The union cabinet granted a wish long overdue when it convened yesterday. The Narendra Modi-led Cabinet approved the allowance structure awarded by the Seventh Central Pay Commission (CPC) for central government employees.
Every allowance revised has been increased than what the preceding pay panel ordained. The 7th Pay Commission had predicted the combined additional financial implication at Rs 30,748.23 crore per annum.
The only allowance slashed down is House Rent Allowance (HRA), which constitutes a substantial part of central government employees' salaries. There has also been no word on arrears expected to be paid to government staff on modified allowance rates.
This will be first time that a Pay Commission has decreased HRA rates ever. The Justice AK Mathur-led pay panel had recommended HRA rates to be pegged at 24 per cent, 16 per cent and 8 per cent of basic pay against 30 per cent, 20 per cent and 10 per cent under the 6th Pay Commission.
This will be less bothersome owing to the increase in basic pay hike and increase in other allowances approved by the Cabinet. This move may even fend off the expected rise in inflation Reserve Bank of India expected Indian economy to go through after new awards under 7th Pay Commission were implemented.
Here's a look at what changes have been approved by the Cabinet in the allowance structure:
House Rent Allowance
Much has been expected by the central government employees on House Rent Allowance (HRA) which constitutes the bulk of their salaries. 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.
This will be first time ever that HRA has been brought down. The previous pay panel had pegged HRA rates at 30 per cent, 20 per cent and 10 per cent of the basic pay.
The HRA rates will be revised when Dearness Allowance (DA) crosses 25 per cent and 50 per cent respectively. The new rates will benefit more than 7.5 lakh employees.
Allowances for defence personnel
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.
Allowance to pensioners
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.
Allowances to nurses and ministerial staff in hospitals
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.