7th pay commission: HRA to be revised under 7 CPC, Lavasa committee recommendations; Key highlights

| April 15, 2017

The committee is also considering revising the rates in accordance to the Dearness Allowance that is paid to the employees.

HRA to be revised under 7th Pay Commission

HRA to be revised under 7th Pay Commission

New Delhi, April 14: Major changes  could be made to the salaries of central government employees, with the Ashok Lavasa committee all set to submit its recommendations for changes in allowances under the seventh pay commission. While the committee is looking at abolishing or subsuming various allowances, it is particularly focused on revising the current rates of the House Rent Allowance (HRA).

The House Rent Allowance (HRA) is paid by the government to all the employees as a fixed amount that goes towards their accommodation needs. With central government employees often having to move around the country due to transfers, the HRA plays a crucial role. However, the sum is given even if the employee is living in his/her own house.

The HRA forms a significant amount of an employees’ salary and currently constitutes about 30 percent of the same i metro cities. However, the Lavasa committee is looking at reducing the rate to 24 percent in metros, a move that has not particularly gone well.

The seventh pay commission has recommended that the HRA be extended according to the type of city an employee is living in. As per the classification, cities have been segregated into three classes; X, Y and Z. Here is the complete list of cities and the class under which they belong:-

Class of city (X,Y or Z)  Name of city
                                        X Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai, Pune
                                       Y Agra, Ajmer, Aligarh, Allahabad, Amravati, Amritsar, Asansol, Aurangabad, Bareilly, Belgaum, Bhavnagar, Bhiwandi, Bhopal, Bhubaneswar, Bikaner, Bokaro Steel City, Chandigarh, Coimbatore, Cuttack, Dehradun, Dhanbad, Durg-Bhilai Nagar, Durgapur, Erode, Faridabad, Firozabad, Ghaziabad, Gorakhpur, Gulbarga, Guntur, Gurgaon, Guwahati, Gwalior, Hubli-Dharwad, Indore, Jabalpur, Jaipur, Jalandhar, Jammu, Jamnagar, Jamshedpur, Jhansi, Jodhpur, Kannur, Kanpur, Kakinada, Kochi, Kottayam, Kolhapur, Kollam, Kota, Kozhikode, Kurnool, Lucknow, Ludhiana, Madurai, Malappuram, Malegaon, Mangalore, Meerut, Moradabad, Mysore, Nagpur, Nashik, Nellore, Noida, Patna, Pondicherry, Raipur, Rajkot, Rajahmundry, Ranchi, Rourkela, Salem, Sangli, Siliguri, Solapur, Srinagar, Surat, Thiruvananthapuram, Palakkad, Thrissur, Tiruchirappalli, Tiruppur, Ujjain, Vadodara, Varanasi, Vasai-Virar City, Vijayawada, Visakhapatnam, Warangal
                                       Z All other cities in all states and union territories.

The Ashok Lavasa committee has devised a detailed analysis of the required HRA on the basis of the cost of living in cities according to the above classification. It has suggested that, for central government employees residing in metros, the HRA be paid at a rate of 24 per cent, 16 per cent and 8 per cent of the current basic pay.

Class of Cities or Towns HRA rates as % of Basic Pay (including MSP and NPA)
X 24%
Y 16%
Z 8%

Further, the committee is also considering revising the rates in accordance to the Dearness Allowance that is paid to the employees. The DA is the sum paid to employees to make their adjustments in new cities more comfortable.The committee has suggested that wherever the Dearness Allowance crosses 50 percent, the HRA be given at a rate of 27 per cent, 18 per cent and 9 per cent.

Class of Cities or Towns  HRA rates as % of Basic Pay (including MSP and NPA)
X 27%
Y 18%
Z 9%

However, if the Dearness Allowance crosses 100 percent of the basic pay, the suggested House Rent Allowance  (HRA) rates are 30 per cent, 20 per cent and 10 per cent.

Class of Cities or Towns HRA rates as % of Basic Pay (including MSP and NPA)
X 30%
Y 20%
Z 10%

The final report of the Ashok Lavasa committee is expected to come out by April 18.  Apart from revising the HRA rates, the committee will also suggest the subsuming or abolition of various allowances such as acting, assisting cashier, cycle, condiment, flying squad, haircutting, rajbhasha, rajdhani, robe, shoe, shorthand, soap, spectacle, uniform, vigilance and washing allowance.

Source:- India.com

Category: News, Seventh Pay Commission

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