7th Pay Commission: Big Update On HRA Hike For Central Government Employees, Here Is What Reports Say

New Delhi: Employees of the Central Government may be in for a big surprise in the coming months! The government may boost other allowances, such as House Rent Allowance (HRA), in the near future, said media reports.

The last time the HRA was raised was in July of 2021, when the DA passed the 25% barrier. The government had hiked the DA to 28 percent at the time. HRA is expected to be revised as DA is raised to new levels.

As per media reports, government employees' HRA (House Rent Allowance) may be increased soon and the employees will experience a considerable raise in their salary if the HRA increase goes into effect soon.

The category of the city in which government employees work determines their HRA. The three categories are X, Y, and Z. HRA is now paid at a rate of 27 percent of basic income to employees in the X category cities, and 18 percent to those in the Z category cities. Employees in the Z class currently receive a 9% HRA on their basic wage.

HRA is paid to central employees who fit into the X category at a rate of 27%. HRA for employees in the Y group will range from 18% to 20%, while HRA for employees in the Z class would rise from 9% to 10%.

How much will HRA increase?

HRA for government employees could increase by up to 3% in the foreseeable future. Employees in X Class cities may get a 3% increase in their HRA, while those in Y Class cities may see a 2% increase in their allowance.

Additionally, employees in Z class cities may receive a 1% raise in their HRA. As a result, the HRA for government employees will rise from 27% to 30% in the best-case scenario.

Dearness Allowance Hiked On March 2023

The Union Cabinet chaired by the Prime Minister, Narendra Modi, on March 24 gave its approval to release an additional instalment of Dearness Allowance to Central Governments employees and Dearness Relief to Pensioners with effect from 01.01.2023.  The additional instalment will represent an increase of 4% over the existing rate of 38% of the Basic Pay/Pension to 42 percent, to compensate against price rise.

The combine impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,815.60 crore per annum.  This will benefit about 47.58 lakh Central Governments employees and 69.76 lakh pensioners. This increase is in accordance with the accepted formular which is based on the recommendations of the 7th Central Pay Commission, the official statement had said.