay Kaushal, “Estimating India’s Defence Manpower”, MP-IDSA Issue Brief, August 04, 2020.

^[1] Press Information Bureau (PIB), “In a transformative reform, Cabinet clears ‘AGNIPATH’ scheme for recruitment of youth in the Armed Forces”, June 14, 2022.

^[2] “‘Agnipath’ scheme: Violence, arson in states; govt defends scheme, faces opposition ire”, The Week, June 16, 2022.

^[3] “No question of rollback of Agnipath scheme, government’s move not a knee-jerk reaction, says NSA Doval”, The Economic Times, June 21, 2022.

^[4] Deependra Singh Hooda, “The Agnipath Scheme: Analysis and a Way Forward”, DPG Policy Brief, Vol. VII, Issue 28, June 24, 2022.

^[5]Indian Army, “Recruitment Rally Notification”, https://joinindianarmy.nic.in/writereaddata/Portal/Notification/863_1_AGNIVEER_RALLY_NOTIFICATION.pdf.

^[6]Ministry of Defence, “Agnipath”, https://static.mygov.in/rest/s3fs-public/mygov_165537923351307401.pdf.

^[7] Laxman Kumar Behera and Vinay Kaushal, “Defence Pension Reforms: Recommendations of the past Committees and Commissions,” MP-IDSA Special Feature, February 28, 2020, https://idsa.in/system/files/comments/Defence-lbehera-vinay-280220_com_n.pdf.

^[8]PIB, “Media Conference on ‘Agnipath Scheme’ by Defence Officials”, (Webcast Videos), June 2022, https://pib.gov.in/WebcastMore.aspx.

^[9]PIB, “Press Briefing by Union Defence Minister Rajnath Singh (Webcast Videos), June 2022, https://pib.gov.in/WebcastMore.aspx.

^[10]Laxman Kumar Behera, “India’s Defence Budget 2020-21”, IDSA Issue Brief, February 04, 2020, https://idsa.in/system/files/issuebrief/def-bgt-2020-21-040220.pdf.

^[11]Standing Committee on Defence, 17th Lok Sabha, Demands for Grants 2022-23, 26th Report, p. 146.

^[12]Jasjit Singh, Defence Spending: Assessing Future Needs, 2nd Edition (New Delhi: Knowledge World, 2000), p. 105.

^[13]Jasjit Singh, Defence Spending: Assessing Future Needs, p. 105.

^[14]P. Chidambaram, “Penny Wise Security Foolish”, The Indian Express, June 26, 2022, https://indianexpress.com/article/opinion/columns/penny-wise-security-foolish-7991566/

^[15] Estimates Committee, 10th Lok Sabha, “Defence Force Levels, Manpower, Management and Policy”, August 1992, 19th Report, p. 60.

^[16]Jasjit Singh, Defence Spending: Assessing Future Needs, p. 105

^[17]Jasjit Singh, Defence Spending: Assessing Future Needs, p. 103.

^[18] Estimates Committee, 10th Lok Sabha, “Defence Force Levels, Manpower, Management and Policy”, p. 60.

^[19] Estimates Committee, 10th Lok Sabha, “Defence Force Levels, Manpower, Management and Policy”, p. 60.

^[20]Jasjit Singh, Defence Spending: Assessing Future Needs, p. 102.

^[21]Rajat Pandit, “Agniveers will be 50% of Army by 2032: Vice-chief Lt-General BS Raju”, The Time of India, June 16, 2022, https://timesofindia.indiatimes.com/india/agniveers-will-be-50-of-army-by-2032-vice-chief-lt-general-bs-raju/articleshow/92239322.cms#:~:text=NEW%20DELHI%3A%20’Agniveers’%20will,ground%20experience%20and%20operational%20necessities.

^[22]Rajat Pandit, “Agniveers will be 50% of Army by 2032: Vice-chief Lt-General BS Raju.”

^[23]Lok Sabha, “Recruitment in Defence Forces”, Unstarred Question No. 4929, Answered on April 01, 2022.

^[24]P R Shankar, “Agnipath: Operational Challenges”, Financial Express, June 17, 2022, https://www.financialexpress.com/defence/agnipath-operational-challenges/2564010/; Vinod Bhatia, “Path of Peril”, The Telegraph, June 26, 2022, https://www.telegraphindia.com/culture/indias-former-dgmo-lt-gen-r-vinod-bhatia-argues-that-the-new-agnipath-scheme-of-the-armed-forces-would-adversely-alter-their-dna/cid/1871886; Arun Prakash, “Agnipath, between the Lines”, The Indian Express, June 21, 2022, https://indianexpress.com/article/opinion/columns/agnipath-scheme-armed-forces-protests-7979936/; Sushant Singh, “Agnipath, a fire that could singe India”, The Hindu, June 18, 2022, https://www.thehindu.com/opinion/lead/agnipath-a-fire-that-could-singe-india/article65537694.ece; Ravi Dastane, “Agnipath and the Department of Military Affairs: Time to rethink the path we are taking”, The Wire, July 06, 2022, https://thewire.in/security/agnipath-scheme-undesired-results.

^[25]PIB, “Media Conference on ‘Agnipath Scheme’ by Defence Officials”, (Webcast Videos), June 2022, https://pib.gov.in/WebcastMore.aspx

^[26]Indian Air Force (@IAF_MCC), “The online registration process conducted…,” Twitter, July 05, 2022, https://twitter.com/IAF_MCC/status/1544341510757396482

^[27]P. Chidambaram, “Penny Wise Security Foolish”

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