A high-level committee headed by finance secretary Ashok Lavasa is likely to submit its final report on revised rates of house rent allowance (HRA), dearness allowance (DA) and other allowances for central government staff and pensioners to finance minister Arun Jaitley this week.
The final recommendations on allowances will benefit over 4.7 million central government employees and 5.3 million pensioners.
The 7th Pay Commission had earlier proposed the rate of HRA at 24 per cent, 16 per cent and 8 per cent of the basic pay for Class X, Y and Z cities, respectively.
The commission had also recommended that the rate of HRA be revised to 27 per cent, 18 per cent and 9 per cent, respectively, when DA crossed 50 per cent, and further revised to 30 per cent, 20 per cent and 10 per cent when DA crossed 100 per cent.
With regard to allowances, employee unions have demanded HRA at the rate of 30 per cent, 20 per cent and 10 per cent, for different classes of cities.
The committee, which was asked to examine the 7th Pay Commission recommendation for abolition of 53 allowances out of a total of 196 and subsuming another 36 into larger existing ones had held a conclusive meeting on 6 April.
The committee, at its previous meeting on 28 March, had sought comments from the ministries of defence, railways and posts on treatment of 14 allowances. These allowances include accidental allowance, outstation detention allowance, trip allowance, and ghat allowance.
The government had earlier said that the decision on allowances will be taken after the committee on 7th Pay Commission submits its report. However, the committee's views are not yet known, a top employee union official said.
The allowance committee had held a meeting in this regard on 6 April, which some employee union officials termed as "conclusive".
The 7th pay commission had examined a total of 196 existing allowances and recommended abolition of 51 allowances and subsuming of 37 allowances.
The government had in June accepted the recommendation of Justice AK Mathur-headed Seventh Pay Commission in respect of the hike in basic pay and pension. But the 7th Pay Commission's recommendations relating to allowances were referred to the Ashok Lavasa committee.