7th Pay Commission: Cabinet approves HRA recommendations; heres what it means for employees

Union Cabinet on Wednesday gave final nod to recommendations of 7th Pay Commission on allowance. 

Finance Minister Arun Jaitley while speaking with media announced that Cabinet has approved the recommendations under 7th Pay Commission with 34 modifications. Also, he said that revised rates will be effective from July, 2017. 

According to Ministry of Finance, 7th CPC will benefit 34 lakh civilian employees and 14 lakh Defence Forces personnel. It has examined 197 allowance, recommending abolition of 53 allowance and subsuming 37 in others. Also, 7th CPC recommended revised rates commensurate with Dearness Allowance. 

As per the Ministry, Risk & Hardship Matrix evolved for allowances linked to risk and hardship. 

"7th CPC projected additional financial implication at Rs 29,300 crore per annum, modifications to have additional implication of Rs 1448.23 crore. Combined additional financial implication estimated at Rs 30,748.23 crore per annum," the Ministry said. 

Much awaited house rent allowance (HRA) will be paid at 24%, 16% and 8% for X, Y, Z cities respectively. HRA not to be less than Rs 5400, Rs 3600 and Rs 1800 for X, Y, Z cities at 30%, 20%, 10% of minimum pay of Rs 18,000. 

This is expected to benefit for more than 7.5 lakh employees.

Moreover, 7th CPC recommended revision of HRA when Dearness Allowance reaches 50% and 100%, the government has decided to revise rates when DA crosses 25% and 50% respectively. 

The 7th Pay Commission had recommended HRA too be fixed at 24%, 16% and 8% depending on the cities employees work in. But, central government employees demanded 30%, 24% and 16% HRA.

Looking at the high protest by the employees, FM Jaitley last year formed a committee under the leadership of Finance Secretary Ashok Lavasa to look into matter. After several months, Lavasa panel  submitted its recommendation report in April suggesting HRA to be fixed at between 25% and 27%.

Under the 7th Pay Commission, nearly 200 allowances have been subsumed into a smaller batch.

Siachen Allowance

According to Ministry of Finance, the rates of Siachen Allowance has increased from Rs 14,000 per month for soldiers to Rs 30,000. For officers the allowance has be raised from Rs 21,000 per month to Rs 42,500 per month for extreme risk and hardship. 

For Nurses and Ministerial Staffs of Hospitals:

The government has increased rate of Nursing Allowance from Rs 4800 per month to Rs 7200 per month. The Operation Theatre Allowance increased from Rs 360 per month to Rs 540 per month.

Further, the hospital patient care allowance or Patient care allowance rose from Rs 2070-Rs 2100 per month to Rs 4100-Rs 5300 per month. However, 7th CPC recommendations modified and HPCA/PCA to continue for Ministerial staff. 

For pensioners

The fixed medical allowance for pensioners increased from Rs 500 to Rs 1000 per month. Also, the constant attendance allowance on 100% disablement increased from Rs 4500 to Rs 6750 per month.