The Indian government wants soldiers to serve longer as it faces shortage of funds along with rising manpower cost. While that may temporarily address a burgeoning fiscal hole, it will increase the age-profile of the military. The newly created Department of Military Affairs headed by General Bipin Rawat has proposed to increase the retirement age of officers of the Indian armed forces and to cut down pension of officers opting for premature retirement. The proposal stated that DMA is reviewing the pension entitlements because the loss of high-skilled manpower results in a void in the services skill matrix and is counterproductive to the armed forces.

As per the proposal, only those who do more than 35 years of service will be entitled for full pension that is 50 per cent of the last pay drawn. The proposal also pointed that there will be no change of pension entitlements of battle casualties. An officer with 20-25 years of service will get 50 per cent of 'entitled pension'. In other words the pension will be halved. The existing entitled pension is 50 per cent of the last pay drawn. An officer serving for 26-30 years would get 60 per cent of 'entitled pension'; those doing 31-35 years of service will get 75 per cent of entitled pension. Only those who do more than 35 years of service will be entitled for full pension, that is 50 per cent of the last pay drawn.