A decision on raising allowances as recommended by the 7th Central Pay Commission (CPC) for Central government employees is likely to be taken next month, ending months of speculations and wait, prolonged by the elections in five states. Also, the hike in house rent allowance (HRA) could be more than that proposed by the pay panel.
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The CPC examined 196 allowances and gave its recommendations on abolishing or raising some of them while recommending others to be subsumed with other perks. The recommendations of the 7th CPC cover 47 lakh Central government employees and 53 lakh pensioners, of which 14 lakh employees and 18 lakh pensioners are from the defence forces.
The enhanced rate of allowances are likely to be made effective from April 1 and employees residing in metros could end up getting 30 percent of basic pay as HRA as against 24 percent recommended by the CPC, according to a report in the Financial Express.
The 7th CPC had estimated the financial outgo on account of increase in HRA (24 percent) and other allowances at Rs 29,300 crore (Rs 17,200 crore and Rs 12,100 crore) in its report submitted in November 2015.
While the government had taken a decision on implementing salary hike in June last year, it had deferred the one on allowances and appointed a committee headed by the finance secretary for assessment.
The delay in taking a decision on raising allowances was first affected by the demonetisation drive, followed by the model code of conduct that kicked in after the Election Commission of India announced elections to five states. The polling will be over by March 8 and results for all the five states — Uttar Pradesh, Punjab, Manipur, Goa and Uttarakhand — will be announced on March 11, 2017.
