The government has rejected a long-standing demand of the armed forces for higher Military Service Pay (MSP) for over 1.12 lakh military personnel including Junior Commissioned Officers of the Army, official sources said on Tuesday.

They said  that the Army headquarters is "very anguished" over the decision by the Finance Ministry, and will seek its immediate review.

Around 1.12 lakh military personnel including 87,646 JCOs and 25,434 personnel of equivalent rank from the Navy and the Indian Air Force will be affected by the decision.

The demand was to increase the monthly MSP from Rs 5,500 to Rs 10,000 and the total annual financial outgo would have been Rs 610 crore if the government had accepted the demand, sources said.

The MSP for the military personnel was introduced recognising their unique service conditions and hardships.

"The proposal for higher MSP for JCOs and equivalent rank of the Navy and IAF has been rejected by the Finance Ministry," said a source.

At present, the MSP has two categories — one for officers and another for JCOs and jawans.

The seventh Pay Commission had fixed Rs 5,200 as MSP per month for JCOs and jawans while putting it at Rs 15,500 for officers between Lieutenant-rank and Brigadier-rank.

The Army has been pressing for granting an higher MSP to the JCOs, arguing that they are gazetted officers (Group B) and play a very vital role in command and control structure of the force.

"Since JCOs are Group B gazetted officers and also have considerable length of service, it is incorrect to grant them MSP on par with the jawans. It is very unfair," said a military officer who wished not to be named.

The Army had taken up the issue strongly with the Defence Minister and the three services as well as the Defence Ministry were on the same page on the issue, the sources said.

The MSP was first introduced by the 6th Pay Commission, accounting for compensation for intangible aspects of military service.

It accounts for a range of "hardships and disadvantages" which cannot be evaluated while assessing pay comparability.

The concept of MSP for armed forces personnel is widely prevalent in European countries.

The armed forces were pressing for a separate slab of MSP for JCOs and equivalent rank.

In November last year, the Army clarified JCOs are gazetted officers and cancelled a seven-year-old note describing them as "non-gazetted" officers.

The decision by the Army came amid growing resentment among a large section of its officers over the controversial issue of rank-parity between them and their civilian counterparts in the service headquarters.