The Union Cabinet chaired by the Prime Minister Shri Narendra Modi approved the recommendations of the 7th CPC on allowances with some modifications. The revised rates of the allowances shall come into effect from 1st July, 2017 and shall affect more than 48 lakh central government employees.

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While approving the recommendations of the 7th CPC on 29th June, 2016, the Cabinet had decided to set up the Committee on Allowances (CoA) in view of substantial changes in the existing provisions and a number of representations received. The modifications are based on suggestions made by the CoA in its Report submitted to Finance Minister on 27thApril, 2017 and the Empowered Committee of Secretaries set up to screen the recommendations of 7th CPC.

7th CPC recommendations on Allowances

For most of the allowances that were retained, the 7th CPC recommended a raise commensurate with inflation as reflected in the rates of Dearness Allowance (DA). Accordingly, fully DA-indexed allowances such as Transport Allowance were not given any raise. Allowances not indexed to DA were raised by a factor of 2.25 and the partially indexed ones by a factor of 1.5. The quantum of allowances paid as a percentage of pay was rationalised by a factor of 0.8.

A new paradigm has been evolved to administer the allowances linked to risk and hardship. The myriad allowances, their categories and sub–categories pertaining to  civilians employees, CAPF and defence personnel have been fitted into a table called the Risk and Hardship Matrix (R&H Matrix). The Matrix has nine cells denoting varying degrees of risk and hardship with one extra cell at the top named as RH - Max to include Siachen Allowance. Multiple rates applicable to individual allowances will be replaced by two slab rates for every cell of the R&H Matrix.

Modifications approved by the Cabinet

The modifications approved today were finalised by the E-CoS based on the recommendations of the CoA. The CoA had undertaken extensive stakeholder consultations before finalising its recommendations. It had interacted with Joint Consultative Machinery (Staff side) and representatives from various staff associations. Most of the modifications are on account of continuing requirement of some of the existing arrangements, administrative exigencies and to further the rationalization of the allowances structure.

Financial Implications

The modifications approved by the Government in the recommendations of the 7th CPC on allowances will lead to a modest increase of ₹1448.23 crore per annum over the projections made by the 7th CPC. The 7th CPC, in its Report, had projected the additional financial implication on allowances at ₹29,300 crore per annum. The combined additional financial implication on account of the 7th CPC recommendations along with the modifications approved by the Cabinet is estimated at ₹30748.23 crore per annum.

Highlights of Cabinet approval on Allowances

Leave Travel Concession) presently granted to personnel of Defence Forces serving in  field/high altitude/CI Ops shall also be extended to all personnels of CAPFs and the Indian Coast Guard. 

  1. Rates of High Altitude Allowance granted to Defence Forces and CAPF personnel will be governed by the R&H Matrix. The rates will go up from  ₹810 - ₹16800 per month to ₹2700 – ₹25000 per month.
  1. Field Area Allowances are granted to Indian Army, Air Force & CAPF personnel. The rates of Field Area Allowances (Modified Field, Field & Highly Active)  will be governed by the R&H Matrix. The rates will go up from ₹1200 - ₹12600 per month to ₹6000 - ₹16900 per month. Classification of field areas for this allowance will be done by Ministry of Defence for Defence personnel and by Ministry of Home Affairs for CAPFs.
  1. The rates of Counter Insurgency Ops (CI Ops) Allowance, granted to Defence and CAPFs while deployed in counter – insurgency operations will be governed by the R&H Matrix. The rates will go up from  ₹3000 - ₹11700 per month to ₹6000 – ₹16900 per month.
  1. Rates of MARCOS and Chariot Allowance granted to marine commandos of Indian Navy will be governed by the R&H Matrix. The rates will go up from ₹10500 - ₹15750 per month to ₹17300 – ₹25000 per month.
  1. Rates of Sea Going Allowance granted to personnel of Indian Navy will be governed by the R&H Matrix. The twelve hour conditionality for determining the eligibility of Sea Going Allowance has been reduced to four hours. The rates will go up from ₹3000 - ₹7800 per month to ₹6000 – ₹10500 per month.
  1. Rates of Commando Battalion for Resolute Action (COBRA) Allowance granted to CRPF personnel deployed in Naxal hit areas will be governed by the R&H Matrix. The rates will go up from ₹8400 - ₹16800 per month to ₹17300 – ₹25000 per month.
  1. Rates of Flying Allowance granted to flying branch and technical officers of Defence Forces will be governed by the R&H Matrix. The rates will go up from ₹10500 - ₹15750 per month to ₹17300 – ₹25000 per month. It has been extended mutatis mutandis to BSF Air Wing also.
  1. Rates of Higher Qualification Incentive for Defence Personnel have been increased from ₹9000 – ₹30000 (Grant) to ₹10000 – ₹30000 (Grant).
  1. Aeronautical Allowance, presently paid to personnel of Indian Navy, has been extended to Indian Coast Guard. The rate of this allowance has been increased from ₹300 per month to ₹450 per month.
  1. Rates of Test Pilot and Flight Test Engineer Allowance will be governed by the R&H Matrix. The rates will go up from  ₹1500 / ₹3000 per month to ₹4100 / ₹5300 per month.
  1. Rates of Territorial Army Allowance have been increased from ₹175 - ₹450 per month to ₹1000 - ₹2000 per month.
  1. Ceilings of Deputation (Duty) Allowance for Defence Personnel have been increased from ₹2000 - ₹4500 per month to ₹4500 - ₹9000 per month.
  1. Rates of Detachment Allowance have been increased ₹165 - ₹780 per day to ₹405 – ₹1170 per day.
  1. Rates of Para Jump Instructor Allowance have been increased from ₹2700/3600 per month to ₹6000 / 10500 per month.
  1. Special Incident / Investigation / Security Allowance has been rationalized. Rates for Special Protection Group (SPG) have been revised to 55% and 27.5% of Basic Pay for operational and non – operational duties respectively.

8.         Recommendations in respect of some important allowances paid to Indian Railways

  1. Rates of Additional Allowance have been increased from ₹500 / 1000 per month to ₹1125 / 2250 per month. This has also been extended to Loco Pilot Goods and Senior Passenger Guards also @₹750 per month.  
  1. In view of strenuous nature of the job, new Allowance namely Special Train Controller’s Allowance@5000 per month for Train Controllers of Railways has been introduced.
  • Recommendationsin respect of some important allowances paid to Nurses & Ministerial Staffs of Hospital
  1. Existing rate of Nursing Allowance has been increased from ₹4800 per month to ₹7200 per month.
  1. Rate of Operation Theatre Allowance has been increased from ₹360 per month to ₹540 per month.
  1. Rates of Hospital Patient Care Allowance / Patient Care Allowance have been increased from ₹2070 - ₹2100 per month to ₹4100 – ₹5300 per month. 7th CPC recommendations modified to the extent that it will be granted to Ministerial staff also.
  • Recommendations in respect of some important allowances paid to Pensioners

Rate of Fixed Medical Allowance (FMA) for Pensioners has been increased from ₹500 per month to ₹1000 per month. This will benefit more than 5 lakh central government pensioners not availing CGHS facilities.

  1. The rate of Constant Attendance Allowance granted on 100% disablement has been increased from ₹4500 per month to ₹6750 per month.

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11.       Allowances to Scientific Departments

  1. The recommendations of 7th CPC to abolish Launch Campaign Allowance and Space Technology Allowance has not been accepted. In order to incentivize the supporting employees in Space and Atomic Energy sector, the rate of Launch Campaign and Space Technology Allowance has been increased from ₹7500 per annum to ₹11250 per annum. Professional Update Allowance for non-gazetted employees of Department of Atomic Energy will also continue to be paid at the enhanced rate of ₹11250 per annum.
  1. The 7th CPC had placed Antarctica Allowance, paid to the Scientists and other members undertaking the expedition to Antarctica under the Indian Antarctic programme, in the RH-Max Cell of the R&H Matrix. The rates of the RH-Max Cell recommended by the 7th CPC were less than the existing rates of Antarctica Allowance which is currently paid on per day basis. Considering the specific nature of these expeditions and to provide appropriate increase in rates, Government has decided to keep Antarctica Allowance out of the R&H Matrix and the allowance will continue to be paid on per day basis as per existing practice. The Rates of Antarctica Allowance will go up from ₹1125 per day (Summers) and ₹1688 per day (Winters) to ₹1500 per day (Summers) and ₹2000 per day (Winters).

12.  Allowances paid to D/o Posts

  1. The recommendations of 7th CPC to abolish Cycle Allowance, granted     mainly to Postmen and trackmen in Railways, has not been accepted.          
  2. Keeping in view the specific requirement of this allowance for postmen in Department of Posts and trackmen in Railways, the cycle allowance is retained and the rates have been doubled from ₹90 per month to ₹180 per month. This will benefit more than 22,200 employees.

While increasing the rate of allowances affecting the central government employees, especially the Defence, CAPF and Coast Guard personnel, the staff of Railways, Postal department and nursing staff, the total number of allowances have been rationalized from 197 to 128. Thus, the Government has shown a great deal of fiscal prudence and at the same time addressed the genuine concerns of the employees and responded to some of the administrative exigencies necessitating the modifications.