Finance Minister P Chidambaram announced a 10 per cent hike in the defence budget while delivering his interim budget speech today. Rs. 500 crore of the budget would be allocated for implementing the 'one rank, one pension' rule, Mr Chidambaram said.
The "one rank, one pension" rule means that retired soldiers of the same rank and length of service will receive the same pension, regardless of when they retire. Currently, pensioners who retired before 2006 draw less pension than their counterparts and even their juniors.
Defence personnel have been fighting for the 'one rank, one pension' rule for years. Mr Chidambaram's announcement is likely to win the Congress the support of lakhs of soldiers ahead of the polls, due by May.
There are 14 lakh serving and 24 lakh retired military personnel in the country.