Tuesday 20 June 2017

7th Pay Commission: Cabinet to discuss higher allowances after June 25

New Delhi: The Union Cabinet will discuss the Empowered Committee of Secretaries’s report on higher allowances under the 7th Pay Commission recommendation after June 25 to considerably raise allowances including House Rent Allowance (HRA) for 5.2 million central government employees across the country.

According to the media, The Cabinet which was scheduled to meet on Wednesday will now do so only after June 25 as it is International Yoga Day. Moreover Finance Minister Arun Jaitley will back in the country by June 25 after official visit to out of country.

The cabinet is likely to give nod the higher allowances including HRA for central government employees under the 7th Pay Commission recommendation. At the next Cabinet meeting, speculated to be held after June 25.

The media reports say, the Committee on Allowances headed by Finance Secretary Ashok Lavasa has recommended HRA to be fixed 27, 18 and 9 percent of the Basic Pay for Class X, Y and Z cities respectively.

The central government employees unions strongly demanded demanded HRA at the rate of 30 per cent, 20 per cent and 10 percent of basic pay. The pay panel, however, had recommended slashing HRA from 30, 20 and 10 per cent to 24, 16 and 8 percent of the Basic Pay for Class X, Y and Z cities respectively.

In June 2016, the Cabinet approved 14% pay and pension hike for central government employees and pensioners under the 7th Pay Commission recommendations with effect from January 1, 2016.

The decision on higher allowances was postponed by the Cabinet on that time because the 7th Pay Commission wanted abolition of 52 allowances and subsuming of another 36 allowances into larger existing ones out of total 196 allowances also recommended slashing the HRA from 30, 20 and 10 per cent to 24, 16 and 8 percent of the Basic Pay for Class X, Y and Z cities respectively. .

Employee unions were opposed it, which government complied with formation of the Committee on Allowances in June 2016 to review the allowances.

The Committee on Allowances submitted its report to Finance Minister Arun Jaitley on April 27.

The report was then taken up by the Department of Expenditure for examination, following which it was passed on to the Empowered Committee of Secretaries headed by Cabinet Secretary P K Sinha set up to screen the 7th Pay Commission recommendations and to firm up the proposal for approval of the Cabinet.

The Empowered Committee of Secretaries was in the process of preparing the Cabinet note on higher allowances, which was completed now.

The central government employees are now getting no new allowances (except Dearness Allowance) with their new pay structure till the cabinet nod.

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