7th Pay Commission: Final report on allowances to be placed before Cabinet today; will govt employees get HRA hike of upto 178%?

Reports are pouring that the Empowered Committee of Secretaries is ready to submit its report on allowances to the Cabinet.

New Delhi: The long-awaited decision on allowances as recommended by the 7th Pay Commission might be taken up by the Union Cabinet on Friday with media reports pouring that the Empowered Committee of Secretaries (E-CoS) is ready to submit report to the Cabinet.

The E-CoS has been screening the suggestions of the Ashok Lavasa committee report before sending it to the Cabinet for approval.

The Lavasa Committee on April 28 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.

In the month of April, the Union Cabinet approved important proposals relating to modifications in the 7th CPC (Central Pay Commission) recommendations on pay and pensionary benefits in the course of their implementation.

If the committee retains the exiting HRA rates (as per 6th Pay Commission) then the HRA component of central government employees will increase ranging between 157 percent and 178 percent.

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).

The benefit of the proposed modifications will be available with effect from 1st January, 2016, i.e., the date of implementation of 7th CPC recommendations. With the increase approved by the Cabinet, the annual pension bill alone of the Central Government is likely to be Rs 1,76,071 crore.

There are about 47 lakh central government employees.

While recommendations of the CPC on pay and pension were implemented with the approval of the Cabinet, allowances continued to be paid at old rates.

The CPC had recommended that of a total of 196 allowances, 52 be abolished altogether and 36 be abolished as separate identities by subsuming them in another allowance.