The revisions will benefit more than 34 lakh civilian employees and 14 lakh defence forces personnel, the government said. Photograph: (Reuters)
HRA is not to be less than Rs 5400 and Rs 3600 and Rs 1800 for X, Y and Z cities, calculated at 30, 20 and 10 per cent of minimum pay of Rs 18,000
The Cabinet on Wednesday cleared the hike in allowances for central government employees on the recommendations of the Seventh Pay Commission.
The House Rent Allowance (HRA) has been fixed at 24%, 16% and 8% of the basic salaries depending on the cities employees work in (X, Y and Z cities), as per the recommendations of the Seventh Pay Commission.
HRA is not to be less than Rs 5400 and Rs 3600 and Rs 1800 for X, Y and Z cities, calculated at 30, 20 and 10 per cent of minimum pay of Rs 18,000.
The revisions will benefit more than 34 lakh civilian employees and 14 lakh defence forces personnel, the government said.
The risk and hardship matrix has been evolved for allowances linked to risk and hardship.
The rates of the Siachen Allowance have been increased from Rs 14,000 per month to Rs 30,000 per month for soldiers, and from Rs 21,000 per month to Rs 42,500 per month for officers.
The suggestions of the pay commission in favour of government employees had been accepted and improved upon, Finance Minister Arun Jaitley said in a Cabinet briefing.
The Seventh Pay Commission had recommended revised rates commensurate with Dearness Allowance (DA).
The commission had recommended that HRA be revised when DA reached 50 per cent and 100 per cent. The government has decided to revise rates when DA crosses 25 per cent and 50 per cent respectively.
Union Cabinet approves Recommendations of 7th CPC on Allowances with 34 modifications; revised rates effective from 1 July 2017.— ANI (@ANI_news) June 28, 2017
Central government employees had demanded that HRA be fixed at 30%, 24% and 16% of their basic salaries.
In June last year, Cabinet had hiked the basic pay of central government employees by 14.27 per cent based on the recommendations of the Seventh Pay Commission.
The pay commission also suggested that HRA rates for government employees be reduced by 2-6 per cent as per the cities they worked in. For metros, it had suggested revising HRA from 30 per cent to 24 per cent, leading to protests.
In July last year, the government formed a committee under Finance Secretary Ashok Lavasa to review the pay commission recommendations on allowances.
The Lavasa panel recommended that HRA be fixed between 25% and 27%.
The Seventh Pay Commission had also recommended doing away with 53 of the 196 allowances for Central government employees and merging of another 36 allowances.