Mumbai, April 2017: With the Lavasa committee coming out with its recommendations for major changes in the implementation of the seventh pay commission, major changes in the salaries of central government employees are expected. The hike after the rollout of the recommendations will be significant in comparison to the rates of the 6th pay commission. Also Read - Good News! Minimum Wage to Jump as Centre Brings Wage Code

While there has been an extended delay in the final report of the Lavasa committee’s recommendations, it has mainly looked towards revising key allowances such as the HRA, while at the same time abolishing or subsuming various non-essential allowances like acting, assisting cashier, cycle, condiment, flying squad, haircutting, rajbhasha, rajdhani, robe, shoe, shorthand, soap, spectacle, uniform, vigilance and washing allowances. Also Read - DA Hike Announcement: Sensex, Nifty Skyrocket Ending Six-Day Losing Streak



Under the 6th pay commission, the 6th Pay Commission recommended, the current rate of HRA stands at 30%, 20% and 10% based on the city in which the employee resides in. In turn, cities are classified as X, Y or Z  based upon the number of people residing in them. Also Read - 7th Pay Commission Latest News: Haryana Govt Announces 6% Hike in DA For NHM Employees

On the other hand, the Dearness Allowance (DA) was admissible at 2, 6, 9, 12 & 16 % from 1-7-2006, 1-1-2007, 1-7-2007, 1-1- 2008 & 1-7-2008, respectively. However, the Lavasa committee has recommended that the existing rates for the House Rent allowance be changed both upon the city of residence as well the rates of DA.



As per this provision, the Lavasa Committee has proposed that the HRA under the seventh pay commission be revised to a rate of 24 per cent, 16 per cent and 8 per cent of the current basic pay, depending on whether the employee is residing in an X, Y or Z class city.

Further, wherever the Dearness Allowance crosses 50 percent, the committee has recommended that the HRA be given at a rate of 27 per cent, 18 per cent and 9 per cent. In cases where the DA crosses 100 percent, the proposed rates for the HRA are 30 per cent, 20 per cent and 10 per cent.

The basic salaries of central government employees have increased significantly under the seventh pay commission. Based on the Aykroyd formula, the entry level salaries of employees has been increased from Rs 6000 to Rs 18,000. Similarly, at the apex level, basic salaries have gone up from Rs 80,000 to Rs 2,25,000 per month.

This means that with the addition of the various allowances, salaries of all employees will go up by a minimum of 106 percent to a maximum of 122 percent after the implementation of the latest allowances.  In addition, various new insurance policies will be brought in for the benefit of the central government employees. The final report of the lavasa committee’s recommendations is expected to come later during the week.