Terming it "immoral" and "unprincipled", he has called for an immediate review and revocation of the decision.
"The move to cap the expenses at Rs 10,000 per month would make a mockery of the objective behind the scheme, announced in the Lok Sabha in 1971 and introduced the next year," the chief minister said, adding this would amount to undermining the sacrifices of defence personnel.
In a statement here, he said the decision was "not only unethical and immoral but also against the interest of the nation, which need to keep the morale of its armed forces high all the time, especially at the present juncture when India is facing all kinds of internal and external threats to its peace and stability."
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"The move to cut down on reimbursement of the educational expenses of such kids, was in fact, a sign of the gradual erosion being witnessed in the government's respect for the defence forces," he said.
The chief minister said, the "progressive dilution" of the welfare initiatives undertaken for our brave jawans was "discreditable and completely lacking in sensitivity".
"Apart from the humanitarian aspect involved, it was also in national interest to ensure that the defence personnel and their families are provided with all the necessary facilities and support to enable them to discharge their duty without any anxiety or stress," he said.