7th Pay Commission: Crucial cabinet meet on allowances, HRA tomorrow, will employees get pay hike

The commission had suggested doing away with 53 of the 196 allowances drawn by Central government employees.

There could be some relief for the lakhs of central government employees who have been waiting for updates on the higher allowances and HRA as per the 7th Pay Commission. Sources indicate that after the E-CoS submitted the report the Union Cabinet would meet to take a final call on HRA, allowances and also a pay hike.

Cabinet meet tomorrow

The Cabinet is most likely to meet tomorrow to discuss the matter. A decision on the revised allowances will be discussed at the meet expected to be held on Wednesday. The Empowered Committee of Secretaries (E-CoS) screened the Ashok Lavasa report on allowances at a June 1 meeting and has subsequently forwarded its suggestions to the Modi government. The Union cabinet will now deliberate on the suggestions of the Empowered Committee of Secretaries at the meeting this week.

What you should know about revised allowances under 7th Pay Commission

The E-CoS meet discussed House Rent Allowance (HRA) and an increase in basic pay among other concerns of Central government employees. The Empowered Committee of Secretaries has reportedly put a cap on HRA rates between 25 per cent and 27 per cent.

Demand by government employees

Central government employees have demanded that the HRA rates be left unchanged at 30 per cent, 20 per cent and 10 per cent depending on city category. The commission had recommended reducing the HRA to 24 per cent, 16 per cent and 8 per cent of the basic pay.

Favourable view

Some say that the committee on allowances headed by Ashok Lavasa had taken a favourable view of employees' demand on the HRA. The Ashok Lavasa panel submitted its review report to Arun Jaitley in April. The Union cabinet may choose to look into the Central government employees' concerns regarding the HRA. The allowances once implemented will benefit nearly 50 lakh government employees.

Story so far

The commission had suggested doing away with 53 of the 196 allowances drawn by Central government employees, besides subsuming another 36 smaller allowances into bigger ones. It also recommended doing away or merging allowances such as assisting cashier, cycle, condiment, flying squad, haircut, robe, shorthand, soap, spectacle, uniform, vigilance and washing.

Lowest ever pay hike

The pay hike of 14.27 per cent under the 7th Pay Commission is the lowest Central government employees have received in the last 70 years. The Union Cabinet recently approved modifications based on the commission's recommendations on the method of revision of pension of pre-2016 pensioners and family pensioners based on suggestions made by the Committee chaired by Secretary (Pensions).

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