7th Pay Commission: Govt employees could expect Rs 48,000 maximum monthly HRA hike next month

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There is some very good news for central government employees as they are set to get a maximum monthly hike in their house rent allowance or HRA by up to Rs 48,000 from June onwards as per the 7th Pay Commission recommendations.

The Empowered Committee of Secretaries which was set to screen the pay panel's recommendations on allowances will firm up the proposal in the next 15 days according to sources. This would then be immediately approved by the Cabinet.

Report being examined

Report being examined

A report by the high-level committee headed by Finance Secretary Ashok Lavasa had submitted its report to the Finance Ministry on April 27. The report is currently being examined by the Department of Expenditure. This would then be placed before the Empowered Committee of Secretaries which was set up to screen the 7th Pay Commission recommendations. Sources say that the process has been expedited and would get a Cabinet nod in the next 15 days.

Modifications suggested

Modifications suggested

The Finance Ministry says that after consideration by the E-Cos, the proposal to implement the pay panel's recommendations will be placed before the Cabinet for approval. The Lavasa Committee had suggested modifications in a few allowances which is applicable universally to all employees andf also for those in specific categories such as railwaymen, postal employees, scientists, defence forces personnel, doctors, nurses among others.

An increase of 106 per cent

An increase of 106 per cent

If the bare recommendations of the pay panel are accepted then the HRA component for the central government employees will increase in the range of 106 and 122 per cent. Till now a central government employee at the bottom of the pay scale under the 6th Pay Commission was entitled to HRA of Rs 2,100 on basic pay of Rs 7,000 in a Class X city. While implementing the 7th CPC in June 2016 the government had said that till the final outcome of the allowances committee is placed, the employees would get allowance as per 6th CPC.

As per the 7th CPC, 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. This is a 106 per cent increase when compared to 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. This would mean that they are entitled to a current HRA of 27,000 in Class X towns. After the revision the new basic pay is Rs 2.5 lakh, for which the HRA would be Rs 60,000. This is a 122 per cent hike.

Increase of 157 per cent

Increase of 157 per cent

If the HRA rates as per the 6th CPC are retained by the government then the component of central government employees will increase in a range of 157 and 178 per cent. An employee at the bottom of the pay scale under the 6th Pay Commission will be entitled for HRA of Rs 2,100 on basic pay of Rs 7,000 in a Cass X city.

Currently as per the 7th Pay Commission, the new entry level pay at this level is Rs 18,000 a month as against which the new HRA for a Class X city would be Rs 5,400 a month. In the highest level of the pay scale Cabinet secretaries and officers of the same rank have a basic pay of Rs 90,000. This means they are entitled to a current HRA of Rs 27,000 in Class X towns. Following the revision the new basic pay is Rs 2.5 lakh. The HRA would be Rs 75,000 then.

Committee favoured 7th CPC recommendations

Committee favoured 7th CPC recommendations

It is understood that the the committee had favoured the recommendations made by the A K Mathur led 7th Pay Commission recommendation with regard to a decrease in HRA by around 2 to 6 per cent depending on the type of cities. The Mathur led commission had first proposed that the rate of HRA be at 24 per cent, 26 per cent and 8 per cent of the Basic Pay for Class X, Y and Z cities respectively.

The commission had further 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. Currently the rates of HRA for Class X, Y and Z cities and towns are 30 percent, 20 percent and 10 percent of Basic pay.

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