7th Pay Commission: HRA latest news and how it will now be calculated

New Delhi, July 25: There was some confusion with regard to the 7th Pay Commission and the allowance relating to House Rent Allowance.

The Centre has said that the HRA of a Central Government employee would be increased if the city in which he or she is living has been upgraded on the basis of the population.

A city is is categorised on the basis of X, Y and Z. In X category cities, the population is above 50 lakh and the HRA is 24 per cent for month. For the Y and Z category cities, the HRA is 16 and 8 per cent respectively.

A circular by the Finance Ministry stated that if a city has been upgraded on the basis of the population, then the HRA of the CG employee living there will be enhanced. The circular was issued by the Finance Ministry after the upgradation of cities was made based on a report by the government agencies.

There was some confusion relating to the HRA and this clears all doubts. The CG employees have been demanding a hike of up to Rs 26,000 after the 7th Pay Commission had recommended that the basic minimum pay would be Rs 18,000.