About 48 lakh central government employees are set to benefit from this move, which is set to impose an additional burden of ₹30,748 crore on the exchequer. The commission had projected the additional financial implication on allowances at Rs 29,300 crore per annum but the amendments brought a modest increase of ₹1448.23 crore.
The revised rates of the allowances will come into effect from 1st July, 2017.
The 7th CPC had recommended subsuming 53 allowances into one but government has decided not to abolish 12 of them keeping in view the specific functional requirements of Railways, Posts and scientific Departments such as Space and Atomic energy. The rates of these allowances have also been enhanced and will benefit over one lakh employees belonging to specific categories in Railways, Posts, Defence and scientific departments.
The HRA has been brought down to 24% for X, 16% for Y and 8% for Z category of cities from existing rate of 30 per cent, 20 per cent and 10 per cent of the basic pay, as per 7th Central Pay Commission’s recommendations. However, the minimum HRA has been fixed at Rs 5,400, Rs 3,600 and Rs 1800 for Class X, Y and Z cities respectively.
“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 5,400, Rs 3,600 and Rs 1,800 for X, Y and Z category of cities respectively,” Finance Minister Arun Jaitley said.
The HRA rates will be revised when Dearness Allowance (DA) crosses 25 per cent and 50 per cent respectively.
Army officers posted in Siachen will now receive an increased allowance of Rs 30,000 per month for soldiers and Rs 42,500 per month for