7th Pay Commission: Crucial cabinet meet to decide on higher allowances, HRA

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A crucial Union Cabinet meeting is expected to be held today to discuss issues relating to higher allowances and HRA as per the 7th Pay Commission. The Cabinet is likely to make some major as well as key announcements following the meeting. For now the meeting has been tentatively been fixed for afternoon.

The Empowered Committee of Secretaries recently submitted a report to the Union Cabinet. The Empowered Committee of Secretaries (ECoS) had screened the report of Ashok Lavasa committee on higher allowances on June 1.

Increase HRA

Increase HRA

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. Some reports stated that a cap of 25 per cent and 27 per cent was put on HRA. 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.

Favourable view

Favourable view

According to some reports the committee on allowances had taken a favourable view on employees' demand on the HRA. On April 27, the Ashok Lavasa panel submitted its review report to Finance Minister Arun Jaitley. The Union Cabinet is expected to look into the concerns of Central Government employees regarding the higher allowance and the HRA.

What the Cabinet will discuss

What the Cabinet will discuss

With government employees awaiting news on higher allowances as per the 7th Pay Commission, let us examine a list of possibilities based on the Union Cabinet meeting likely to take place tomorrow. Employees can expect a hike in the range of 157 to 178 per cent is the HRA rates as per the 6th Pay Commission are retained.

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

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

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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