7th Pay Commission: Cabinet postpones meet, here is what happens next on allowances and HRA

Good news is there for central government employees sources say.

The Union Cabinet has fixed a new date to take up the issue relating to higher allowances and HRA as per the 7th Pay Commission. Sources told OneIndia that the matter was not taken up on Wednesday by the Cabinet. Now the agenda will be set following which the matter will be taken up for final consideration.

A Union leader who did not wished to be named said that the matter will be taken up soon by the Cabinet.

Employees will have to wait

A crucial Union Cabinet meeting was expected to be held on Wednesday. Now that the matter was not taken up, the Cabinet will discuss the issue soon after setting an agenda, the leader also informed.

E-CoS report with Cabinet

The report with by Empowered Committee of Secretaries is with the Cabinet. Senior officers including Finance Minister Arun Jaitley is going through the report. He would discuss the matter directly with the Prime Minister Narendra Modi and then place it before the Cabinet for a final decision on higher allowances and HRA.

Proposal for consideration by Cabinet

An increase in House Rent Allowance (HRA) and basic pay was among the major concerns raised at the meeting of Empowered Committee of Secretaries for Central government employees. Although some reports indicated that the a cap of
25 per cent and 27 per cent was put on HRA, the Cabinet is likely to reverse that as per the employees' demands.

What is demanded

The Central government employees have demanded that the HRA must be left unchanged at 30 per cent, 20 per cent and 10 per cent depending on the city where they live. The 7th Pay Commission had recommended that the HRA must be reduced to 24 per cent, 16 per cent and 8 per cent of the basic pay.

Hike in allowances to be cleared

Good news is there for central government employees sources say. The proposal to hike their allowances as per the recommendations of the 7th Pay Commission will be considered by the Cabinet.

The 178 per cent HRA hike

The Cabinet will first discuss the hike employees have been asking in the range of 157 to 178 per cent is the HRA rates as per the 6th Pay Commission. 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). If the Cabinet retains the existing HRA then the component for central government employees will increase in a range of 157 to 178 per cent.

Possibilities

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.

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, meaning a hike of around 178 percent.

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