The waiting for Central government employees, who are hoping for higher HRA and other allowances, could get a tad longer since the Union Cabinet did not take up the matter for discussion on Wednesday, according to news channel NDTV.
The proposals on allowances made by the 7th Central Pay Commission (CPC) given last year were referred to an expert committee headed by finance secretary Ashok Lavasa who submitted his report in April. The panel had suggested modifications, which were then referred to an Empowered Committee of Secretaries (E-CoS) for final approval by the Union Cabinet.
The CPC examined 196 existing allowances after which it recommended the abolition of 51 and subsuming 37 others with the existing ones. The recommendations of the CPC cover about 47 lakh Central government employees and 53 lakh pensioners.
The Reserve Bank of India's Monetary Policy Committee (MPC) also made a reference to the impact on inflation if the proposals on raising allowances are implemented.
"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 MPC said on Wednesday after the conclusion of the two-day meeting.
What the CPC said on HRA
On HRA, the pay panel had said, "...the Commission recommends that HRA should be rationalised to 24 percent, 16 percent and 8 percent of the Basic Pay for Class X, Y and Z cities respectively."
"The Commission also recommends that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent," it added.
A city or town with a population of less than 5 lakh is categorised as "Z", while the threshold is 5 to less than 50 lakh for "Y". Cities with a population of 50 lakh or above are classified as "X".
Employees have demanded a hike of 30 percent, 20 percent and 10 percent, respectively, as against the CPC's recommendations.
If the HRA is hiked in accordance with the CPC's recommendations, the additional financial implication on the government exchequer will be Rs 17,200 crore.