The Union Cabinet chaired by Prime Minister Narendra Modi has approved the recommendations of the 7 Central Pay Commission on allowances with some modifications.
The revised rates of the allowances shall come into effect from 1 July 2017 and will affect more than 48 lakh central government employees.
The Pay Commission
The Central Pay Commission (CPC) is set up by the government. It gives its recommendations regarding changes in salary structure of its employees.
Since India’s Independence, seven pay commissions have been set up on a regular basis to review and make recommendations on the work and pay structure of all civil and military divisions of the government.
Headquartered in Delhi, the Commission is given 18 months from date of its constitution to make its recommendations
The 7th CPC
In a resolution dated 28 February 2014, the government appointed the 7th CPC. It comprised of Justice Ashok Kumar Mathur as Chairman, Vivek Rae as full-time Member, Dr Ratin Roy as part-time Member and Meena Agarwal as Secretary.
- Number of allowances recommended to be abolished and subsumed
Government has decided not to abolish 12 of the 53 allowances which were recommended to be abolished by the 7th CPC. The decision to retain these allowances has been taken keeping in view the specific functional requirements of Railways, Posts and Scientific Departments such as Space and Atomic Energy. This will benefit over one lakh employees belonging to specific categories in Railways, Posts, Defence and Scientific Departments.
- House Rent Allowance (HRA)
HRA is currently paid at 30% for X (population of 50 lakh & above), 20% for Y (5 to 50 lakh) and 10% for Z (below 5 lakh) category of cities. 7th CPC has recommended reduction in the existing rates to 24% for X, 16% for Y and 8% for Z category of cities. This will benefit more than 7.5 lakh employees belonging to Levels 1 to 3. 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.
- Siachen Allowance
7th CPC had placed Siachen Allowance in the RH-Max cell of the R&H Matrix with two slabs of ₹21,000 and ₹31,500. Siachen allowances for defence personnel have been more than doubled — from Rs 14,000 per month to Rs 30,000 for soldiers and from Rs 21,000 to Rs 42,500 for officers for facing extreme risk and hardship.
- 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 at ₹5000, ₹10,000, ₹15,000 and ₹20,000 per annum for various category of employees.
- Recommendations in respect of some important allowances paid to all employees
- 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.
- Existing rates of Special Allowance for Child Care for Women with Disabilities has been doubled from ₹1500 per month to ₹3000 per month.
- 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 Indian Railways
- 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 at ₹750 per month.
- 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.
- Recommendations in respect of some important allowances paid to Nurses & Ministerial Staffs of Hospital
- Existing rate of Nursing Allowance has been increased from ₹4800 per month to ₹7200 per month.
- Rate of Operation Theatre Allowance has been increased from ₹360 per month to ₹540 per month.
- Rates of Hospital Patient Care Allowance / Patient Care Allowance have 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.
- 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.
- The rate of Constant Attendance Allowance granted on 100% disablement has been increased from ₹4500 per month to ₹6750 per month.