New Delhi:The Union Cabinet on Wednesday approved the 7th Pay Commission recommendations on allowances, providing a relief for more than 48 lakh central goverment employees.
Union Finance Minister Arun Jaitley on Wednesday told the media that Cabinet has approved the recommendations with some modifications.
The recommendations on House Rent Allowance and other allowances will be effective from July 1, 2017.
Of the 196 suggestions given by the Finance Secretary Ashok Lavasa-led committee in April, the Cabinet approved 36 modifications. Jaitley said that the combined additional financial impact of the revised allowances will be around Rs 30,748 crore a year.
The government retained the old structure of allowances for central government employees. in cities with more than 5 million people, HRA will be 27% of the basic pay.
A panel had proposed bringing down the HRA to 24%, 16% and 8% of the basic pay, based on the cost of living in different cities divided in three slabs. Therecommendations had left government employees unsatisfied with a lowest basic pay hike of 14.27 percent in 7 decades.
After protests against the 7 CPC report intensified, the Modi government constituted a committee under Finance Secretary Ashok Lavasa in July last year to review the recommendations on allowances. The panel submitted the report on April 27.
The modification, which is based on the recommendations of Committee on Allowances, will result in additional burden of Rs 1,448 crore over and above suggestions made by 7th Central Pay Commission.
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