The NFU Saga of Armed Forces Degradation

Deepak Sinha

In its order dated 23^rd December 2016 the Principal Bench of the Armed Forces Tribunal directed that the Non Functional Financial Upgrade (NFU), already granted to Organised Class ‘A’ Services and others, be also made applicable to the Armed Forces. In its order it went so far as to state that “ the respondents (MoD) have been unfair, evasive and without valid justification, for denial of the NFU benefit to the Defence Forces. This denial has resulted in iniquitous treatment to the Defence Forces….. We find that there are, indeed, a wide range of issues that have impacted the Defence Forces, due to this denial, and we cannot be permissive to any denial, which impacts on the efficiency; morale and status of the Armed Forces adversely, since such is not the constitutional position or intention. It is also evident on record with us that the Army and later the Defence Forces have been agitating this issue to the highest levels since 2003 and pre VI CPC, subsequently”^[i].

As has become a matter of routine with this Government, it lost neither the opportunity nor time in going after the military , and instead of accepting the verdict, went into appeal at the Supreme Court, where it was granted a stay till the matter was decided. Nine years and seventy adjournments later the case drags on and on. At the latest hearing, on 20^th August 2025, the Attorney General, Mr. Venkataramani, personally appearing on behalf of the Government requested for an adjournment. The adjournment was granted by Hon’ble Justice JK Maheshwari, on the grounds that since it was the Attorney General personally requesting, he was helpless! Such are the vagaries of our judiciary and its outlook on justice. The hypocrisy that the Modi Government indulges in, is indeed mind-blowing. On one hand it goes around tom-tomming the Military’s famous victory under the leadership of our “able” Prime Minister in Operation Sindoor, while simultaneously making every effort to deny the Military any semblance of honour and parity as existed amongst our Central Government Services prior to the NFU being granted. It has made it its list motif to demean and degrade the military at every opportunity.

For those not fully conversant with the nitty gritties of the NFU saga I have added my last article on the subject that was published by the Indian Defence Review on 17^th February 2023^[ii].

General VP Malik, the former Chief of Army Staff, recently tweeted that the “Government now grants NFU to even Railway Officers who have their own assured career progression scheme… but refuses to Armed Forces…despite orders by AFT Bench Delhi…. Pays crores from defence budget for filing 189 SLP in SC… Our #Patriotic MOD certainly deserves a salute.” It is no secret that our military’s senior hierarchy had been consistently opposed to grant of NFU to the military for sensible reasons touched on later. What they failed to comprehend was what the impact of such a move would be if it were to be pushed through for other Central Government Services with the military being excluded, as has been the case. One is glad that the former Army Chief has had a change of heart and finally understood the adverse consequences of the degradation the military has been subjected to, better late than never.

Let us be clear, the Non-Functional Financial Upgrade (NFU) Scheme granted by the government following the 6^th CPC is not only the most shameful of schemes, but also the biggest scam that the politician-bureaucrat nexus has inflicted on the taxpayer. This scandalous proposal, in essence, attempts to address stagnation across different Organised Group ‘A’ Services (Central Services) due to limited vacancies in higher grades. It does so by the grant of a higher pay scale on a non-functional basis till SAG and HAG level, after a gap of two years, as compared to an IAS officer of the same batch who is posted at the Centre at the SAG or HAG level. These promotions are independent of organisational requirements, availability of vacancies and level of responsibility or span of control of a post. It remains completely without precedent anywhere in the world, in either governments or the corporate world.

It was accepted by the Manmohan Singh government despite its “wide-ranging financial, organisational and governance implications” as the 7th CPC puts it, especially with regard to inter-se status between various services and their military counterparts, which had been sacrosanct till then since Independence. The irony of it was that the Armed Forces, the worst affected because of their steeply pyramidal structure, were kept out. As was bound to happen it had a particularly disastrous impact on the “Armed Forces morale, status, cohesion, and national security”, to quote the 7th CPC.

Justice Mathur, the Chairman of the 7^th CPC recommended the same benefits be granted to the Armed Forces and others left out, along with the sacrilege of recommending the doing away with the two year advantage enjoyed by the IAS. One would have expected the IAS representative on the Commission to object to such a recommendation. Surprisingly, Vivek Rae, the IAS member, did not, and in fact went on to recommend that the scheme be scrapped on grounds that “To strive for uniform career progression across such a diverse set of services and cadres, with widely varying functions, violates fundamental management principles relating to organisational structures. Such a dispensation, with automatic career progression till HAG level, completely buries the concept of merit based career progression and undermines considerations of efficiency and accountability. In effect, the present policy dispensation converts already weak organisational pyramids in Organised Group ‘A’ Services into broad cylinders, when in fact, considerations of efficiency and accountability require that the existing cylinders be converted into steeper pyramids.”

Interestingly, Mr. Rathin Roy, the other Member, while agreeing with Mr. Rae, differed on his reasons and pointed out that the “broad parity was disturbed by granting NFU to IPS, IFoS and Organised Group ‘A’ Services after the 6^th CPC report, without a similar dispensation being extended to the Defence Forces. Consequently, the Defence Forces officers, who are in no way lower in status or responsibility than Group ‘A’ Central Services, though not classified as such, have fallen steeply behind IPS/IFoS and 49 Organised Group ‘A’ Services.” He cited another obvious fact that the pyramidal structure of the Armed Forces cannot be disturbed and therefore since they cannot be given this benefit, it must be done away in totality.

Undoubtedly, while the arguments made against the scheme were cogent, substantive, and not without merit, they did not find favour with the government, which ignored all recommendations and let the status quo prevail. It resulted in serving officers from the CAPF and the Armed Forces approaching the Delhi High Court and the Armed Forces Tribunal respectively. Not surprisingly, both the HC and AFT ruled favourably for the petitioners, leading to the Government promptly going into appeal against the orders to the HSC.

In what is now the norm in the manner the Armed Forces are summarily discriminated against, the HSC reserved its orders on the Government appeal against the AFT order, while it went on to accept the judgement of the Delhi HC. Interestingly, that court had concluded “The Government’s contention that NFFU cannot be granted since the CAPFs comprise a strict hierarchy with a well-defined Command and Control structure; that any interference with this structure would be detrimental to the interest of the forces and would adversely affect its operation and functioning; It was thus, claimed that all posts in the CAPFs are functional and there is no room for Non Functional posts, is untenable because by very definition there is no interference with functions, duties or the posts but only an increase in the financial prospects……. It cannot be overemphasised that in matters relating to the Armed Forces and the Paramilitary/CAPFs there ought to be clarity and certainty apropos the service benefits which the forces would be entitled to.”

It goes without saying that the conclusions reached by the HC are equally applicable to the Armed Forces, especially given that the Delhi HC has recently ruled in another matter that the CAPF are Armed Forces of the Union akin to the Army, Navy and Air Force. Not only has it gone about destroying the earlier parity that existed between the Armed Forces, CAPF and other Group A Services by this manner, but also brought about the reduction in status of Junior Commissioned Officers by refusing to accept that they are Group B equivalent Gazetted Officers as has been specified by the Army Act 1950. The list of other such actions that have led to degradation of the military will fill pages.

The fact that the senior military hierarchy has been rendered irrelevant and shown to be self-seeking makes matters far worse. All of this, along with the visible mistreatment of veterans, and introduction of fanciful recruitment schemes have had an extremely adverse impact on the morale and motivation of our Armed Forces. A clear example of this can be drawn from the recent presentation to the Prime Minister by the Superintendent of Police, Leh. She stated “The extreme harsh climate, difficult terrain and remoteness of the area affects the morale and motivation of jawans and officers on ground, which only reminds them to start the reverse countdown of their deployment time and each unit wants to complete their tenure and return back to the plains. In the longer duration they don’t see the utility to defend the barren acres of land when no population or economic activity is being carried out…. During interaction with one senior officer whose unit is based right on the forward area, he shared that, if by retreating 400 metres back we can buy peace with the PLA for four years then it is worth it.” If there is even an iota of truth in what has been stated, we should be extremely worried about the state of our national security. Clearly, as things stand, we are seeing the veritable destruction of our Armed Forces before our own eyes by a complicit Government for reasons that are utterly incomprehensible. There seems to be nothing that concerned citizens can do to change things and that is truly astounding and immensely saddening.

^[i] https://www.aftdelhi.nic.in/assets/judgement/2016/OA/OA%20802-2015.pdf

^[ii] https://indiandefencereview.com/the-nfu-saga-of-armed-forces-degradation/