7th Pay Commission: Central govt employees rejoice as PM Modi, Arun Jaitley approve revision to HRA and other allowances
To the cheer of lakhs of central government employees, the Union Cabinet approved recommendations of the 7th Pay Commission on Wednesday (June 28). The recommendations were approved after making 34 modifications. The revised rates will take effect from 1 July 2017.
Prime Minister Narendra Modi, finance minister Arun Jaitley along with the rest of Union Cabinet took a call on the long-standing issue of House Rent (HRA) and other allowances for central government employees. Earlier, the Empowered Committee of Secretaries has handed over its proposals in this regard to him on June 1 which the finance minister tabled before the cabinet.
Word on the matter had been eagerly awaited for some time now, and all eyes were on PM Modi and his cabinet. Nearly 50 lakh central government employees will benefit from the revised allowance structure under the Seventh Pay Commission.
The matter had already been missed twice by the federal Cabinet this month on account of either Prime Minister Narendra Modi or finance minister Arun Jailtey being out of the country on separate foreign visits.
Earlier, the Seventh Pay Commission had recommended doing away with 53 of the 196 allowances, while also merging another 36 allowances. The pay commission also suggested reducing the house rent allowance (HRA) rates for government employees by 2-6 per cent for X, Y, Z cities. For metros, it suggested bringing down the HRA from 30 per cent to 24 per cent. However, these recommendations did not go down well with Central government employees.
The Modi government then constituted a committee under finance secretary Ashok Lavasa in July last year to review the recommendations on allowances.
Based on the findings, media reports suggest that the HRA rates are likely to be fixed at 27 per cent, 18 per cent and 9 per cent respectively for X, Y and Z cities.