Taking note of employees’ representations, a finance secretary-led panel is looking at HRA of 30% of basic pay for those in cities with a population of over 5 million, against 24% recommended by CPC, the sources said. (Reuters)

With the second half of Budget session starting from today, expectations are rising that the government may soon announce a hike in allowance as part of the Seventh Pay Commission awards. The Ashok Lavasa panel has finalised its report on Seventh Pay Commission allowances and the government could take a decision soon, said Shiv Gopal Mishra, the convenor of National Joint Council of Action (NJCA), a joint body of unions representing central government employees. The government had in June accepted the recommendation of Justice AK Mathur-headed Seventh Pay Commission in respect of the hike in basic pay and pension but its suggestions relating to allowances were referred to the committee. The Seventh Pay Commission had examined a total of 196 existing allowances and, by way of rationalisation, recommended abolition of 51 allowances and subsuming of 37 allowances.

The Union Cabinet had also constituted a separate committee for suggesting measures for streamlining the implementation of National Pension System (NPS). Mr Mishra said union officials are likely to hold meeting with the committee members regarding NPS later this month.

Regarding allowances, the unions have demanded HRA at the rate of 30 per cent, 20 per cent and 10 per cent. The Seventh Pay Commission had recommended that HRA be paid at the rate of 24 per cent, 16 per cent and 8 per cent of the new Basic Pay, depending on type of cities.

The Seventh Pay Commission had also recommended that the rate of HRA be revised to 27 per cent, 18 per cent and 9 per cent respectively when DA crosses 50 per cent, and further revised to 30 per cent, 20 per cent and 10 per cent when DA crosses 100 per cent.

The committee on Seventh Pay Commission allowances was initially given a time of four months to submit its report to the finance minister. Allowances form a significant chunk of government employees’ salary.