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In a long awaited bonanza for nearly 50 lakh Central government employees, the Union Cabinet on Wednesday approved the recommendation of the Seventh Pay Commission relating to allowances with 34 modifications.
The benefits, which include higher house rent and medical allowances, will be effective from July 1. A decision on the allowances of railway employees will be taken separately.
“This will benefit 34 lakh civilian employees and 14 lakh defence forces personnel, will have a combined additional financial implication of ₹30,748.23 crore per annum,” Finance Minister Arun Jaitley told reporters after the meeting.
The house rent allowance (HRA) will be paid at rates of 24 per cent, 16 per cent and eight per cent for X, Y and Z category cities, said an official release, adding that it will not be less than ₹5,400, ₹3,600 and ₹1,800 respectively for these cities.
It will be calculated at 30 per cent, 20 per cent and 10 per cent of the minimum pay of ₹18,000 per month.
HRA constitutes about 60 per cent of the salary. As an added benefit, the Cabinet has also decided that the HRA rates will be revised every time the Dearness Allowance (DA) crosses 25 per cent and 50 per cent. The Seventh Pay Commission had recommended that it should be revised when the DA crosses 50 per cent and 100 per cent.
For the armed forces, the Siachen Allowance has also been more than doubled to ₹30,000 for soldiers and ₹42,500 for officers.
The medical and nursing allowances have also been hiked for serving employees as well as pensioners.
The decision on allowances comes a year after the Union Cabinet had on June 29 last year, approved the salary hikes recommended by the Pay Commission.
It had, however, deferred the decision on allowances and had set up a committee to review the recommendations of the Pay Commission on allowances.
Meanwhile, the Union Cabinet also approved six-laning of Chakeri-Allahabad section of National Highway – 2 in Uttar Pradesh and will incur a cost of ₹3,691 crore.
It also approved a MoU between India and Israel on National Campaign for water conservation in India. It further, approved signing of a Memorandum of Cooperation between India and the US of America on Homeland Security.
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