7th pay commission 7th cpc, allowances hike for central govt employees, hra hike
A banker counts Indian 500 rupee notes to give to customers on November 24, 2016 (representational image).INDRANIL MUKHERJEE/AFP/Getty Images

The much-awaited good news for lakhs of Central government employees came finally on Wednesday when the Union Cabinet approved the hike in allowances, including HRA. The enhanced allowances will be effective from July 1, 2017.

The HRA will be 27 percent, 18 percent and 9 percent, based on the classification of cities as X, Y and Z, if dearness allowance is at 25 percent, finance minister Arun Jaitley said in a briefing after the Union Cabinet meeting in Delhi on Wednesday.

The minimum monthly HRA payable will be Rs 5,400, Rs 3,600 and Rs 1,800 for X, Y and Z cities, calculated at 30 percent, 20 percent and 10 percent, respectively, of minimum salary of Rs 18,000 per month to Central government employees.

Category X: Population of 50 lakh & above

Category Y: Population of 5 to 50 lakh

Category Z: Population below 5 lakh

The Cabinet said that the rates approved on Wednesday are an improvement on those proposed by the 7th Central Pay Commission (CPC).

"7th CPC had recommended that HRA rates will be revised upwards in two phases to 27%, 18% and 9% when DA crosses 50% and to 30%, 20% and 10% when DA crosses 100%. Keeping in view the current inflation trends, the government has decided that these rates will be revised upwards when DA crosses 25% and 50% respectively. This will benefit all employees who do not reside in government accommodation and get HRA," it said in a statement.

For defence personnel posted in high-altitudes, there is a steep hike; the Siachen Allowances has more than doubled from Rs 14,000 per month (for soldiers) to Rs 30,000 while for officers, the hike from Rs 21,000 to Rs 42,500 per month.

The Cabinet also approved hike in allowances payable to pensioners.

The overall financial outgo on account of the enhanced allowances payable to Central government employees and pensioners is estimated at Rs 30,748 crore, according to Jaitley.

 Some of the allowances that have been hiked, or subsumed or rationalised are: 

Dress Allowance

At present, various types of allowances are paid for provisioning and maintenance of uniforms/outfits such as Washing Allowance, Uniform Allowance, Kit Maintenance Allowance, Outfit Allowance etc. These have been rationalised and subsumed in newly proposed Dress Allowance to be paid annually in four slabs @ ₹5000, ₹10,000, ₹15,000 and ₹20,000 per annum for various category of employees. This allowance will continue to be paid to Nurses on a monthly basis in view of high maintenance and hygiene requirements. Government has decided to pay higher rate of Dress Allowance to SPG personnel keeping in view the existing rates of Uniform Allowance paid to them (which is higher than the rates recommended by the 7th CPC) as also their specific requirements. The rates for specific clothing for different categories of employees will be governed separately.

Tough Location Allowance

Some allowances based on geographical location such as Special Compensatory (Remote Locality) Allowance (SCRLA), Sunderban Allowance & Tribal Area Allowance have been subsumed in Tough Location Allowance. The areas under TLA have been classified into three categories and the rates will be governed as per different cells of R&H Matrix and will be in the range of ₹1000 - ₹5300 per month. The 7th CPC had recommended that TLA will not be admissible with Special Duty Allowance (SDA) payable in North-East, Ladakh and the Islands. Government has decided that employees will be given the option to avail of the benefit of SCRLA at pre-revised rates along with SDA at revised rates.

Recommendations in respect of some important allowances paid to all employees:

(i) Rate of Children Education Allowance (CEA) has been increased from ₹1500 per month / child (max. 2) to ₹2250 per month / child (max.2). Hostel Subsidy will also go up from ₹4500 per month to ₹6750 per month.

(ii) Existing rates of Special Allowance for Child Care for Women with Disabilities has been doubled from ₹1500 per month to ₹3000 per month.

(iii) Higher Qualification Incentive for Civilians has been increased from ₹2000 - ₹10000 (Grant) to ₹10000 - ₹30000 (Grant).

Recommendations in respect of some important allowances paid to Uniformed Services: Defence, CAPFs, Police, Indian Coast Guard and Security Agencies

  1. i. The 7th CPC has recommended abolition of Ration Money Allowance(RMA) and free ration to Defence officers posted in peace areas. It has been decided that Ration Money Allowance will continue to be paid to them and directly credited to their account. It will benefit 43000 Defence officers.
  1. ii. Technical Allowance (Tier - I & II) are paid to Defence officers belonging to technical branches @₹3000 per month and ₹4500 per month. 7th CPC has recommended that Technical Allowance (Tier - II) be merged with Higher Qualification Incentive for Defence personnel. In view of the specific requirements of Defence Forces for the Defence personnel to keep pace with changing Defence requirements and technologies, the Government has decided not to discontinue Technical Allowance. The list of courses for these allowances will be reviewed to remain in sync with the latest technical advancements in Defence.
  1. iii. The facility of one additional free railway warrant (Leave Travel Concession) presently granted to personnel of Defence Forces serving in field/high altitude/CI Ops shall also be extended to all personnels of CAPFs and the Indian Coast Guard.
  1. iv. Rates of High Altitude Allowance granted to Defence Forces and CAPF personnel will be governed by the R&H Matrix. The rates will go up from ₹810 - ₹16800 per month to ₹2700 – ₹25000 per month.
  1. v. Field Area Allowances are granted to Indian Army, Air Force & CAPF personnel. The rates of Field Area Allowances (Modified Field, Field & Highly Active) will be governed by the R&H Matrix. The rates will go up from ₹1200 - ₹12600 per month to ₹6000 - ₹16900 per month. Classification of field areas for this allowance will be done by Ministry of Defence for Defence personnel and by Ministry of Home Affairs for CAPFs.
  1. vi. The rates of Counter Insurgency Ops (CI Ops) Allowance, granted to Defence and CAPFs while deployed in counter – insurgency operations will be governed by the R&H Matrix. The rates will go up from ₹3000 - ₹11700 per month to ₹6000 – ₹16900 per month.
  1. vii. Rates of MARCOS and Chariot Allowance granted to marine commandos of Indian Navy will be governed by the R&H Matrix. The rates will go up from ₹10500 - ₹15750 per month to ₹17300 – ₹25000 per month.
  1. viii. Rates of Sea Going Allowance granted to personnel of Indian Navy will be governed by the R&H Matrix. The twelve hour conditionality for determining the eligibility of Sea Going Allowance has been reduced to four hours. The rates will go up from ₹3000 - ₹7800 per month to ₹6000 – ₹10500 per month.
  1. ix. Rates of Commando Battalion for Resolute Action (COBRA) Allowance granted to CRPF personnel deployed in Naxal hit areas will be governed by the R&H Matrix. The rates will go up from ₹8400 - ₹16800 per month to ₹17300 – ₹25000 per month.
  1. x. Rates of Flying Allowance granted to flying branch and technical officers of Defence Forces will be governed by the R&H Matrix. The rates will go up from ₹10500 - ₹15750 per month to ₹17300 – ₹25000 per month. It has been extended mutatis mutandis to BSF Air Wing also.
  1. xi. Rates of Higher Qualification Incentive for Defence Personnel have been increased from ₹9000 – ₹30000 (Grant) to ₹10000 – ₹30000 (Grant).
  1. xii. Aeronautical Allowance, presently paid to personnel of Indian Navy, has been extended to Indian Coast Guard. The rate of this allowance has been increased from ₹300 per month to ₹450 per month.
  1. xiii. Rates of Test Pilot and Flight Test Engineer Allowance will be governed by the R&H Matrix. The rates will go up from ₹1500 / ₹3000 per month to ₹4100 / ₹5300 per month.
  1. xiv. Rates of Territorial Army Allowance have been increased from ₹175 - ₹450 per month to ₹1000 - ₹2000 per month.
  1. xv. Ceilings of Deputation (Duty) Allowance for Defence Personnel have been increased from ₹2000 - ₹4500 per month to ₹4500 - ₹9000 per month.
  1. xvi. Rates of Detachment Allowance have been increased ₹165 - ₹780 per day to ₹405 – ₹1170 per day.
  1. xvii. Rates of Para Jump Instructor Allowance have been increased from ₹2700/3600 per month to ₹6000 / 10500 per month.
  1. xviii. Special Incident / Investigation / Security Allowance has been rationalized. Rates for Special Protection Group (SPG) have been revised to 55% and 27.5% of Basic Pay for operational and non – operational duties respectively.
  1. 8. Recommendations in respect of some important allowances paid to Indian Railways
  1. i. Rates of Additional Allowance have been increased from ₹500 / 1000 per month to ₹1125 / 2250 per month. This has also been extended to Loco Pilot Goods and Senior Passenger Guards also @₹750 per month.
  1. ii. In view of strenuous nature of the job, new Allowance namely Special Train Controller's Allowance@5000 per month for Train Controllers of Railways has been introduced.
  1. 9. Recommendations in respect of some important allowances paid to Nurses & Ministerial Staffs of Hospital
  1. i. Existing rate of Nursing Allowance has been increased from ₹4800 per month to ₹7200 per month.
  1. ii. Rate of Operation Theatre Allowance has been increased from ₹360per month to ₹540 per month.
  1. iii. Rates of Hospital Patient Care Allowance / Patient Care Allowancehave been increased from ₹2070 - ₹2100 per month to ₹4100 – ₹5300 per month. 7th CPC recommendations modified to the extent that it will be granted to Ministerial staff also.
  1. 10. Recommendations in respect of some important allowances paid to Pensioners

Rate of Fixed Medical Allowance (FMA) for Pensioners has been increased from ₹500 per month to ₹1000 per month. This will benefit more than 5 lakh central government pensioners not availing CGHS facilities.

  1. i. The rate of Constant Attendance Allowance granted on 100% disablement has been increased from ₹4500 per month to ₹6750 per month.
  1. 11. Allowances to Scientific Departments
  1. i. The recommendations of 7th CPC to abolish Launch Campaign Allowance and Space Technology Allowance has not been accepted. In order to incentivize the supporting employees in Space and Atomic Energy sector, the rate of Launch Campaign and Space Technology Allowance has been increased from ₹7500 per annum to ₹11250 per annum. Professional Update Allowance for non-gazetted employees of Department of Atomic Energy will also continue to be paid at the enhanced rate of ₹11250 per annum.
  1. ii. The 7th CPC had placed Antarctica Allowance, paid to the Scientists and other members undertaking the expedition to Antarctica under the Indian Antarctic programme, in the RH-Max Cell of the R&H Matrix. The rates of the RH-Max Cell recommended by the 7th CPC were less than the existing rates of Antarctica Allowance which is currently paid on per day basis. Considering the specific nature of these expeditions and to provide appropriate increase in rates, Government has decided to keep Antarctica Allowance out of the R&H Matrix and the allowance will continue to be paid on per day basis as per existing practice. The Rates of Antarctica Allowance will go up from ₹1125 per day (Summers) and ₹1688 per day (Winters) to ₹1500 per day (Summers) and ₹2000 per day (Winters).                                           
  2. Allowances paid to D/o Posts
  3. The recommendations of 7th CPC to abolish Cycle Allowance, granted mainly to Postmen and trackmen in Railways, has not been accepted. Keeping in view the specific requirement of this allowance for postmen in Department of Posts and trackmen in Railways, the cycle allowance is retained and the rates have been doubled from ₹90 per month to ₹180 per month. This will benefit more than 22,200 employees.