Critically analyse the fiscal and social effects of increasing the retention of Agniveers in the regular cadre.

The Agnipath scheme (2022) recruits Agniveers for four years and lets up to 25% of each batch stay on in the regular cadre. They receive no pension [1]. In November 2026, the Union Cabinet approved a two-year second engagement for the remaining 75%. After it, they can be considered for regular enrolment [2]. This wider retention brings both gains and costs, on the fiscal side and the social side.

Fiscal effects

• (+) Training investment is protected. The services' review found "outstanding performance" in skills and technology [2]. Keeping these soldiers means their training is not lost after four years.
• (+) Pension liability grows only gradually. The 25% limit at year four stays. Enrolment after year six depends on the Agniveer's willingness and on selection criteria, so it is not automatic [2].
• (−) The scheme's main saving gets smaller. PRS expected Agnipath to cut personnel costs because at least 75% get no pension [3]. Every Agniveer who becomes a regular through the second route is again entitled to a pension.
• (−) Less money for modernisation. Salaries and pensions already take up about 50% of defence spending (2025-26) [4]. Any increase leaves less for capital outlay.
• (−) Costs cannot be checked. PRS notes that the Agnipath salary breakup is not fully available in budget documents [4]. Parliament therefore cannot check whether the extra two years are worth the cost.

Social effects

• (+) Less worry about jobs. The scheme's biggest social concern was youth leaving in their early twenties without secure jobs [1]. The second route now gives every Agniveer a possible path to regular service [2].
• (+) Better terms. The second engagement brings higher pay, an enhanced Seva Nidhi and seniority benefits [2]. This builds on the original exit corpus of about Rs 11.71 lakh [1].
• (−) The exit safety net was designed for four-year leavers. MHA's 10% CAPF reservation comes with a 3-year age relaxation [5]. An Agniveer who is not selected after six years has already used up most of it.
• (−) Fairness concerns. Leavers spend longer away from civilian education and skilling. Earlier batches released under the old rules also miss out on the new benefits.

On balance, wider retention is a correction based on evidence. It improves social security, but it gives back part of the scheme's fiscal logic. The way forward is to publish a cap on second-route enrolment, show Agnipath costs as separate lines in the Demands for Grants, and adjust the CAPF age relaxation for six-year leavers. These steps would keep the force young and its budget sustainable while giving soldiers decent work, in line with SDG 8.