New Delhi, June 17: The Union Cabinet is all set to take up the proposals on Higher Allowances and House Rent Allowance under 7th Pay Commission by next week, Shiv Gopal Mishra, the chairman and convenor of National Joint Council of Action (NJCA), said to NDTV. The leader of India’s biggest employee union also said that there is a possibility that the Union Cabinet may take a decision of increasing the HRA than that was recommended by the 7th Pay Commission. On Wednesday the Union Cabinet did not take up the proposals related to 7th Pay Commission allowances, including the HRA, as it was not the part of the Cabinet meeting. Right now Finance Minister Arun Jaitley is on an official tour to South Korea, as soon as he will arrive in India a meeting will be held to take a final call on the pending issue.
After the nod is clear, nearly 50 lakh central government employees could get revised allowances under 7th Pay Commission award. including the HRA and higher allowances, from July. A report that appeared in Financial Express said that the Cabinet may decide on allowances under the 7th Pay Commission this month. The report further said that the government may approve higher HRA than recommended by the 7th Pay Commission.
On April 27, the Ashok Lavasa committee, which examined the 7th Pay Commission’s recommendations on allowances, submitted its final report to Finance Minister Arun Jaitley. After which Empowered Committee of Secretaries reviewed the report and firm up proposals for the Cabinet.
However, the Lavasa committee suggested some modifications in some allowances that are applicable universally to all employees as well as certain other allowances. Some reports also suggest that the increase in higher allowances is expected to give a further boost to consumer spending and thus the broader economy.
The 7th Pay Commission headed by Justice AK Mathur committee had recommended that the house rent allowance must be paid at the rate of 24 per cent, 16 per cent and 8 per cent of the new basic pay, depending on the type of city. The committee had also recommended that the rate of HRA must be revised to 27 per cent, 18 per cent and 9 per cent when the Dearness Allowance crosses 50 per cent and further revised to 30 per cent, 20 per cent and 10 per cent when it crosses 100 percent. The NJCA on the other side had demanded that the HRA must be paid at the rate of 30 per cent, 20 per cent and 10 per cent.
The Mathur committee had also recommended hat out of a total of 196 allowances, 52 must be abolished altogether and 36 must be subsumed as seperate identities. The decision on HRA and higher allowances will benefit over 55 lakh pre-2016 civil and defence pensioners and family pensioners.