Defence Services – Rewards and Financial Ecosystem .

The Rising India Party takes the position that the Indian Defense Services need to be placed in the mind-space of the country and its citizens as the most preeminent of all government or public services. A service that the citizens of India would line up to join as a privilege and great honor at all levels, the front-line soldier to officer cadre induction to the back-end support service roles. These men and women join for safeguarding the country against all kinds of threats, external and internal, and undertake to give their lives in the defense of its citizens and nation.

Such a service, by definition, must have place of privilege and pre-eminence in the life and mind of the nation. They need to be assured that a grateful nation would always, without hesitation, look after their interests and those of their families, especially if they are martyred in the line of duty.

For such a narrative to emerge, a new support and financial security umbrella for the family in case of martyred personnel, paradigm needs to be brought into focus and reality; one that evolves to be self-financing within the armed forces to the extent possible.

The Rising India Party proposes the following core principles for the nation’s public to consider and improve upon in order to firm up the functional mode:

  1. The Government would move to set up a financial system that would allow the Defense Forces to run their own financial affairs and to have the ability to generate funds and surpluses within their financial architecture.
  2. A core move would be for the government to set up a “Defense Services Bank” (DSB), perhaps named “Desh Sevak Bank”, (DSB) or another suitable name.
  3. The Bank would function as normal bank with the core difference that it would be set up as a Defense services bank and be manned by a combination of retired defense personnel and civil employees.
  4. The bank would become the medium through which all defense forces salaries and pensions are paid.
  5. They would have their own savings accounts, Fixed deposits etc and would make investments in giving loans etc.
  6. Branches would be opened within all cantonments and where so ever he forces are deployed; in the case of forward border deployments, as close in population areas as possible.
  7. The Bank could have functional Kiosks in nominated private sector banks for use by the families of the forces personnel.
  8. To kick off the bank financial pool, all salaries and pensions would be deposited and disbursed through the banks creating a corpus that would create investable pools of funds.
  9. The Bank would run Forces insurances including a Life Insurance Fund and other schemes.
  10. The government would part contribute premiums of Life Insurance for active personnel while they are in service such that in case of death the funds can pay out as life-long pension or as lump sum or a mix as desired by the surviving family.
  11. Such a move would not only provide a security umbrella, but also reduce the strain on the national exchequer.
  12. The Bank would be able to function as any normal bank; give loans, make investments and earn profits which would be for the armed forces and the depositors.
  13. The Banks services would be open to civilian public.
  14. The government would create an Armed Forces Incentive Fund that would be run under the umbrella of the Bank. The incentive Fund would get from 2% to 5% to 10% of all armed forces contracts allocated to suppliers and this would be topped up in the cost+ calculation models if the country moves to those.
  15. The incentive funds would be used to pay out various incentive schemes created for the armed services bureaucracy and army personnel active in the backend service delivery supporting the front line personnel to ensure that meritocracy and honesty take root and are the sole promotion and benefit narrative.
  16. Should the Bank have the capacity to fund national defense projects, it can act as a funding body on loans to the nation and earn interest to enhance earnings.
  17. All such loans would carry sovereign guarantees. Such a model would enhance the nation’s capacity to fund its equipment and systems.
  18. The Bank would also give concessional loans to its forces personnel for home purchases, for the education of children of forces personnel who fall within lower income bands including for foreign education; and part- funding loans for children of officers at the high-income levels.
  19. Retired services personnel would have opportunities to be employed by the Forces Bank, for which training programs would be run in public-private models
  20. In cases of budget shortfall where the needs of the armed forces outstrip the immediate capacity of the government to fund purchases, a funding through consortium of banks could be considered on soft loans with sovereign guarantees.
  21. In such cases, the Defense Services Bank would be the lead manager.
  22. New funding models would be explored that could be a combination of State budgetary allotments, special Defense Manufacturing Bonds issued by the government and even a combination of government and private equity if there are budgetary shortfalls that are preventing the acquisition of urgently required weapon systems.
  23. These Policy moves cumulatively would also reduce and eliminate corruption and reduce the government bureaucracy involved in making decisions that have effectively weakened Indian Defense force beyond belief to dangerous levels.
  24. The countries armed forces cannot be at the mercy of fund crunches in the tough neighborhood environment in which India exists.


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