Central government employees may have a reason to rejoice at the turn of the month, with several reports claiming that the Union Cabinet may finally give a nod to hike their allowances.
While the allowance may not be as much as what was recommended by the 7th Central Pay Commission (CPC), it will definitely be more than what Central government employees were getting in the aftermath of the previous pay panel's recommendations.
A hike in allowances for Central employees has been on the cards for almost two months, after the expert panel presided over by Ashok Lavasa submitted its report on the issue. His report came after a study of the proposals made by the 7th CPC, which itself had submitted its report in November 2015.
The Lavasa panel had suggested certain modifications that were then referred to an Empowered Committee of Secretaries (E-CoS) before they could get a final approval from the Union Cabinet. That final nod is expected to come on June 28, when the Cabinet meets once again, with the E-CoS having already submitted its proposal to the Cabinet.
This meeting is expected to be special, because Prime Minister Narendra Modi — who is currently on a foreign trip — is slated to attend it.
The E-CoS has recommended a hike in house rent allowance (HRA) by 2-6 percent depending on type of cities of employers. However, the Cabinet increase may not be as much, with the HRA being set at 27 percent of basic salary.
The CPC, it may be noted, had also recommended that HRA be revised to 27 percent, 18 percent and 9 percent when DA crosses 50 percent, and then to 30 percent, 20 percent and 10 percent when DA crosses 100 percent. The classifications are for Category X, Y and Z cities.
If the recommendations are implemented, around 47 lakh Central government employees may get a higher salary from July 1, which is also the day when the Goods and Services Tax (GST) regime is coming into force in the country.
The hike may help the government employees offset some of the financial burden that will result from higher tariffs that the GST regime will bring about.