7th Pay Commission: Jaitley absent, Cabinet does not take up higher allowances, HRA

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The wait for the central government employees is about to get longer as the Union Cabinet is unlikely to decide on the higher allowances, including HRA under the 7th Pay Commission today. The issue is not part of the Cabinet agenda today.

Finance Minister, Arun Jaitley is on a visit to South Korea today and the matter can be taken up only once he returns. During the previous Cabinet meeting too, Jaitley was absent as he was away in Paris.

Allowances from July 1

Allowances from July 1

Once the Cabinet sets the agenda to discuss the pay commission recommendations, the issue of higher allowances too would be taken up. Sources say that the Cabinet would clear the proposal and the government will implement the revised allowances from July 1.

Cabinet meet on 7th Pay Commission put off

Cabinet meet on 7th Pay Commission put off

The Cabinet was supposed to take a final decision today on the E-CoS report. The E-CoS was set up to screen the Lavasa panel's recommendations on allowances and it had submitted its report last week to the Cabinet for final approval. Finance Minister, Arun Jaitley is on a visit to South Korea today and the matter can be taken up only once he returns. During the previous Cabinet meeting too, Jaitley was absent as he was away in Paris.

E-CoS report

E-CoS report

The Empowered Committee of Secretaries has reportedly given its view in favour of AK Mathur-led 7th Pay Commission recommendation, regarding decrease in house rent allowance (HRA) by 2-6 percent depending on type of cities.

The Commission headed by AK Mathur had earlier proposed the rate of House Rent Allowance (HRA) at 24 percent, 16 percent and 8 percent of the 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 percent, 18 percent and 9 percent when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent.

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

The two options

The two options

If the government accepts the bare recommendations of A K Mathur-led Commission then the HRA component of central government employees will increase ranging between 106 percent and 122 percent.

A central government employee at the very bottom of the pay scale under 6th Pay Commission was till now entitled to an HRA of Rs 2,100 on basic pay of Rs 7,000 (basic pay that includes pay of pay band + grade pay) in a Class X city. It is to be noted that government, while implementing the 7th Pay Commission in June last year had made it clear that till the final outcome of allowances committee is being placed, the employees would be getting the allowances as per 6th Pay Commission.

Now, as per 7th Pay Commission, the new entry level pay at this level is Rs 18,000 per month against which the new HRA for a Class X city would be Rs 4,320 per month, that is 106 percent more than the existing level.

Similarly, at the highest level of the pay scale, the Cabinet Secretary and officers of the same rank have a basic pay of Rs 90,000, which means they are entitled to current HRA of Rs 27,000 in Class X towns. After the revised pay scale, the new basic pay is Rs 2.5 lakh, for which the HRA would be Rs 60,000, meaning a hike of 122 percent.

If the government retains the exiting HRA rates as per 6th Pay Commission then the HRA component of central government employees will increase ranging between 157 percent and 178 percent.

A central government employee at the very bottom of the pay scale under 6th Pay Commission was till now entitled to an HRA of Rs 2,100 on basic pay of Rs 7,000 (basic pay that includes pay of pay band + grade pay) in a Class X city. It is to be noted that government, while implementing the 7th Pay Commission in June last year had made it clear that till the final outcome of allowances committee is being placed, the employees would be getting the allowances as per 6th Pay Commission.

Now, as per 7th Pay Commission, the new entry level pay at this level is Rs 18,000 per month against which the new HRA for a Class X city would be Rs 5,400 per month, that is around 157 percent more than the existing level.

Similarly, at the highest level of the pay scale, the Cabinet Secretary and officers of the same rank have a basic pay of Rs 90,000, which means they are entitled to current HRA of Rs 27,000 in Class X towns. After the revised pay scale, the new basic pay is Rs 2.5 lakh, for which the HRA would be Rs 75,000. This would mean that there would be a hike of 178 per cent.

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