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Mint
26-05-2025
- Business
- Mint
Life of a soldier: A secure job, but financial literacy lags
'As a young officer, personal finances were never top of mind," recalls Colonel Ajit Kumar Singh Chauhan, a 63-year-old Indian Army veteran. 'Juggling duties, official commitments, physical training, games with troops and mandatory evening parties there was hardly any time to focus on financials." Financial awareness has always been low in the army and seniors hardly discussed money or investments, he added. Chauhan's views reflect a broader pattern among defence personnel in the Army, Air Force, and Navy, where financial awareness has traditionally been low. 'Financial ignorance and lack of time combined, saving in provident fund (called Defence Service Officers Provident Fund or DSOP) was an end in itself during my service years." DSOP is the provident fund scheme for defence personnel that requires a mandatory minimum contribution of 6%, with no employer contribution. Its current interest rate is 7.1%. However, Chauhan's story has a positive ending. Now retired in Bareilly, he lives comfortably on a military pension and systematic withdrawal plan from his mutual fund (MF) portfolio. 'I started SIPs in 2004 after learning about MFs. On retiring at 54 in 2016, I invested my entire corpus in equity funds and have averaged over 15% annual return." A stable pension to fall back on allowed him to take market risks. Rising salaries, but frugality remains Salaries in the armed forces have considerably improved after the Sixth Pay Commission (2006) and the Seventh Pay Commission (2016). Before that, the salaries were barely enough to keep heads above water, Chauhan recalled. Before the Sixth Pay Commission, Chauhan, with two daughters and 23 years into the service, was earning merely ₹26,500. 'Had my wife not been working, making ends meet would have been a tall order. Back then, it was routine for defence officers posted in Delhi-NCR to dip into their provident funds to complement the salary," he said. 'My salary under the sixth Pay commission rose to about ₹80,000 and provided financial stability." Currently, a colonel in the Army after 15-25 years of service and corresponding rank officers in Navy and Air Force get an average gross salary of about ₹2.3 lakh. Starting gross salaries for defence officers are about ₹1.1 lakh, while for other rank (OR) soldiers, salaries start from ₹40,000 and go up to ₹1.1 lakh across different ranks. These salary figures can increase by 10-40% based on HRA and other additional allowances that are granted during field postings in combat zones. Abraham Cherian, a retired Army officer who is now a Sebi-registered investment advisor (RIA), says defence personnel lead a frugal lifestyle due to relatively low salaries and even lower cost of living. 'A colonel after 18-20 years of service will earn the same post-tax salary that someone with 10 years of service in the private sector earns. So, they are used to spending less. Moreover, these men and their families mostly live in smaller cities, so aspirational lifestyle expenses are also low," said Cherian, founder of 360° wealth advice. In addition, there are other financial benefits like free of cost medical services, which also covers dependent parents, subsidised school fees and accommodation, life insurance coverage and discounted FMCG goods, electronics and vehicles through canteen. Armed forces insurance coverage, especially, is a crucial benefit as defence personnel don't easily get term insurance that covers operational hazards. Even if they are eligible, the premiums are 50-100% more expensive. At monthly premiums of ₹5,000-15,000, the armed forces insurance provides coverage against death and disability, no questions asked. These benefits provide a financially comfortable life to serving personnel. Karan Kalra is a retired officer from the Navy working in the cybersecurity industry post retirement for a higher absolute salary. He says earnings can't be compared. 'As it is said, defence forces are not a job but a way of life. The pay is indeed better in the private sector, but defence forces provide a good standard and quality of life," said the 35-year-old. Despite the inherent dangers of operational deployments, serving and retired personnel say financial worries rarely cross their minds during action. 'The mindset is very different," says Lt Col T.S. Anand (retd). 'In training, we are broken down and rebuilt to focus on fighting under overwhelming odds. In an operational area, you are constantly processing mission-critical information—there's no room to think about personal finances." 'The government extends support in the form of lump-sum payments, pensions and accommodation provisions to widows of armed forces personnel. This financial security gives us inherent strength to discharge our duties and not worry about the financial future of the family," said Chauhan, who has spent one-third of his service in combat zones. Also Read: Fund houses suggest these four tweaks to make mutual funds even more sahi Secure but early retirement Permanent commission officers enjoy significant financial security through pensions and medical benefits post-retirement. A one-time premium of ₹30,000-1.2 lakh secures lifetime medical cover. Officers receive a retirement corpus comprising DSOP funds, gratuity, insurance payouts, leave encashment, and commuted pension, which means upto 50% of the monthly pension is paid out as a lump sum on retirement. Officers typically receive ₹1.2–2 crore on retirement, while soldiers get ₹50–80 lakh, depending on rank and service withdrawals. However, this cushion must last long since military retirement comes much earlier than in civilian careers. 'Defined pensions and lifetime medical care shifts retirement planning focus from basic sustenance to lifestyle sustenance," said Sanjeev Govila, a retired colonel in the Army and Certified Financial Planner, CEO, Hum Fauji Initiatives, an RIA. Officers and jawans typically retire between the ages of 35 and 54. 'This necessitates alternative career planning and bridging income gaps until civilian employment begins. Early retirement also means they have to fund major life events like buying a house, children's higher education and marriage after their regular service income ceases," said Govila. Retired group captain Sudhir Nasiar took up a job with the Haryana government after his retirement from the Air Force in 2017 at 49 years of age to supplement his pension. 'After retiring, defence personnel still have 10 to 25 years left to work. While pension takes care of the basic necessities, additional income from either investments or additional work helps in maintaining a good quality of life," he said. This is especially crucial for ORs who retire in their late-30s to mid-40s and often underestimate future expenses like children's education or marriage. 'Soldiers don't plan well thinking pension and retirement corpus will sustain them for life, but it's a wrong approach. It can fall short if one retires in a city and while expenses of children's education and marriage are still pending," Anand said. The biggest challenge is faced by short service commission (SSC) officers who complete service in 10-14 years and don't get pension (except disability pension, if applicable) or medical benefits after retirement. They have the option for permanent commission after 14 years, but barely 30% are made permanent. Kalra, who retired as an SSC officer at 33 years of age, knew this well and made sure to prepare for the career transition. 'I started building skills and getting shorter duration certifications which could be undertaken with work," he said. 'The DSOP, NGIF (Naval Group Insurance Fund), and gratuity did give me a financial cushion, but even the combined corpus was not enough as the responsibilities for people in my age group keeps increasing with growing children and ageing parents." Around 1,000 retired SSC officers across the three armed forces are pursuing a legal case in the apex court demanding pro-rata pension and medical benefits post retirement on the premise that they perform similar duties and face equal risk as permanent commission officers. Lack of financial awareness and miss-selling Veterans who are now working as financial advisors and conduct financial planning seminars for armed forces personnel say financial awareness continues to be low. 'Social norms discourage financial discussions. Combined with a lack of financial education, this can lead to over-reliance on safe, low-return instruments," said Govila. Anand said, while appetite for stock markets, MFs is taking off, preference for traditional investment tools like land, bank deposits, insurance cum savings plans and provident fund continues to be the preferred route. 'In the private sector, people are better financially educated as they don't have job security or pension, so they have to proactively plan. Also, there is higher disposable income and access to a financially aware peer circle," said Kalra who has worked in both the armed forces and the private sector. Lack of accessibility to quality financial advice compounds the issue. Retired colonel Sumesh Seth, who conducts financial awareness seminars for armed forces personnel, said banks and insurance agents are often the only ones offering advice as they have access to cantonments. 'Both of them are driven by commissions and mis-sell traditional insurance plans promising assured returns." Exposure to the internet and social media for financial advice with limited financial literacy is a new risk. Serving personnel often fall prey to risky trading and personal loans. 'There is a concerning trend of both soldiers and officers taking to trading and futures & options (F&O) and racking up huge losses. They are also piling up EMIs for every small purchase because personal loans are easily accessible," said Anand. Also Read: How to combat misselling in life insurance
The Hindu
09-05-2025
- Business
- The Hindu
Fees for govt. quota seats in engineering and architecture courses in private unaided colleges up by 7.5%
Fees for government quota seats in engineering and architecture courses in private unaided technical educational institutions will go up by 7.5% for the academic year 2025-26. The decision was taken at a fee fixation meeting, chaired by M.C. Sudhakar, Minister for Higher and Education, with representatives of private professional college managements, including Karnataka Unaided Private Engineering Colleges Association (KUPECA), and other technical educational institutions and office bearers, on Friday. Private technical educational institutions had demanded 15% to 20% fee hike, to which the government said it could be between 7% and 8%. Though the association representatives tried to convince the Minister citing pay hike, infrastructure improvement expenditure, maintenance and quality, Dr. Sudhakar was firm in his decision. After a long discussion, a consensus was finally reached to increase the fee by 7.5% on last year's fee. Speaking to The Hindu, Dr. Sudhakar said, 'Private college managements have been demanding 15% to 20% fee hike to pay salaries to the teaching and non-teaching staff as per the Seventh Pay Commission and develop infrastructure and others. However, last year too, a 10% fee hike was allowed. Therefore, this time, 7.5% fee hike has been allowed so as not to burden students, and the managements have agreed to this.' With the 7.5% hike, without university registration and other processing fee, the fee will be ₹1,14,199 for CET seats (government quota) in type-1 private colleges. In COMED-K type-1 colleges, it will be ₹2,00,070 and ₹2,81,088 in type-2 colleges. However, the fees in government and aided engineering colleges will remain the same as that of last year. In 2024-25, the fee for government quota seats in private engineering colleges was ₹1,06,231. In COMED-K type-1 college it was ₹ 1,86,111 and ₹2,61,477 for type-2 colleges.
Time of India
29-04-2025
- Business
- Time of India
Cabinet clears DA hike, eases transfer norms for govt staff
Bhopal: The state cabinet, chaired by CM Mohan Yadav, on Monday announced a relaxation in transfer rules, and approved a hike in dearness allowance (DA) for govt employees. Briefing reporters after the meeting, urban administration minister Kailash Vijayvargiya said DA for employees drawing salaries under the Seventh Pay Commission scale will rise by 3% from July 1, 2024, and by a further 2% from Jan 1, taking the total to 55%. This brings Madhya Pradesh in line with the DA rates of central government employees. The move will add an estimated burden of Rs 3,500 crore to the state exchequer, including arrears. The finance dept has also been authorised to revise DA for employees under the Sixth, Fifth, and Fourth Pay Commissions, including those on deputation from boards and corporations. In another key decision, the cabinet approved the Transfer Policy for 2025, allowing movement of officials at state and district levels during a window from May 1 to May 30. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Brinklow: Born Between 1940-1975 You May Be Eligible For This Life Cover Reassured Get Quote Undo A state govt release said, "The policy outlines that, within each post or cadre, both administrative and voluntary transfers—whether during the ban period or the relaxation window—can be carried out up to a specified percentage annually. Transfers may be made for up to 20% of positions in cadres with up to 200 posts, 15% for cadres with 201 to 1000 posts, 10% for those with 1001 to 2000 posts, and 5% for cadres with more than 2001 posts. All transfers will be processed through the e-office system. Additionally, departments are permitted to formulate their own internal transfer policies in alignment with these guidelines." Besides, the cabinet approved the establishment of a 2000 MW solar park along with a 1000 MW composite energy storage project in the state. This initiative aims to supply electricity on a complimentary basis to both Madhya Pradesh and Uttar Pradesh, as the peak demand periods of the two states occur at different times of the year. "Under this arrangement, the project will provide power to each state for six months annually, ensuring efficient utilization of resources and enhanced energy security for both regions," the release stated. Vijayvargiya said in Madhya Pradesh, the agricultural sector accounts for approximately 41% of the state's total electricity consumption. Due to the climatic conditions, electricity demand for agriculture peaks between October and March, primarily for Rabi crop cultivation. "Our demand for energy drops during the monsoons while in Uttar Pradesh energy consumption is higher during the Kharif season," he said. "Conversely, during the Rabi season — when Madhya Pradesh's demand peaks — Uttar Pradesh's requirement declines. This complementary pattern offers an opportunity for efficient energy distribution between the two states," the minister said. In a separate move, a committee headed by additional chief secretary Ashok Barnwal was constituted to oversee implementation of the Unified Pension Scheme for govt employees appointed after Jan 1, 2005.
Hindustan Times
29-04-2025
- Business
- Hindustan Times
Ludhiana: Panjab University directs affiliated colleges to implement revised pay rules
Cracking down on non-compliant colleges, Panjab University (PU) has directed all its affiliated institutions to immediately implement revised pay scales for teachers working on unaided or self-financed posts. The university warned that disciplinary action would be taken against colleges that continue to defy its orders. In a letter issued on Monday, the dean of the college development council (DCDC) stated that multiple complaints have been received from teaching staff and associations representing teachers of affiliated colleges, requesting the university's intervention to ensure compliance with the University Grants Commission (UGC) revised pay scales and deduction of provident fund (PF) as per the regulation. The letter noted that despite repeated communications issued by the university over time, many colleges have still not extended the benefit of revised pay scales to their faculty members. The letter also stressed that colleges must maintain the PF accounts of teachers according to the rules in the Panjab University calendar, which mandate deductions based on gross salary, not basic salary. Teacher associations across the city welcomed the university's strong stand. Raman Sharma, Panjab University area secretary, The Punjab and Chandigarh College Teachers' Union (PCCTU), said that some managements, including prominent ones like DAV and a few others, have been repeatedly flouting rules. 'The university had earlier issued directions for compliance with the Seventh Pay Commission scales and PF regulations. After several complaints, the university has now reminded the colleges again,' he said. Tarun Ghai, spokesperson for the Association of United College Teachers (AUCT), also welcomed the move. He warned that if the colleges fail to pay teachers as per the revised scales by May, AUCT members would launch protests outside the defaulting ones and seek the cancellation of their affiliation with Panjab University.
Hindustan Times
25-04-2025
- Politics
- Hindustan Times
Yogi Adityanath proposes committee for madrasa education reform
In a strong push for reforms in Uttar Pradesh's madrasa education system, chief minister Yogi Adityanath highlighted the need for strict compliance with infrastructural standards before granting official recognition to any madrasa in the state. He also proposed forming a committee under the chairmanship of the director of minority welfare, Uttar Pradesh, to recommend necessary reforms for the smooth functioning of madrasas, job security for teachers, and a better future for the students. Chairing a high-level meeting on Friday to review the current state of madrasa education, the chief minister underlined the importance of ensuring that madrasas do not remain limited to religious teachings alone. 'Students studying in madrasas should have access to the full spectrum of modern education,' Yogi Adityanath said. 'There's a need to bring changes in the madrasa curriculum in line with the New Education Policy 2020. It is also necessary to update the eligibility criteria for teachers and non-teaching staff in accordance with the curriculum. The teacher selection process must be made fair and transparent. The current system of appointing teachers in madrasas also needs to be reviewed,' he added. In this regard, the chief minister proposed a committee which will include special secretaries from the basic education, secondary education, finance, law, and minority welfare departments. He pointed out the challenges that have emerged following the Supreme Court's declaration of the Kamil (graduate) and Fazil (postgraduate) degrees of the Madrasa Board as unconstitutional. He stressed on aligning the recognition standards and requirements of madrasas with those of regular schools managed by the education department. Earlier in the meeting, the minority welfare and waqf department gave a detailed presentation about the current status of madrasas, the main challenges they face and their plans. The chief minister was informed that there are currently 13,329 recognised madrasas in the state, where 12,35,400 students are studying. Out of these, 9,979 madrasas are at the primary and upper primary levels (Classes 1 to 8), and 3,350 are at the secondary and higher secondary levels (Classes 9 to 12). Among them, 561 madrasas receive government grants and they have 2,31,806 registered students. These grant-aided madrasas have 9,889 teachers and 8,367 non-teaching staff, all of whom have been receiving salaries and allowances as per the Seventh Pay Commission's recommendations since January 1, 2016. The chief minister was informed that the Madrasa Portal was launched in August 2017, which made all the functions of the Madrasa Education Council online. A total of 19,123 madrasas registered on the portal, out of which 13,329 have been verified and locked. Through this portal, systems like online exams, certificates, verification, and integration with the U-DISE code have been implemented, ensuring transparency and accountability. However, the number of students appearing in board exams has steadily declined over the years. In 2016, 4,22,627 students appeared, but by 2025, this number dropped to only 88,082. The chief minister called this a serious concern and said that there is a need for improvement. Officials also said that the Madrasa Education Council now conducts exams only at the Maulvi/Munshi (secondary) and Alim (senior secondary) levels. To improve the quality of education, the SCERT curriculum has been implemented and fully enforced from the academic year 2025–26. Efforts are also underway to align the curriculum for Classes 9 to 12 with the State Secondary Education Council. The curriculum now includes not only religious subjects like theology, Arabic, and Persian, but also modern subjects such as mathematics, science, social science, Hindi and English.
