7th Pay Commission allowances: Cabinet approves recommendations, revised rates effective from July 1

7th Pay Commission: The government had, in July last year, constituted a committee under Finance Secretary Ashok Lavasa to review the recommendations on allowances. The Union Cabinet will take a decision today.

By: Express Web Desk | New Delhi | Updated: June 29, 2017 8:45 am
7th pay commission, 7 pay commission, seventh pay commission, allowances, hra allowance, revised salary 7th pay commision, arun jaitley, 7th Pay Commission: Finance Minister Arun Jaitley at a press conference in New Delhi. PTI Photo

The 7th Pay Commission’s recommendations on Allowances was approved by the Union Cabinet on Wednesday after making 34 modifications. The revised rates will take effect from 1 July 2017. The revised allowances will benefit at least 47 lakh employees. The increased allowance will impose an additional annual burden of Rs 30,748 crore on the exchequer. The modification, which is based on the recommendations of Committee on Allowances, will result in an additional burden of Rs 1,448 crore over and above suggestions made by 7th Central Pay Commission.

Among the recommendations made by the 7th Pay Commission, house rent allowance will be at the rate of 27 per cent, 18 per cent and 8 per cent when the dearness allowance crossed 50 per cent and further increased 30 per cent, 20 per cent and 10 per cent when it crosses 100 per cent. Employee unions have demanded HRA at the rate of 30 per cent, 20 per cent and 10 per cent. Also Read: Here are all the approved recommendations cleared by Union Cabinet

The government has decided not to abolish 12 of the 53 allowances which were recommended to be abolished by the 7th Pay Commission. The decision to retain these allowances has been taken keeping in view the specific functional requirements of Railways, Posts and Scientific Departments such as Space and Atomic Energy. It has also been decided that 3 of the 37 allowances recommended to be subsumed by the 7th Pay Commission will continue as separate identities. This has been done on account of the unique nature of these allowances.

(Source: Cartoon by Mika)

The government also doubled the allowances to soldiers and officers posted in Siachen. Now, the soldiers posted in Siachen will get Rs 30000 per month as allowance. Earlier, they used to get Rs. 14000 per month. The officers will now get monthly allowance of Rs 42500, which was earlier Rs 21000.

The increased rate of allowances will affect central government employees, especially in the Defence services, CAPF and Coast Guard, staff of Railways, Postal department and nursing staff. So, the government has shown fiscal prudence and rationalised the total number of allowances from 197 to 128.  

The government had last year accepted the recommendation of Justice AK Mathur-headed Seventh Pay Commission in respect of the hike in basic pay and pension.

For allowances, the government had constituted a committee under Finance Secretary Ashok Lavasa to review the recommendations. This, following protests by government employees that the pay revision was not adequate. The panel submitted its report to the Department of Expenditure, which conducted the first round of review, following which it was presented before the Empowered Committee of Secretaries. The Committee then forwarded the report to the Cabinet. If the Cabinet does indeed take a decision today, government employees will see their July salary increase.

Key among the demands made by central government employees is a revision in the House Rent Allowance or HRA. As of now, the existing rates of HRA for Class X, Y and Z cities and towns are 30 per cent, 20 per cent and 10 per cent of an employee’s basic pay.

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