7th Pay Commission: FM Jaitley may announce hike in allowances for central govt employees soon

New Delhi: With the second part of the Budget session kicking off from Thursday, expectations are widely rising that Finance Minister Arun Jaitley will make key announcements on allowances.

The Budget session continue till April 12, and a few media reports say that with Jaitley's announcement coming during the session, central government employees can expect to get revised allowances from the new fiscal in April.

It may be recalled that the Union Cabinet on June 29 cleared the recommendations of the 7th Pay Commission headed by AK Mathur in respect of the hike in basic pay and pension. However, the decision on 7th Pay Commission suggestions relating to allowances was referred to a Committee headed by the Finance Secretary Ashok Lavasa.

On February 22, union officials had held final round of talks with members of the Lavasa panel.

As per media reports, the Allowances Committee has revised the House Rent Allowance or HRA to 30%, up from 24% as suggested by the 7th pay panel.

The 7th Central Pay Commission (CPC) had recommended HRA at the rates initially from 24%, 16%, and 8 % and whenever DA reaches 50% it will be increased to 27%, 18% and 9%, The panel also said that s and when the DA reaches 100% theHRA will be revised to 30% , 20% and 10% for X,Y and Z cities respectively .

The pay commission also recommended doing away with 53 of the 196 allowances and merging a few others.

It is also reported that the committee has proposed to abolish 52 allowances, and subsume 36 allowances into existing allowances or proposed as new one. 12 Allowances are reported to have been proposed to be retained without changes, while the rest of the allowances have been tweaked little.