Published On: Wed, Aug 3rd, 2016

7th Pay Commission: Govt to soon hike HRA

New Delhi: The government is likely to hike sufficient House Rent Allowance (HRA) of central government employees soon, despite increasing 14.27 per cent in basic pay, the lowest in 70 years.

Ashok Lavasa Finance Secretary

The Cabinet decided to constitute a Committee headed by Finance Secretary Ashok Lavasa for further examination of the recommendations of 7th Pay Commission on allowances.

As per the notification and resolution, central government employees will receive an average 14.27 per cent hike in basic pay effective from January 1, 2016.

The Finance ministry Office Memorandum No.1-5/2016-IC also said on Friday, “The 7th Pay Commission arrears shall be paid in cash in one installment along with the payment of salary for the month of August 2016.”

The HRA hike could happen after the Monsoon Session of Parliament including all allowances, sources said.

The Cabinet decided to constitute a Committee headed by Finance Secretary Ashok Lavasa for further examination of the recommendations of 7th Pay Commission on allowances including HRA, transport allowance, when the cabinet approved 7th Pay Commission proposal. It will complete its work in a time bound manner within four months.

“The Finance Secretary committee will have carefully weigh the risk of doing to raise the allowances of the central government employees against the risk of economy can afford. Accordingly, they will go for ditto, the 7th pay commission recommendations for allowances, however, it could be a slight change, but not overall,” a Finance Ministry official told The Sen Times on condition of anonymity.

He confirmed, it could happen after the Monsoon Session of Parliament.

The pay commission has recommended the rates HRA for these cities to 24%, 16% and 8% respectively of new pay matrix.

The Commission also recommended, that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent respectively when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent.

The existing rates of HRA for Class X, Y and Z cities and towns are 30%, 20% and 10% of Basic pay (pay in the pay band plus grade pay).

TST

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