• 7th Pay Commission House Rent Allowance

    The Union Cabinet approved some of the recommendations made by the 7th Pay Commission. These recommendations pertained to allowances granted to employees of the Central Government, and the modification were effective from 1 July 2017.

    The recommendations of the 7th Pay Commission pertaining to allowances of central government employees had been approved by the Union Cabinet in 2017. However, some modifications have been implemented to the recommendations. The new rates have been made effective from 1 July 2017. Over 48 lakh central government employees have been enjoying the benefits of the newly implemented rates. As per the decision of the government, 12 out of 53 allowances that were proposed to be abolished in the 7th Pay Commission, has not been abolished. More than 1 lakh employees who belong to certain posts in Defense, Railways, Scientific Departments, and so on have been benefitting from the retention of these allowances. The cost for the additional financial implication of the recommendations of the 7th Pay Commission along with the new modifications is estimated to be around Rs.30,748.23 crore p.a.

    House Rent Allowance (HRA):

    There has been a recommendation by the 7th Central Pay Commission to lower the percentage of HRA for all categories of employees who work for the Central Government. Earlier, the HRA was paid at the rate of 30% of the Basic Pay for Class X cities, 20% for Class Y cities, and 10% for Class Z cities. The percentages have been rationalised to 24% of the Basic Pay for Class X cities, 16% for Class Y cities, and 8% for Class Z cities. A city with a population of 50 lakh and more qualifies as a Class X city, while cities with a population of 5 lakh to 50 lakh are considered as Class Y cities, and those with populations under 5 lakh are regarded as Class Z cities.

    However, since the revised HRAs might not be sufficient for the employees that fall under a lower pay bracket, the 7th Central Pay Commission decided that the HRA should not be less than Rs.5,400 for Class X cities, Rs.3,600 for Class Y cities, and Rs.1,800 for Class Z cities. These amounts have been calculated at 30%, 20%, and 10% of the minimum pay of Rs.18,000. The 7th Central Pay Commission has also made a recommendation to revise the rate of House Rent Allowance to 27%, 18% and 9% for Class X, Class Y, and Class Z cities, respectively when Dearness Allowance is more than 50%. A recommendation has also been made to further revise the percentage of HRA to 30%, 20% and 10% for Class X, Class Y and Class Z cities when Dearness Allowance exceeds 100%.

    So far as the issuance of allowance to the current employees of Central Government is concerned, House Rent Allowance is the most crucial factor as it is offered so that the personnel are compensated for living in a rented house. HRA regulations are permitted for receiving allowance even if the personnel is residing in his/her own house.

    A number of changes were made in the 6th Central Pay Commission so far as regulations regarding House Rent Allowance were concerned. The percentages were made on basic pay depending upon the classification of cities. 30% of HRA was prescribed as the rate for Class X cities, 20% for Class Y cities, and 10% for Class Z cities. Employees of the Central Government are forecasting changes in the percentage rates based on the classification of cities.

    Siachen Allowance:

    The Siachen Allowance has been placed in the RH-Max cell of the Risk and Hardship (R&H Matrix) by the 7th Pay Commission. It has 2 slabs - Rs.21,000 and Rs.31,500. On the basis of the extreme risk and hardship which is faced by the officers and PBORs (Personnel Below Officer Rank) in Siachen, the government has decided to increase the rates from Rs.14,000 to Rs.30,000 per month for Jawans and Junior Commissioned Officers (JCOs) (up to Level 8) and from Rs.21,000 to Rs.42,500 per month for Officers (Level 9 and above).

    Tough Location Allowance:

    There have been a number of allowances earlier which were based on the geographical location of a government employee. Allowances such as the Special Compensatory (Remote Locality) Allowance (SCRLA), Tribal Area Allowance, and Sunderban Allowance have been subsumed by Tough Location Allowance. The different areas under the TLA are classified into 2 broad categories. The rates for these 3 categories are governed as per the varied cells of the R&H Matrix and they range from Rs.1,000 to about Rs.5,300 per month. The 7th Pay Commission has also recommended that the TLA will not be allowed in addition to the Special Duty Allowance (SDA) which is payable in the North-East, the Andaman and Nicobar Islands, the Lakshadweep, and Ladakh. However, the government has decided that the central government employees who are eligible for these allowances will be offered the option to choose from the benefits of SCRLA at pre-revised rates and the SDA at revised rates.

    National Council JCM Staff Side Recommendation on HRA

    HRA for employees of the Central Government has been recommended by NC JCM Staff Side as follows:

    The current HRA scheme which is based on the suggestion of the 6th Central Pay Commission is 30% of basic pay + grade pay + military service pay + NPA for personnel residing in Class X cities, 20% for those residing in Class Y cities, and 10% for those residing in Class Z cities.

    It is recommended that the government must occupy houses on a long lease so as to provide residential accommodation to personnel for 10% of their pay. It is also recommended that the government must prescribe appropriate rates for HRA in various towns and cities not on the basis of their population, but based on a proper assessment of the current levels of rent in various towns and cities. It has also been recommended that specific notional rents for various kinds of accommodation offered to personnel and officers of certain pay groups must be prescribed for certain cities after the actual conditions in the particular cities have been studied. A number of other recommendations have also been made, such as the HRA rates. The suggestions for HRA rates have been prescribed at 15% of pay subject to a maximum of Rs.400 for those residing in Class A, B-1 and B-2 cities, and 7.5% of pay subject to a maximum of Rs.200 for those residing in Class C cities.

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