7th Pay Commission: Revised HRA to benefit only few thousands of central govt employees, report says

While the Modi-Cabinet has given approval for the implementation of 7th Pay Commission, looks like not many central government employees will be able to get benefit. 

The minimum house rent allowance as per the 7th Pay Commission recommendations will benefit only 1000 employees, a media report said. 

As per the revised pay, the government has increased the minimum wage of the central government employees from Rs 7000 per month to Rs 18000 per month, which is an increase of 157.14%. 

HRA is currently paid at 30% for X (population of 50 lakh & above), 20% for Y (5 to 50 lakh) and 10% for Z (below 5 lakh) category of cities. The pay commission has recommended reduction in the existing rates to 24% for X, 16% for Y and 8% for Z category of cities.

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The Cabinet decided that HRA will not be less than Rs 5400, Rs 3600 and Rs 1800 for X, Y and Z category of cities respectively. The HRA benefit 7.5 lakh central government employees. 

Now, the central government employees federation claims that it is because of the JCM  (Joint Consultative Machinery) Staffside Federations who opposed and rejected the HRA rate recommended by Pay Commission, the employees have lost one and half years arrears of allowances, as reported by OneIndia.

Giving an example, the report said that for instance there are more than 7.5 lakh lower level employees in pay grade 1,2 and 3 as claimed by the government. 

Pay level 1 case: The starting salary is Rs 18,000. After eight years of service, the pay will be Rs 22,800. Hence, the employee will get HRA above Rs 5400, Rs 3600, Rs 1800 even if the HRA is 24% (Rs 5472) 16% (Rs 3648) and 8% (Rs 1824).

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Pay Level 2 and 3 case: The starting salary is Rs 19,900 (pay level 2) and Rs 21,700 (pay level 3). After five years of service and two years of service respectively, the pay will be Rs 23,100 at both the levels. The HRA will be 24% (5544), 16% (3696) and 8% (1848) will be above 5400, 3600 and 1800 even if the minimum 5400, 3600, 1800 is not retained.

According to the report, there are only few thousands of employees below 8 years service in level -1 and below 5 years service in level -2 and below 2 years service in level – 3 are working in the Central Government departments as on date.

Another media report suggested that the Finance Ministry is expected to issue notification regarding higher allowance as per the recommendation under 7th CPC. 

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The central government employees are likely to receive higher salary starting from July. Ahead of it, the states have already started meeting with respective Chief Ministers to discuss the HRAs and other expenditure.