The Ashok Lavasa committee submitted its report to the finance minister on April 27. An Empowered Committee of Secretaries was set up to screen the report and firm up proposals for the Cabinet.
The government could finalise 7th pay commission allowances, including HRA (House Rent Allowance), later this month, National Joint Council of Action (NJCA) convenor Shiv Gopal Mishra told NDTV. The employee union leader, who had discussions with top government officials recently, also said that there is a possibility of central government officials getting higher HRA than that recommended by the 7th pay commission. HRA accounts for the bulk of total allowances. National Joint Council of Action (NJCA) is a joint body of unions representing central government employees.
The Ashok Lavasa committee, which examined the 7th pay commission’s recommendations on allowances, submitted its report to the finance minister on April 27. An Empowered Committee of Secretaries was set up to screen the report and firm up proposals for the Cabinet.
The Lavasa committee suggested some modifications in some allowances that are applicable universally to all employees as well as certain other allowances which apply to specific employee categories, the finance ministry had said in a statement. Economists say that disbursement of 7th pay commission allowances is expected to give a further boost to consumer spending and thus the broader economy.
The government had last year accepted the recommendation of Justice AK Mathur-headed Seventh Pay Commission in respect of the hike in basic pay and pension. The 7th Pay Commission’s recommendations relating to allowances were referred to the Ashok Lavasa committee.
The 7th pay commission had recommended that house rent allowance be paid at the rate of 24 per cent, 16 per cent and 8 per cent of the new basic pay, depending on the type of city. The 7th pay commission had also recommended that the rate of HRA be revised to 27 per cent, 18 per cent and 9 per cent when DA or dearness allowance crosses 50 per cent, and further revised to 30 per cent, 20 per cent and 10 per cent when it crosses 100 per cent. With regard to allowances, employee unions have demanded HRA at the rate of 30 per cent, 20 per cent and 10 per cent.
The 7th pay commission had recommended that of a total of 196 allowances, 52 be abolished altogether and 36 be abolished as separate identities by subsuming them in another allowance.
The Reserve Bank of India has however flagged upside risks to inflation from disbursement of revised 7th pay commission allowances. “At the current juncture, global political and financial risks materialising into imported inflation and the disbursement of allowances under the 7th central pay commission’s award are upside risks. The date of implementation of the latter is still not announced and as such, it is not factored into the baseline projections,” the RBI said in its latest monetary policy statement last week.