Cabinet approves Pay Commission recommendations on allowances

Union Cabinet today approved revised recommendations of the 7th Pay Commission on allowances, enabling central government employees to draw increased pay and allowances from July.

The cabinet approved revised allowances for central staff at its meeting on Wednesday, a year after the 7th Pay Commission submitted its recommendations on pay and allowances for central government employees, including pensioners as well as for the armed forces.

The approval on allowances come nearly 3 months after the committee headed by finance secretary Ashok Lavasa submitted its report on revisions, after taking into account the concerns raised by employee unions.

The approval, though delayed, comes with a substantial hike in allowances from the original pay panel recommendations. The trigger for raising house rent allowance (HRA) has now been set lower at 25 per cent increase in dearness allowance (DA) against 50 per cent earlier, according to union leader Shiv Gopal Mishra.

Accordingly, the house rent allowance will go up by 3 per cent, if the Dearness Allowance (DA) crosses 25 per cent of basic pay.

The high-level committee headed by finance secretary, Ashok Lavasa, which submitted its report to finance minister Arun Jaitley on 27 April, had, reportedly, given its view in favour of the 7th Pay Commission recommendation, regarding decrease in house rent allowance (HRA) by 2-6 per cent depending on type of cities.

The Pay Commission headed by AK Mathur had proposed the HRA at 24 per cent, 16 per cent and 8 per cent of basic pay for Class X, Y and Z cities, respectively.

The Commission had also recommended that the rate of HRA will be revised to 27 per cent, 18 per cent and 9 per cent when DA crosses 50 per cent, and further revised to 30 per cent, 20 per cent and 10 per cent when DA crosses 100 per cent.

The existing rates of HRA for Class X, Y and Z cities and towns are 30 per cent, 20 per cent and 10 per cent of basic pay (pay in the pay band plus grade pay).