The annual expenditure on the 'One Rank One Pension' (OROP) scheme has been estimated at around Rs 7,500 crore, the defence ministry said on Wednesday.
The arrears from July 1, 2014 -- the date of implementation as announced by the government—till December 31, 2015, will be approximately Rs 10,900 crore, the ministry said in a statement.
This is set to push the defence budget for pensions, which is estimated to go up from Rs 54,000 crore as per Budget estimates of 2015-16 to around Rs 65,000 crore, the proposed Budget estimate for 2016-17.
This is an increase of about 20 per cent of the defence pension outlay.
The statement said 86 per cent of the total expenditure on account of OROP will benefit Junior Commissioned Officers (JCOs) and other ranks.
"The government of India had taken the historic decision to implement OROP in November 2015. This fulfilled the long standing demand of the defence forces personnel after 42 years benefited over 18 lakh ex-servicemen and war widows," the statement said.
Payment of arrears and revision of pension under OROP is to be made by the Pension Disbursing Authorities in four instalments, except for family pensioners and pensioners in receipt of gallantry awards who will be paid arrears in one instalment.
Asked about the development, Indian Ex-Servicemen Movement spokesperson Col. Anil Kaul (retd) said it "seemed ok", but they would be studying it and come out with a detailed reaction later.
"We are still studying it. It seems ok... so far it seems to be almost there, except that they are paying out from July (2014) not April," Col. Kaul said.