After an year of wait nearly 50 lakh central government employees who are waiting for higher allowance under 7th Pay Commission are likely to hear some good news.
Prime Minister Narendra Modi has returned from his foreign visit last night and today he will be meeting his Cabinet members today to take final decision on revised salary as per 7th Pay Commission, media reports suggests.
According to a report by IndiaToday, Finance Minister Arun Jaitley will place the recommendation report before the Cabinet today. Apart from higher allowance, the issues like House Rent Allowance (HRA), Dearness Allowance (DA) and arrears will also be discussed.
The 7th Pay Commission had recommended HRA too be fixed at 24%, 16% and 8% depending on the cities employees work in. But, central government employees demanded 30%, 24% and 16% HRA.
Looking at the high protest by the employees, FM Jaitley last year formed a committee under the leadership of Finance Secretary Ashok Lavasa to look into matter. After several months, Lavasa panel submitted its recommendation report in April suggesting HRA to be fixed at between 25% and 27%.
Under the 7th Pay Commission, nearly 200 allowances have been subsumed into a smaller batch.
According to sources, the allowance hike under the 7th pay commision will be likely to announced after this evening's cabinet meet.
Meanwhile, expenditure secretary Ashok Lawasa concluded the meeting with allowance committee officials, but details of the meeting are yet to be revealed.
In a bonanza to 48 lakh central government employees, the Union Cabinet today approved recommendations of 7th Central Pay Commission with 34 modifications which will impose an additional annual burden of Rs 30,748 crore on the exchequer.
The increased allowances, which comes into effect from July 1, 2017, is based on the recommendations of the Committee on Allowances (CoA).
The allowances as recommended by the 7th Central Pay Commission would have cost the exchequer Rs 29,300 crore. The modified allowances approved by the Union Cabinet headed by Prime Minister Narendra Modi will increase the burden by Rs 1,448 crore to Rs 30,748 crore per annum.
Briefing the media after the Cabinet meeting, Finance Minister Arun Jaitley said the modifications are based on suggestions made by the CoA in its report submitted to the Finance Minister on April 27, and the Empowered Committee of Secretaries set up to screen the recommendations of the 7th Pay Commission.
The 7th Pay Commission suggested abolition of 53 allowances. Of these, the government decided not to do away with 12 allowance, he said.
This will benefit over one lakh employees belonging to specific categories in railways, posts, defence and scientific departments.
The modifications approved today were finalised by the Empowered Committee of Secretaries based on the recommendations of the CoA, he said.
"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 rationalisation of the allowances structure," he said.
Sharing details, Jaitley said the Pay Commission had recommended reduction in the HRA rates to 24 per cent for X, 16 per cent for Y and 8 per cent for Z category of cities.
"As the HRA at the reduced rates may not be sufficient for employees falling in lower pay bracket, it has been decided that HRA will not be less than Rs 5400, Rs 3600 and Rs 1800 for X, Y and Z category of cities respectively.
"This floor rate has been calculated at 30 per cent, 20 per cent and 10 per cent of the minimum pay of Rs 18,000. This will benefit more than 7.5 lakh 1 to 3 levels of employees," he said.
House Rent Allowance (HRA) is currently paid at 30 per cent for X (population of 50 lakh and above), 20 per cent for Y (5-50 lakh) and 10 per cent for Z (below 5 lakh) category of cities.
With regard to defence forces, he said ration allowances will be directly credited to their accounts.
Talking about Siachen allowance, he said level 9 and above will get Rs 42,500 as compared to Rs 31,500 recommended by Pay Commission. For level 8 and below it would be Rs 30,000 against Rs 21,000 recommended by the Pay Commission.
"Additional allowances has been restructured, the government has doubled medical allowance for pensioners to Rs 1,000. However, the Pay Commission had recommended Rs 500 as medical allowance for pensioners," he said.
Talking about dress allowance, he said various types of allowances are paid at present for provisioning and maintenance of uniforms/outfits such as Washing Allowance, Uniform Allowance, Kit Maintenance Allowance and Outfit Allowance.
These have been rationalised and subsumed in newly proposed Dress Allowance to be paid annually in four slabs -- Rs 5,000, Rs 10,000, Rs 15,000 and Rs 20,000 for various category of employees, he said.
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