7th Pay Commission - All eyes on Cabinet Meeting Today - Will Govt Employees suffer HRA loss of Rs 15,000

7th Pay Commission – All eyes on Cabinet Meeting Today – Will Govt Employees suffer HRA loss of Rs 15,000

All eyes would be on the Union Cabinet today which is likely to take up the issue of revised allowances and HRA as per the 7th Pay Commission. After several reports suggested that central government employees would get revised allowances from July onwards, it is to be seen if the Cabinet takes up the matter and discusses the issue today.

The tentative date fixed is for June 14 that is today, when the Cabinet will take a final decision on the E-CoS report. The E-CoS was set up to screen the Lavasa panel’s recommendations on allowances and it had submitted its report last week to the Cabinet for final approval.

The Empowered Committee of Secretaries has reportedly given its view in favour of AK Mathur-led 7th Pay Commission recommendation, regarding decrease in house rent allowance (HRA) by 2-6 percent depending on type of cities.

The Commission headed by AK Mathur had earlier proposed the rate of House Rent Allowance (HRA) at 24 percent, 16 percent and 8 percent of the Basic Pay for Class X, Y and Z cities respectively.

The Commission had also recommended that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent 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 percent, 20 percent and 10 percent of Basic pay (pay in the pay band plus grade pay)

The two options

If the government accepts the bare recommendations of A K Mathur-led Commission then the HRA component of central government employees will increase ranging between 106 percent and 122 percent.

A central government employee at the very bottom of the pay scale under 6th Pay Commission was till now entitled to an HRA of Rs 2,100 on basic pay of Rs 7,000 (basic pay that includes pay of pay band + grade pay) in a Class X city. It is to be noted that government, while implementing the 7th Pay Commission in June last year had made it clear that till the final outcome of allowances committee is being placed, the employees would be getting the allowances as per 6th Pay Commission.

Now, as per 7th Pay Commission, the new entry level pay at this level is Rs 18,000 per month against which the new HRA for a Class X city would be Rs 4,320 per month, that is 106 percent more than the existing level.

Similarly, at the highest level of the pay scale, the Cabinet Secretary and officers of the same rank have a basic pay of Rs 90,000, which means they are entitled to current HRA of Rs 27,000 in Class X towns. After the revised pay scale, the new basic pay is Rs 2.5 lakh, for which the HRA would be Rs 60,000, meaning a hike of 122 percent.

What is the second option

If the government retains the exiting HRA rates as per 6th Pay Commission then the HRA component of central government employees will increase ranging between 157 percent and 178 percent.

Now, as per 7th Pay Commission, the new entry level pay at this level is Rs 18,000 per month against which the new HRA for a Class X city would be Rs 5,400 per month, that is around 157 percent more than the existing level.

Source: Zeenews