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. 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 population of 50 lakh and more qualifies as a Class X city, while cities with 5 lakh people to 50 lakh people are considered as Class Y cities, and those with populations under 5 lakh are regarded as Class Z cities.
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% oh 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.
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 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 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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