7th Pay Commission: Cabinet may meet on June 14 to decide on revised allowances for Govt employees

Highlights:

1. Finance Minister Arun Jaitley is likely to table the proposal for the revised allowance structure at the Cabinet meet on June 14, Wednesday

2. The Union Cabinet could not take the subject of allowances in its last meeting held on June 7

Prime minister Narendra Modi-led cabinet is likely to meet on Wednesday and is expected to take a decision on revised allowances under the 7th Pay Commission, India Today reported.  

Finance Minister Arun Jaitley is likely to table the proposal for the revised allowance structure at the Cabinet meet--the move will benefit nearly 50 lakh Central government employees, the report said. 

According to the report, the Union Cabinet could not take the subject of allowances in its last meeting held on June 7.

Central government employees, on several occasions, have expressed their disappointment over the long delay in rolling out revised allowances.

Last week, the Union Cabinet was expected to announce its decision on issues related to salary hike, House Rent Allowance (HRA), Dearness Allowance (DA) and Transport Allowance (TA) as per 7th Pay Commission. But, the meet with was postponed by the Cabinet,Zeebiz reported.

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Zeebiz in its earlier report quoting the Reserve Bank of India (RBI) had said," At the current juncture, global political and financial risks materialising into imported inflation and the disbursement of allowances under the 7th central pay commission’s award are upside risks."  

After the cabinet takes decision on revised allowances under the 7th Pay Commission on Wednesday, the Central government employees will start getting their revised allowances from July this year, India Today reported citing reports. 

Here are 9 key things to know about 7th Pay Commission report on revised allowances: 

1. The Central government, however, may not be keen on giving arrears on allowances, a demand repeatedly raised by employees, cited the news report. According to some reports, employee unions have planned protests if the demand of arrears on allowances is not met.

2. The 7th Pay Commission recommended axing 53 of the 196 allowances that Central government employees get besides merging 36 smaller allowances into bigger ones, the report said. 

3. The 7th Pay Commission also suggested bringing down the House Rent Allowance (HRA) rates for Central government employees by varying degrees depending on the type of city. For instance, the pay commission recommended reducing the HRA for metros from 30% to 24%.

4. The axing of allowances, and a slash in HRA rates by the 7th Pay Commission did not go down well with Central government employees.

ALSO READ: 7th Pay Commission update: Central govt employees may get revised allowances from July 18

5. A Committee on Allowances was formed under Finance Secretary Ashok Lavasa to review the recommendations of the 7th Pay Commission in July last year. The Lavasa panel submitted its report to Finance Minister Arun Jaitley on April 27 after missing two deadlines, the report said.

6. "Modifications have been suggested in some allowances which are applicable universally to all Central government employees as well as certain other allowances which apply to specific employee categories," the report said citing the Finance Ministry statement as stating a day after Lavasa panel submitted its report.

7. The Ashok Lavasa report was sent to the Department of Expenditure for a first round of review before being placed before the Empowered Committee of Secretaries (E-CoS) for another round of screening.

8. Representatives of Central government employees wrote to Cabinet Secretary P K Sinha and said that employees were clueless about the recommendations of the Ashok Lavasa Committee on Allowances. They also expressed anguish over inordinate delay in implementation of the Lavasa panel's report, India Today reported. 

9. After screening the Ashok Lavasa report on allowances, the Empowered Committee of Secretaries (E-CoS) forwarded the report along with its suggestions to the government after a June 1 meeting. Central government employees are now waiting for the good news on allowances.

ALSO READ: RBI once again flags 7th Pay Commission implementation as inflation risk