7th Pay Commission: Union Cabinet approves recommendations on allowances
The year-long wait of central government employees concluded on Wednesday, with the Union Cabinet approving the revised 7th Pay Commission recommendations on allowances. The final decision of allowances was approved by the Cabinet in the meeting on Wednesday, Finance Minister Arun Jaitley confirmed.
The approval on allowances come nearly 3 months after the committee headed by Finance Secretary Ashok Lavasa submitted its report on revisions, after taking into account the concerns raised by employee unions. Although the recommendations of Lavasa committee were kept secretive, top union leader Shiv Gopal Mishra claimed that it recommended an increase in House Rent Allowance (HRA) by 3 per cent, if the Dearness Allowance (DA) crosses 25 per cent of the basic pay.
According to union leader Shiv Gopal Mishra, the House Rent Allowance (HRA) would be increased if the Dearness Allowance crosses 25 per cent of the basic pay. “The Lavasa committee had suggested the change in relations to HRA. Originally, the HRA was to be increased if DA crosses 50 per cent of basic pay. But now, the HRA would be raised by 3 per cent, when DA crosses 25 per cent of the employee’s basic pay,” Mishra told India.com.
The hike in allowances is expected to be rolled out along with salary for the month of July. With the approval of 7CPC recommendations in relation to allowances, central government employees would be able to realise a complete hike of 23.8 per cent. In July last year, the government had only increased the basic component of the salaries, which raised their pay by roughly 14.3 per cent.
“A total of 108 allowances have been retained, 34 subsumed and 43 retained. The Pay Commission had recommended the abolition of 56 allowances,” Finance Minister Jaitley said, further confirmed that allowance hike would be come into effect from July 1, 2017.