7th Pay Commission allowances: What next after submission of Lavasa panel report

New Delhi: After the submission of Lavasa panel report, expectations are high that the 10-month long wait of central government employees and pensioners for allowances is likely to end soon.

As per media reports, representatives of central government staff unions are likely to meet top government officials today (May 03) to take stock of the progress made on the allowances report. Finance Ministry officials are also expected to take part in the meeting. The leaders are also likely to enquire about the arrears and house rent allowance (HRA) rate.

A high-level committee headed by the Finance Secretary, Ashok Lavasa had on last Thursday (April 27) submitted its report to Finance Minister Arun Jaitley.

The report is being currently examined by the Department of Expenditure. It will be placed before the Empowered Committee of Secretaries (E-CoS) set up to screen the 7th CPC recommendations and to firm up the proposal for approval of the Cabinet.

The Lavasa Committee has suggested modifications in some allowances applicable universally to all employees and also for those in specific categories, including railways and defence, after examining the 7th Pay Commission recommendations.

"Modifications have been suggested in some allowances which are applicable universally to all employees as well as certain other allowances which apply to specific employee categories such as railwaymen, postal employees, scientists, defence forces personnel, doctors, nurses etc," the finance ministry has said in a statement last week.

The committee on allowances has reportedly given its view in favour of AK Mathur-led 7th Pay Commission recommendation, regarding decrease in house rent allowance (HRA) by 2-6 percent depending on type of cities.

The 7th Pay Commission headed by AK Mathur had earlier proposed the rate of House Rent Allowance (HRA) at 24 percent, 16 percent and 8 percent of the Basic Pay for Class X, Y and Z cities respectively.

The Commission had also recommended that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent.

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 government accepts the bare recommendations of A K Mathur-led 7th Pay Commission then the HRA component of central government employees will increase ranging between 106 percent and 122 percent.

Take, for instance, 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.

Now, 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 4,320 per month, that is 106 percent more than the existing level.

Similarly, 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 60,000, meaning a hike of 122 percent.