Government to announce revised allowances as per 7th Pay Commission in April

Central government employees may be in for some good news this April as revised allowances including house rent allowance (HRA) are likely to be announced after April 12, when the ongoing Budget session of Parliament gets over, reports The Financial Express.

The panel, headed by the Finance Secretary, will hold its final meeting very soon and is on the verge of giving final touches to the allowances which have been reworked in accordance with the 7th Pay Panel’s recommendations.

The panel meeting which took place on Wednesday to mull over the subject lasted for more than three hours. It seems employees in metro cities are in for a bigger cheer as sources suggest that the panel was considering to make HRA a little more generous than the CPC’s award.

The panel was mulling HRA of 30 percent of basic pay for employees in cities with a population of over 5 million, against 24 percent recommended by CPC. HRA stood at 30 percent for these cities in Sixth CPC award period (2006-2015). Accounting for more than 60 percent of the total bill, HRA forms the largest chunk in the pie.

Assuming Rs 7,600 crore will be borne by the railways and with Rs 4,500 crore additional allocation in the Budget the exchequer will fall short by Rs 15,000 crore in 2017-18 to fulfil this added responsibility. “This additional requirement could be met largely from allocations made to various departments for the year,” another source told FE. The size of the Union Budget for the next fiscal year is pegged at Rs 21.47 lakh crore.

While the formation of the secretary panel drew a lot of flak from many government employees who cited the same as delaying tactic, the consequential delay in the implementation has saved the government crores on additional costs towards implementation in 2016-17. The same was redeployed by the government into various programmes to give them a spending boost of Rs 36,000 crore.