7th Pay Commission: Cabinet decision has shocked govt employees

HRA is currently paid at 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 central government employees have expressed shock the HRA rates were retained as per the recommendations of the 7th Pay Commission. The commission had recommended 24% , 16% and 8% for X, Y and Z cities. The Federations expressed their anguish over the recommendation of HRA and other Allowances. This led to the government setting up a committee to examine the allowances.

Government employees have expressed shock that the same rates of HRA recommended by the pay panel with slight modifications was approved by the Cabinet.

The employees are also unhappy with the date set by the Cabinet for the rollout of allowances. It should have been July 2016. The Cabinet instead went to announce the rollout from July 2017, employees say. After a 12 month wait the government has decided to implement the Allowances without any hike with effect from 1st July 2017 . It is tough decision for us to accept they said.

Government Decision on HRA

HRA is currently paid at 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 7th Pay Commission had recommended reduction in the existing rates to 24% for X, 16% for Y and 8% for Z category of cities. As the HRA at the reduced rates may not be sufficient for employees falling in lower pay bracket, it has been decided that HRA shall not be less than ₹5400, ₹3600 and ₹1800 for X, Y and Z category of cities respectively. This floor rate has been calculated @ 30%, 20% and 10% of the minimum pay of ₹18000. This will benefit more than 7.5 lakh employees belonging to Levels 1 to 3.

7th CPC had also recommended that HRA rates will be revised upwards in two phases to 27%, 18% and 9% when DA crosses 50% and to 30%, 20% and 10% when DA crosses 100%. Keeping in view the current inflation trends, the Government has decided that these rates will be revised upwards when DA crosses 25% and 50% respectively. This will benefit all employees who do not reside in government accommodation and get HRA.

OneIndia News