7th Pay Commission: Cabinet approves recommendations on allowances, roll-out from July 1: 20 points

7th Pay Commission saga is yet to conclude, as employee forum claims their most integral demand - hike in minimum wages - is yet to be addressed by Centre. "If required, we will approach PM Modi," said top union leader Shiv Gopal Mishra while speaking to India.com.

Published: June 29, 2017 12:57 AM IST

By Mohammed Uzair Shaikh

7th Pay Commission: Cabinet approves recommendations on allowances, roll-out from July 1: 20 points
Govt sympathises with flat buyers (File image/PTI)

New Delhi, June 28: After a delay of nearly 18 months, the 7th Pay Commission, in absolute effect, has been implemented for the central government employees. The Union Cabinet on Wednesday approved the revised recommendation on allowances, with 34 modifications. The hike in allowances would be rolled out from July 1, confirmed Finance Minister Arun Jaitley.

The additional cost on exchequer, due to the revised hike in allowances, is pegged at Rs 30,748 crore. The impact would be partially less in this financial year, as arrears on allowances would not be provided to the employees.

The decision on House Rent Allowance (HRA) is considered to be the highlight of the slew of recommendations approved by the Cabinet. The HRA, at 8, 16, 24 per cent would be increased to 10, 20, 30 per cent after the Dearness Allowance (DA) crosses 25 per cent of the basic pay. The Pay Commission had originally recommended the increase in HRA only if the DA crosses 50 per cent mark.

Here are 20 major points related to the approval of 7th Pay Commission recommendations:

– The increase in HRA was one of the centrifugal demands raised by unions. Both 5th and 6th Pay Commission had recommended the HRA to be 30, 20 and 10 per cent for class X, Y and Z cities respectively. However, the 7th Pay Commission report, prepared by Justice (retd) AK Mathur-led panel, had reduced to HRA to 8, 16 and 24 per cent. It had further recommended the HRA to be increased to 10, 20 and 30 per cent only when DA crosses 5o per cent of basic pay. The recommendation was modified today by Union Cabinet, acting upo9n the recommendation made by Committee of Allowances (CoA), headed by Finance Secretary Ashok Lavasa.

– In addition to lowering the DA limit for increase in HRA, the Cabinet also approved the recommendation of fixing the HRA at 10, 20 and 30 per cent for those drawing minimum salaries of Rs 18,000. They will not get HRA less than Rs 1800, 3600 or 5400, depending upon the class of city where the employee is stationed.

– HRA is currently paid at the rate of 30 per cent for class X cities (population of 50 lakh & above), 20 per cent for Y (5 to 50 lakh) and 10 per cent for Z (below 5 lakh) category of cities. The allowance benefits more than 7.5 lakh central government employees.

– The National Joint Council of Action, which has been leading the negotiation on behalf of central government employees, expressed satisfaction over the decision taken by Cabinet. “The decision to keep HRA at 10, 20 and 30 per cent for those drawing minimum salary should be lauded. It was one of our key demands,” NJCA convenor Shiv Gopal Mishra told India.com.

– The top union leader also appreciated the decision of Cabinet to approve the increase in HRA with DA crossing 25 per cent mark, rather than the original recommendation of Pay Commission, which said the HRA would increase only when the DA crosses 50 per cent of the basic pay.

– However, the employee forum said the benefit of HRA at 10, 20, 3o per cent should not be restricted to Group D employees (those drawing minimum salary), but also be provided to those placed under Group C.

– Apart from HRA, other key allowances which were modified by Centre include Medical Pension Allowance and the Siachen Allowance, apart from others.

– The Medical Pension Allowance has been doubled from Rs 500 to Rs 1,000. The Constant Attendance Allowance has also been increased from Rs 4,500 to Rs 6, 750 in case of 100 per cent disability.

– Rate of Children Education Allowance has been increased from Rs 1500 per month for each child (maximum 2) to Rs 2250 per month for each child (max.2). Special Allowance for Child Care for Women with Disabilities has been doubled from ₹1500 per month to ₹3000 per month.

– For the defence personnel, a number of allowances have been increased, including Technical Allowance (Tier – I & II), Commando Battalion for Resolute Action, Counter Insurgency Ops (CI Ops) Allowance, Ration Money Allowance (RMA), Deputation (Duty) Allowance, along with Siachen and Tough Location Allowance. Check complete details here.

– For Railway employees, one separate allowance – Additional Allowance – has been increased from Rs 500-1000 per month to Rs 1125-2250 per month. The benefits have also been extended to Loco Pilot Goods and Senior Passenger Guards, who would be provided Rs 750 per month.

– A new allowance has also been approved for the Railway employees, Special Train Controller’s Allowance – which would be provided at Rs 5,000 per month.

– Overall, the government has retained 108 allowances, whereas, 34 have been subsumed and 43 scrapped. The Pay Commission had originally recommended the abolition of 53 allowances and subsumption of 36 others.

– Employee forum remained satisfied with the number of allowances retained by Centre. “The decision was taken only after discussion with us. We have no objection towards it,” NJCA chief said.

– The 7th Pay Commission’s implementation was awaited by employees since January 1, 2016, the scheduled date for approval. However, the implementation of Justice (retd) AK Mathur’s report on 7CPC was delayed till July 3, 2016. Centre had hiked only the basic component of the salaries last year, owing to the anomalies raised by unions in respect to allowances.

– To address the anomalies raised by NJCA, Centre assigned a high-level panel under Finance Secretary Ashok Lavasa. The committee was provided a period till November 2016 to submit its report. However, after multiple delays, the report was finally submitted in April 2017.

– After the report was screened by Empowered Committee of Secretaries, led by Cabinet Secretary, it was submitted to the Union Cabinet. The matter was taken up for discussion in today’s meeting, in the presence of both Prime Minister Narendra Modi and Finance Minister Jaitley.

– However, the 7th Pay Commission saga is yet to conclude, as employee forum claims their most integral demand – hike in minimum wages – is yet to be addressed by Centre.

“We will speak again to the Cabinet Secretary on minimum wages. Rs 18,000 is inadequate. If required, we will also meet Prime Minister Narendra Modi,” Mishra said.

Also Read:

For breaking news and live news updates, like us on Facebook or follow us on Twitter and Instagram. Read more on Latest India News on India.com.

By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts Cookies Policy.