7th Pay Commission allowances get government nod, revised rates effective from July 1

7th Pay Commission Allowances: The decision to retain these allowances was taken keeping in view the specific functional requirements of Railways, Posts and scientific departments like Space and Atomic Energy, a government statement said.

By: Express News Service | New Delhi | Updated: June 29, 2017 4:20 pm
7th pay commission, 7 pay commission, seventh pay commission, allowances, hra allowance, revised salary 7th pay commision, arun jaitley, Finance Minister Arun Jaitley (File)

The government on Wednesday gave its approval to the recommendations of the seventh Central Pay Commission after making 34 modifications, including a decision to retain 12 of the 53 allowances that were proposed to be abolished. The Union Cabinet accepted the modifications suggested by a Committee on Allowances set up by the government last year following the submission of the seventh pay commission report and an Empowered Committee of Secretaries constituted to screen the recommendations.

The implementation of the pay commission recommendations will cost the government an estimated Rs 30,748 crore per year. This is slightly more than the Rs 29,300 crore per year projected by the pay commission report. The extra Rs 1,448 crore accounts for the payment of allowances that the government has decided to retain against the advice of the pay commission. The decision to retain these allowances was taken keeping in view the specific functional requirements of Railways, Posts and scientific departments like Space and Atomic Energy, a government statement said. It is likely to benefit about 1 lakh employees working in these departments.

Most of the modifications, including retention of these allowances, relate to “continuing requirement” of existing arrangements, administrative exigencies and further rationalisation of allowance structure, it said.Decisions that would benefit all government employees include an increase in the children education allowance from Rs 1,500 per month a child to Rs 2,250 to a maximum of two children. Hostel subsidy has also been hiked from Rs 4,500 per month to Rs 6,750 per month. Similarly, special allowance for child care for women with disabilities has been doubled from Rs 1,500 per month to Rs 3,000 per month. Higher Qualification Incentive for civilian employees, in the form of a grant, has been raised from the bracket of Rs 2,000-10,000 to Rs 10,000-30,000.

Decisions that would benefit all government employees include an increase in the children education allowance from Rs 1,500 per month a child to Rs 2,250 to a maximum of two children. Hostel subsidy has also been hiked from Rs 4,500 per month to Rs 6,750 per month. Similarly, special allowance for child care for women with disabilities has been doubled from Rs 1,500 per month to Rs 3,000 per month. Higher Qualification Incentive for civilian employees, in the form of a grant, has been raised from the bracket of Rs 2,000-10,000 to Rs 10,000-30,000.The government has also decided that the house rent allowance would not be less than Rs 5,400 in X category of cities (with population of 50 lakh and above), Rs 3,600 in Y category (with population between 5 and 50 lakh) and Rs 1,800 in Z category (with population below 5 lakh). Currently, HRA is paid at the rate of 30 per cent of basic salary for X category, 20 per cent for Y category and 10 per cent for Z category of cities. The pay commission had recommended that these rates be reduced to 24 per cent, 16 per cent and 8 per cent, respectively. But the government calculated a floor rate to protect the interests of employees in lower pay bracket, the statement said. This move is expected to benefit nearly 7.5 lakh employees, it said.

The government has also decided that the house rent allowance would not be less than Rs 5,400 in X category of cities (with population of 50 lakh and above), Rs 3,600 in Y category (with population between 5 and 50 lakh) and Rs 1,800 in Z category (with population below 5 lakh). Currently, HRA is paid at the rate of 30 per cent of basic salary for X category, 20 per cent for Y category and 10 per cent for Z category of cities. The pay commission had recommended that these rates be reduced to 24 per cent, 16 per cent and 8 per cent, respectively. But the government calculated a floor rate to protect the interests of employees in lower pay bracket, the statement said. This move is expected to benefit nearly 7.5 lakh employees, it said.

A range of additional benefits for defence personnel, including those working in central paramilitary forces, has also been approved. This includes an increase in Siachen allowance and high altitude allowance, and retention of ration money allowance.

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