Armed forces hit by toxic bonds?
new delhi — The IL&FS contagion continues to spread aggressively, the latest casualty being the Indian armed forces. Several hundred thousands of salaried workers across public sector undertakings and Postal Life Insurance have already been infected with these bonds. Now, it is learnt, the virus has also spread to the armed forces.
IANS learns that a few sections of the armed forces, primarily the army, have invested their corpus of funds in the once AAA rated IL&FS bonds to secure their future. The Indian Army has three specific funds in which fellow countrymen can contribute — Army Welfare Fund Battle Casualties (set up in 2016 after the Siachen avalanche disaster and the Pathankot/Uri incidents), Army Central Welfare Fund and the Paraplegic Rehabilitation Centre Pune — towards the members/ families of the armed forces who have made the supreme sacrifice for the nation. It is still not known
whether these funds have invested in the virus-laden bonds.
There is also the flagship National Defence Fund which was set up to take charge of voluntary donations in cash and kind received for promotion of the national defence effort. The fund is used for the welfare of members of the Armed Forces and paramilitary forces and their dependents. At the end of March 31, 2018, the total expenditure was Rs640.75 million, whole receipts were Rs830.85 million and the total cumulative balance was Rs11.15 billion.
There is also a department for ex-servicemen’s welfare which gives benefits to the widows of fatal battle casualties. This pertains to death due to accident in course of duties, death due to terror violence, death during enemy action in war or border skirmishes or against militants/terrorists and death during enemy action in war or warlike engagements specifically noted — the benefits are given in the following way, which is Rs1 million each in the first two cases and Rs1.5 million and Rs2 million, respectively in the latter two cases. Various other benefits are provided to war widows.
These funds, formed by servicemen with the objective of supporting fatalities and army widows, have invested in these bonds considering the ratings and safety assurances portrayed by the rating agencies. With the IL&FS default, all these investments are now nearly junk, jeopardising the interest and future of millions of armed forces. —