7th Pay Commission: Modi cabinet likely to decide on allowances for government employees today

| June 28, 2017

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Prime Minister Narendra Modi, who will be back from the US visit, will be joined by Finance Minister Arun Jaitley and others in taking a final call on implementation of allowances.

The Narendra Modi-led Cabinet will hold its last meeting for this month on Wednesday and revised allowances for Central government employees are likely to be taken up for discussion.

The Prime Minister, who will be back from the US visit, will be joined by Finance Minister Arun Jaitley and others in taking a final call on implementation of allowances, including HRA, under the Seventh Pay Commission.

According to some reports, Narendra Modi met Arun Jaitley ahead of the US visit and was believed to have indicated that there should not be further delay in announcing allowances for Central government employees.

Nearly 50 lakh government employees have been waiting to hear from the government on the revision of allowance structure after the Cabinet okayed recommendations of the Seventh Pay Commission in June last year.


  1. The Seventh Pay Commission recommended a 14.27 per cent hike in basic pay for Central government employees–the lowest in 70 years. It also suggested axing 53 of the 196 allowances and merging 36 allowances into bigger ones.
  2. The Seventh Pay Commission suggested reducing the House Rent Allowance (HRA) rates for Central government employees by varying percentage points depending on their type of cities.
  3. Central government employees protested against the recommendation following which the Modi government formed a committee in July last year under Finance Secretary Ashok Lavasa to review the Seventh Pay Commission’s report on allowances.
  4. The Ashok Lavasa committee, after several extended deadlines, submitted its review report to Finance Minister Arun Jaitley on April 27. The Lavasa committee held deliberations with various stakeholders before submitting its report.
  5. The Lavasa report was then sent to the Department of Expenditure for the first round of screening before it was presented to the Empowered Committee of Secretaries (E-CoS).
  6. The Empowered Committee of Secretaries (E-CoS) met on June 1 to discuss the Lavasa panel’s report and suggest changes to it, if any. Following the meeting, the report was forwarded to the Union cabinet for the final call on implementation of allowances for Central government employees.
  7. While some reports suggested that the government was keen on implementing the revised allowance structure from July 1, the NJCA general secretary also informed government employees about assurance from Cabinet Secretary on rollout of allowances from next month. Cabinet Secretary, in a meeting with government employees’ representative NJCA, said that “things are in the process and most probably would be placed in the next Cabinet meeting”.

Category: News, Seventh Pay Commission

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