7th Pay Commission: Date of effect on revised allowances, Cabinet meet this week

While we have clarity on the revised allowances it is yet to be seen if the Cabinet will clear the proposal on arrears on allowances.

While it is confirmed that the central government employees would get revised allowances as per the 7th Pay Commission from July 2017 onwards, a crucial Cabinet meeting is scheduled to be held on Wednesday.

Sources say that the Cabinet meeting is scheduled for Wednesday and the Finance MInister Arun Jaitley will take up the report submitted by the Empowered Committee of Secretaries (E-CoS). The matter could not be taken up by the Cabinet last week as the agenda was not set. This time sources say that the agenda on the issue would be set.

Change in allowance structure

Jaitley is expected to table the proposal for the changes in the allowance structure. The Cabinet is expected to give the nod and give some good news that the central government employees have been waiting for. The National Joint Council of Action is confident that that revised or higher allowances will roll out from July onwards. It is the right of the employees to get revised allowances, NJCA chief Shiv Gopal Mishra said. The employees are expecting a double bonanza from the Arun Jaitley, the Finance Minister of India.

Has government failed the employees?

Many central government employees say that they are disappointed with the government for delaying the issue. They say that they are losing monetary benefits as a result of this delay. The two things that they want to know urgently are: The amount of increase in the rates and percentage on allowances and also what will be the date of effect. The delay on these two issues is the main reason for the frustration of the employees. The federations are exerting pressure on the government and have also planned agitations if a decision is not taken soon.

Suspense on arrears

While we have clarity on the revised allowances it is yet to be seen if the Cabinet will clear the proposal on arrears on allowances. Mishra said that there is no confirmation on the arrears. He also added that it is the right of the central government employees to get arrears. There has been an unprecedented delay in this regard, Mishra also added.

What about HRA

If the recommendations of the pay panel on HRA is accepted then the central government employees will get an increase ranging between 106 to 122 per cent. 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. The 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.

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.

What if cabinet retains existing HRA?

All eyes would be on the Cabinet meeting expected to be held on Wednesday. If it decides to retain 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.

New entry level

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 employees would get a hike of 178 per cent.

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