Final decision on allowances, HRA windfall likely today

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After a long wait, more than 50 lakh government employees have lots to cheer, as the central government has approved the recommendations of the 7th Central Pay Commission on allowances. The revised pay will come in effect from July 1. Almost 50 lakh central government employees will benefit from the revised allowance structure under the Seventh Pay Commission. The 7th Pay Commission's recommendations will have combined additional financial burden of Rs 30,748 crore per annum on the central government.

The Union Cabinet finally approved the reformed allowance structure under the Seventh Central Pay Commission with 34 modifications on Wednesday evening.

The CPC recommended that 53 allowances be abolished and 37 be subsumed in an existing or a newly proposed allowance.

In June past 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.

An official release said that the modifications were based on suggestions made by the CoA in its Report submitted to Finance Minister on April 27, 2017 and the Empowered Committee of Secretaries set up to screen the recommendations of 7th CPC. The 7th Pay Commission had recommended that TLA will not be admissible with Special Duty Allowance (SDA) payable in North-East, Ladakh and the Islands.

It will be calculated at 30 per cent, 20 per cent and 10 per cent of the minimum pay of ₹18,000 per month. The pay commission had recommended a reduction in the existing rates to 24% for X, 16% for Y and 8% for Z category of cities.

The CPC recommended revision of HRA when DA reaches 50 per cent and 100 per cent.

House Rent Allowance (HRA) is now paid @ 30% for X (population of 50 lakh & above), 20% for Y (5 to 50 lakh) and 10% for Z (below 5 lakh) category of cities. The officers will now get monthly allowance of Rs 42500, which was earlier Rs 21000.

The cabinet also enhanced Siachen allowance paid to soldiers deployed there from the existing rate of Rs 14,000 to Rs 30,000 per month for jawans and junior commissioned officers, and from Rs. 21,000 to Rs. 42,500 per month for officers. The rates for specific clothing for different categories of employees will be governed separately.

Besides, the children education allowance has been increased from Rs 1,500 per month / child to Rs 2,250 per month / child with a maximum limit of two children.

According to sources, the allowance hike under the 7th pay commision will be likely to announced after this evening's cabinet meet.

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