7th Pay Commission update: Final decision on allowances, HRA windfall likely today

The Narendra Modi-led Union Cabinet will meet for the month's last meeting today, June 28, and the revision of allowances of Central government employees is likely to be discussed at the meeting.

The decision on the allowances including HRA (House Rent Allowance) was expected to come earlier, but was postponed as Modi as well as Finance Minister Arun Jaitley were scheduled to travel to the US and Russia, respectively. However, before leaving, the PM is believed to have told Jaitley that the decision must not be delayed any further, reported India Today.

If the Cabinet makes a decision during its Wednesday's meeting, the Central government employees will receive the much-awaited revised allowances from July's salary.

Meanwhile, the committee headed by the Finance Secretary Ashok Lavasa that was formed to study the issue submitted its report to Jaitley on April 27. The Lavasa panel recommended several changes that were referred to an Empowered Committee of Secretaries (E-CoS).

The E-CoS has suggested a 2-6 percent increase in HRA, depending on the type of cities. But it is expected that the Cabinet will stick to the recommendations of the pay commission, headed by AK Mathur, which proposed HRA at 24 percent, 16 percent and 8 percent of the basic pay for Class X, Y and Z cities, respectively.

The Commission had also suggested that the HRA be revised to 27 percent, 18 percent and 9 percent when DA crosses 50 percent, and further changed to 30 percent, 20 percent and 10 percent when DA crosses 100 percent.

The government is said to be keen on implementing the revised allowance from July 1 and National Joint Council of Action (NJCA) chief had explained that "things are in the process and most probably would be placed in the next Cabinet meeting."