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7th Pay Commission: Central government employees to receive revised allowances from July?

The Cabinet skipped the issue of allowances in its meeting earlier this week. However, the matter is likely to be taken up soon after FM Arun Jaitley returns to India.

BT Online   New Delhi     Last Updated: June 9, 2017  | 17:18 IST
7th Pay Commission: Central government employees to receive revised allowances from July?

Central government employees will have to bear with the year-long suspense hanging over 7th Pay Commission allowance rates at least for the coming week. The issue is likely to be part of the agenda for next Union Cabinet meeting, most probably next Wednesday.

The wait, as of now, is for the Finance Minister Arun Jaitley to return to India. Jaitley is on a four-day visit to Paris to participate in the Organisation for Economic Co-operation and Development (OECD) meeting.

Meanwhile, a report in the Financial Express said that the central government employees could get the revised allowances, including for house rents (HRA), from July onwards as part of their salary.

The issue of allowance reforms suggested by the 7th Central Pay Commission was not taken up in the last Cabinet meeting on June 7 as it was not part of the agenda. Central government employees are banking on this meeting to end their wait for allowance rates. New allowances, including House Rent Allowance (HRA), could be implemented as early as the third week of June, some reports claimed.

Central government employees are most concerned about HRA, which the 7th Pay Commission recommended to be reduced. HRA rates could be capped at 27 per cent of the basic pay for Class X cities, which have a population exceeding 50 lakhs, as opposed to the 30 per cent awarded by the 6th Pay Commission.

ALSO READ: 7th Pay Commission: Central government employees clueless about allowance

The 7th Pay Commission has recommended HRA should be brought down to 24 per cent. The Empowered Committee of Secretaries (E-CoS) capped it between 25 per cent and 27 per cent after reviewing suggestions by Committee on Allowances.

Central government employees are in for better returns even with the slightly lowered HRA rates, owing to the increase in basic pay almost by 25 per cent.
The Ashok Lavasa Committee had reviewed the recommendations of 7th Pay Commission pertaining to allowances on orders from the Cabinet. It submitted its findings to Jaitley on April 27 and was later taken up by E-CoS. The proposals by committee of secretaries based on its deliberations over the Lavasa Committee recommendations was handed over to the Finance Minister on June 1 and was set to be presented before the Cabinet for approval.

Moreover, in its meeting last Wednesday, the Monetary Policy Committee had pointed out that payouts under the 7th Pay Commission's awards would boost consumption fuelling inflation.

ALSO READ: Central govt employees pay hike: Staff body to wait for 7th Pay Commission update

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