Cabinet approves recommendations of 7th CPC on allowances with 34 changes

29 Jun 2017 Evaluate

Union Cabinet led by Prime Minister Narendra Modi has approved the recommendations of the 7th Central Pay Commission (CPC) on allowances for Central government employees with 34 modifications which will impose an additional annual burden of Rs 30,748 crore on the exchequer. The revised rates of the allowances shall come into effect from July 1, 2017 and shall benefit over 48 lakh employees. The modifications are based on the recommendations made by the Committee on Allowances (CoA) in its report submitted to the Finance Minister on April 27, and the Empowered Committee of Secretaries set up to screen the recommendations of the 7th Pay Commission. The 7th CPC had examined a total of 197 allowances, suggesting abolition of 53 allowances and subsumption of 37 others. The government made 34 modifications, deciding not to do away with 12 allowances.

Sharing the details of it, Finance Minister Arun Jaitley has said that Pay Commission had recommended reduction in the HRA rates to 24% for X, 16% for Y and 8% for Z category of cities. He noted that current HRA is at 30% for X, 20% for Y and 10% for Z category of cities. However, he pointed out that as the HRA at the reduced rates may not be sufficient for employees falling in lower pay bracket, it has been decided that HRA will not be less than Rs 5,400, Rs 3,600 and Rs 1,800 for X, Y and Z category of cities, respectively. He noted that this floor rate has been calculated at 30%, 20% and 10% of the minimum pay of Rs 18,000 and added that this will benefit more than 7.5 lakh 1 to 3 levels of employees.

Talking about Siachen allowance, Jaitley has said that level 9 and above will get Rs 42,500 as compared to Rs 31,500 recommended by Pay Commission. He also said that for level 8 and below it would be Rs 30,000 against Rs 21,000 recommended by the Pay Commission. Adding further, he said that additional allowances has been restructured, the government has doubled medical allowance for pensioners to Rs 1,000. However, he noted that the Pay Commission had recommended Rs 500 as medical allowance for pensioners.

On the dress allowance, the minister has stated that various types of allowances are paid at present for provisioning and maintenance of uniforms/outfits such as Washing Allowance, Uniform Allowance, Kit Maintenance Allowance and Outfit Allowance. He explained that these have been rationalised and subsumed in newly proposed Dress Allowance to be paid annually in four slabs-Rs 5,000, Rs 10,000, Rs 15,000 and Rs 20,000 for various category of employees. He added that this allowance will continue to be paid to nurses on a monthly basis in view of high maintenance and hygiene requirements.

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