After much delay, the Committee on Allowances constituted by Finance Minister Arun Jaitley under Finance Secretary Ashok Lavasa to look at claims of allowances like House Rent Allowance (HRA), Dearness Allowance (DA), etc under the 7th Pay Commission (7th CPC) has submitted its report to the Government last week. 

The 7th CPC had recommended that of a total of 196 Allowances, 52 be abolished altogether and 36 be abolished as separate identities by subsuming them in another allowance.

The Committee was set-up in pursuance of the Union Cabinet decision on June 29, 2016 when approving the 7th CPC recommendations on pay, pensions and related issues were approved.

"The decision to set-up the Committee was taken in view of significant changes recommended by the 7th CPC in the allowances structure and a large number of representations received in this regard from various Staff Associations as well as the apprehensions conveyed by various Ministries / Departments," Ministry of Finance said in a statement on April 28, 2017. 

It further said, "Representations and demands for modifications were received in respect of 79 allowances which have been examined in detail by the Committee."

To reach its conclusion, the Committee took note of all the representations received from various stakeholders on the 7th CPC recommendations on Allowances.

In doing so, the Committee interacted with all the members of the Standing Committee of National Council (Staff Side), Joint Consultative Machinery (JCM) as well the representatives of various Staff Associations of Railways, Postal employees, Doctors, Nurses, and Department of Atomic Energy. It also interacted with the representatives of the Defence Forces, DGs of Central Armed Police Forces (CAPFs) namely CRPF, CISF, BSF, ITBP, SSB, and Assam Rifles as also senior officers from IB and SPG to understand the viewpoint of their personnel.  As mentioned in the Report, the Committee held a total of 15 meetings and was assisted by a Group of Officers headed by Additional Secretary (D/o Expenditure) in examining the representations. 

Ministry of Finance said, "Based on such extensive stakeholder consultations and detailed examination, the Committee has suggested certain modifications in the 7th CPC recommendations so as to address the concerns of the stakeholders in the context of the rationale behind the recommendations of the 7th CPC as well as other administrative exigencies."

"Modifications have been suggested in some allowances which are applicable universally to all employees as well as certain other allowances which apply to specific employee categories such as Railway men, Postal employees, Scientists, Defence Forces personnel, Doctors and Nurses etc," the ministry said. 

What happens next?

The finance ministry said that the rReport is now being examined in the Department of Expenditure and will be placed before the Empowered Committee of Secretaries (E-CoS) set-up to screen the 7th CPC recommendations and to firm-up the proposal for approval of the Cabinet.

"It may be recalled that while recommendations of the 7th CPC on pay and pension were implemented with the approval of Cabinet, allowances continue to be paid at old rates. After consideration by the E-CoS, the proposal for implementation of 7th CPC recommendations on Allowances after incorporating the modifications suggested by the Committee on Allowances in its Report shall be placed before the Cabinet for approval."