7th Pay Commission: Central govt employees' salary for July to reflect revision in allowances

The HRA will be revised to 30 per cent, 20 per cent and 10 per cent of the basic pay for X, Y and Z cities respectively when the Dearness Allowance (DA) crosses 50 per cent

More than a week after Narendra Modi-led Cabinet approved the recommendations of the Seventh Pay Commission with 34 modifications on June 28, the Ministry of Finance has notified revised allowances effective from July.

As per the official notification in The Gazette of India, the House Rent Allowance (HRA) will be revised to 27 per cent, 18 per cent and 9 per cent of the basic pay for X, Y and Z cities respectively when Dearness Allowance (DA) crosses 25 per cent.

The HRA will be further revised to 30 per cent, 20 per cent and 10 per cent of the basic pay for X, Y and Z cities respectively when the DA crosses 50 per cent.

Further, the HRA will not be less than Rs 5,400, Rs 3,600 and Rs 1,800 for X, Y and Z cities respectively calculated at 30 per cent, 20 per cent and 10 per cent of minimum pay of Rs 18,000. This move will benefit 7.5 lakh government employees.

Before the Cabinet decision, there was much debate on HRA as the Seventh Pay Commission had suggested bringing down the rates to 24 per cent, 16 per cent and 8 per cent of the basic pay for X, Y and Z cities respectively.

Following protests by Central government employees, the government had constituted a panel under Finance Secretary Ashok Lavasa to review the recommendations of the Seventh Pay Commission on allowances.

The Ashok Lavasa panel submitted its report to Finance Minister Arun Jaitley on April 28.

After a long wait, the July salary of 34 lakh civilian employees and 14 lakh defence forces' personnel will reflect the revised allowances recommended under the Seventh Pay Commission.

While the Seventh Pay Commission projected additional financial implication of Rs 29,000 crore per annum, the revised allowance structure will put a burden of Rs 30,748 crore on the state exchequer every year.