The complete benefits of Seventh Central Pay Commission will reflect in the salaries of central government employees from July onwards. The government is likely to notify the Cabinet decision on allowance hike this week, reports suggest.
The chnages will be effective from July 1, 2017 and will benefit 48 lakh employees in total, 34 lakh civilian employees and 14 lakh military employees.
The Union Cabinet approved the reforms in allowance structure for central government employees on June 28, which will be put into effect after it is notified in the Official Gazette. The Cabinet had given the green flag to the hike in salaries and pensions ofr central government employees last year in August, but stepped back on allowances considering the extensive modifications suggested by the pay panel.
The Cabinet also retained 12 allowances out of 53 allowances that the pay panel recommended to be abolished. Three out of 37 allowances, that the 7th Pay Commission suggested to be subsumed with another allowances, will continue as separate entities on account of their unique nature.
In its decision, the Cabinet has approved higher allowance rates in most cases except House Rent Allowance (HRA), which forms a substantial part of the central government employees' salaries. HRA will now be be paid at 24 per cent, 16 per cent and 8 per cent for Class X, Y, and Z cities respectively.
Even with the decline in HRA rates the central government employees will see a hike in allowances owing to the increase in their basic pay implemented under 7th Pay Commission.
The Cabinet approved HRA at 24 per cent, 16 per cent and 8 per cent of basic pay for Class X, Y and Z cities respectively. It will not be less than Rs 5,400, Rs 3,600 and Rs 1,800 every month calculated at 30 per cent, 20 per cent and 10 per cent of minimum pay of Rs 18,000.
These rates will be revised to 27 per cent, 18 per cent and 9 per cent when Dearness Allowance crosses 50 per cent, and then to 30 per cent, 20 per cent, 10 per cent then it goves over 100 per cent, benefiting more than 7.5 lakh employees.
Allowances paid under Siachen Allowance have been increased to Rs 30,000 per month for soldiers and Rs 42,500 per month for Army officers for extreme risk and hardship. Earlier Rs 14,000 were paid to soldiers and Rs 21,000 to officers every month under this head.
The Union Cabinet increased Fixed Medical Allowance for pensioners to Rs 1,000 per month from Rs 500 per month that was paid earlier. Constant Attendance Allowance on 100 per cent disablement has also been increased from Rs 4,500 to Rs 6,750 per month.
Nursing Allowance has been increased to Rs 7,200 per month from Rs 4,800 per month, whereas Operation Theatre Allowance has been hiked to Rs 540 per month. Hospital Patient Care Allowance/Patient Care Allowance (HPCA/PCA) will now be Rs 4,100 to Rs 5,300 per month.
With the new allowance structure, the 7th Pay Commission had predicted the combined additional financial implication at Rs 30.8 thousand crore per annum. The Justice AK Mathur-led pay panel had also recommended revised allowance rates proportionate to DA paid to central government employees.