In a bonanza to 48 lakh central government employees, the finance ministry on Thursday notified a list of allowances recommended by the 7th Pay Commission along with 34 modifications approved by the Union Cabinet on 28 June 2017. This will impose an additional annual burden of Rs 30,748 crore on the exchequer.
The increased allowances come into effect from 1 July, 2017.
The Seventh Pay Commission's allowances would have cost the exchequer Rs 29,300 crore, but the modified allowances are set to increase the burden by Rs 1,448 crore to Rs 30,748 crore per annum.
The 7th Pay Commission suggested abolition of 53 allowances. Of these, the government decided not to do away with 12, he had said as it will benefit over one lakh employees belonging to specific categories in Railways, Postal department, defence and scientific departments.
The Pay Commission had recommended reduction in the HRA rates to 24 percent for X, 16 percent for Y and 8 percent for Z category of cities.
As the HRA at the reduced rates may not be sufficient for employees falling in lower pay bracket, the government decided that HRA will not be less than Rs 5,400, Rs 3,600 and Rs 1,800 for X, Y and Z category of cities, respectively. These floor rates have been calculated at 30 percent, 20 percent and 10 percent of the minimum pay of Rs 18,000. This will benefit more than 7.5 lakh 1 to 3 levels of employees.
Click here to see full list of various allowances notified by the government.
(With PTI inputs)
Updated Date: Jul 07, 2017 14:51 PM