The Union Cabinet is likely to take a call on the allowance structure of central government employees soon after Prime Minister Narendra Modi returns from his four-nation foreign visit. This could come to pass on June 7, media reports suggest.
The recommendations of Committee on Allowances, led by Finance Secretary Ashok Lavasa, were to be taken up in a meeting of the Empowered Committee of Secretaries (E-CoS) scheduled yesterday (June 1).
Yesterday's meeting focused on House Rent Allowance (HRA) rates. The 7th Central Pay Commission had brought down the HRA to 24 per cent, 16 per cent and 8 per cent for Class X, Y and Z cities respectively, which had the central government employees miffed.
The pay panel had also suggested that the HRA rates should be revised to 27 per cent, 18 per cent and 9 per cent when DA crossed 50 per cent, and further increased to 30 per cent, 20 per cent and 10 per cent when DA went beyond 100 per cent. This is the first time a Pay Commission has called for a decline in HRA rates, central government employee unions have claimed .
The 7th pay commission had recommended that 52 out of a total of 196 allowances should be scraped completely and 36 allowances should be subsumed under existing ones instead of being treated as separate identities. The Lavasa Committee was formed to look into these changes regarding allowances and to address the representations sent in by various staff associations and ministries.
The Lavasa Committee handed over its review report to Finance Minister Arun Jaitley on April 27, a little behind the stipulated time frame. After being examined by the Department of Expenditure, the report was forwarded to Empowered Committee of Secretaries (E-CoS) for consideration and consolidation.
After the yesterday meeting, the ball is now in the Cabinet's court. Meanwhile, central government employees can expect to see an end of the suspense hanging about the reformed allowance structure for almost one year now.