7th Pay Commission: 'Confirmed' revised allowance in July without arrears
Central government employees waiting for an update on allowances as per the 7th Pay Commission will get some information this week. While it is confirmed that the revised allowances will be given to the lakhs of central government employees from July onwards, there is a question mark on the revised allowances.
Reports state that the Cabinet will clear the revised allowances this week, but no decision would be taken on the revised allowances. There are several reasons cited by the government not to give the arrears on allowances.
No arrears on allowances
The government has decided that it would not give any arrears on allowances. There are many reasons that the government has cited not to give the arrears on allowances. This decision is unlikely to go down with many central government employees. Some of the unions have also planned on protesting if arrears are not given on the allowances.
Confirmed, revised allowances will be given
The government has however said that it would give the revised allowances from July 2017 onwards. The government feels that this is an important announcement and would make many employees waiting for over 18 months happy. The Cabinet will be convened this month itself. The July roll out of the revised allowances has been confirmed and it will be given from July itself.
Why no arrears on allowances?
While the good news on revised allowances will come 18 months after the implementation of the 7th Pay Commission, the decision on arrears has been put on hold. The government feels that delay in disbursal of higher allowances without arrears will help the government save Rs 2,200 crore per month while cumulative saving Rs 40,000 crore since 1 January last year.
While new allowances will be given, central government employees will get Dearness Allowances with their new pay scale. The pay panel had recommended that of a total of 196 allowances, 52 be abolished altogether and 36 be abolished as separate identities by subsuming them in another allowance.
The 7th Pay Commission also recommended slashing the House Rent Allowance (HRA) from 30, 20 and 10 per cent to 24, 16 and 8 percent of the Basic Pay for Class X, Y and Z cities respectively.
The central government employees' unions demanded HRA at the rate of 30 per cent, 20 per cent and 10 percent of basic pay instead of 24, 16 and 8 percent.