New Delhi: The government is likely to hike huge House Rent Allowance (HRA) of central government employees, despite increasing 14.27 per cent in basic pay, the lowest in 70 years.
The 7th Pay Commission also proposed for huge increasing in House Rent Allowance (HRA) of central government employees. This segment has been recommended to hike more than double, with the increases ranging between 106% and 122% .
The government is likely to implement soon the new pay structure for central government employees excluding allowances, the compensatory perks for all employees.
The Cabinet decided to constitute a Committee headed by Finance Secretary for further examination of the recommendations of 7th Pay Commission on allowances including HRA, transport allowance. It will complete its work in a time bound manner within four months.
“The Finance Secretary committee will have carefully weigh the risk of doing to raise the allowances of the central government employees against the risk of economy can afford. Accordingly, they will go for ditto, the 7th pay commission recommendations for allowances, however, it could be a slight change, but not overall,” a Finance Ministry official told The Sen Times on condition of anonymity.
The existing rates of HRA for Class X, Y and Z cities and towns are 30%, 20% and 10% of Basic pay (pay in the pay band plus grade pay). While the pay commission has revised the rates HRA for these cities to 24%, 16% and 8% respectively of new Basic pay (pay in the pay band plus grade pay multiplying by the fitment factor of 2.57).
The Commission also recommends that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent respectively when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent.
The PMO has asked Finance Secretary to offer higher HRA to augment the financial assistance to central government employees, who will get a little hike in basic pay, sources in Finance Ministry familiar with the matter said asking not be named.
The Finance Secretary committee will also consult Finance Minister Arun Jaitley, while proposing the hike in House Rent Allowance (HRA) of central government employees, sources said.
“Accordingly the Finance Secretary committee will propose existing rates of HRA for Class X, Y and Z cities and towns are 30%, 20% and 10% of new pay matrix instead of 24%, 16% and 8% respectively,” sources confirmed.
By giving House Rent Allowance hikes, the government is likely to seek to encourage property owners to rent out their properties, reduce the shortage of dwellings and to provide ‘housing for all central government employees’.
Besides the basic salary, a large portion of central government employees’ salary is the House Rent Allowance; some changes will be made in that category this time.
It is noted, the 7th Pay Commission proposed no hike in Transport Allowance (TPTA) for central government employees in its report.
The central government employees will not get any hike in Transport allowance on the time of implementation of the pay commission recommendation as the existing Transport allowance figure automatically reaches the Pay Commission revised Transport allowance figure after adding 125 percent DA.
The Finance Secretary committee will not go to propose any hike in this segment greater than the 7th Pay Commission recommendation.