7th Pay Commission: HRA hike from Rs 2,100 to 5,400

The new HRA modification would see atleast 106% to 157% hike in the HRA.

Following the implementation of the 7th Pay Commission, the HRA hike would be a good one for the central government employees. At least 48 lakh employees of the central government will benefit from the HRA.

The minimum HRA would go up from Rs 2,100 to Rs 5,400. Although the HRA percentage has been lowered, it is subjected to minimum fixation of HRA of Rs 5,400 for X, Rs 3,600 for Y and Rs 1,800 for Z category of cities for Level 1, 2, and 3 employees. This minimum HRA floor rate has been calculated on the basis of previous HRA rates i.e. 30%, 20%, 10%.

Revision of basic pay

The higher HRA became possible due to the revision of the basic pay scale after multiplying by a factor of 2.57 and then rounded off. For example for level 1, the earlier basic pay scale was Rs 7,000 and HRA was Rs 2,100 for X Category, Now the revised basic pay scale is Rs 18,000 (7000x2.57=17,990) and HRA is Rs 5400.

Grade pay of Level 1

Considering that the grade pay of Level 1 central government employees is Rs 18,000, there has been a hike of Rs.1,080/- for X, Rs.720/- for Y and Rs.360/- for Z Cities. There are approximately 7.5 lakh employees in this bracket and they will enjoy a 157% hike in the HRA component of their salaries.

HRA as per the previous pay commission was 30%, 20%, 10% for cities categorized in X, Y, Z tiers. Cities with population of 50 lakh and above are categorized as X, cities with population between 5 lakh to 50 lakh are categorized as Y and cities with population less than 5 lakh are categorized as Z. With the 7th Central Pay Commission coming into the picture, the HRA percentage has been lowered to 24%, 16% and 8% for X, Y, Z category respectively. However, the HRA percentage will change to 27%, 18% and 9% if DA crosses 25% and will be further raised to 30%, 20% and 10% if DA crosses 50%. To protect the interests of central govt. employees at Level 1, 2, 3 the govt. fixed the minimum HRA slabs.

157 per cent hike

The new HRA modification would see atleast 106% to 157% hike in the HRA calculation of central government employees at different levels. This HRA hike will be visible in the July take home salaries of central government employees.

Government gearing up

Now with the proposals as per the 7th Pay Commission being cleared, the government is gearing up to implement the same. The government wants to ensure that the benefits are visible in the July salary. It does not want any delay in the implementation.

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