The salaried staff in 23 cities, notably employees of the government and state-run companies, stand to gain in terms of their house rent allowance after an upgrade of their places of stay based on Census 2011. Six cities have been upgraded for travel allowance.
The decision to this effect was taken at a cabinet meeting presided over by Prime Minister Narendra Modi here on Saturday.
"The revised classification of cities shall take effect from April 1, 2014," said a statement issued after the meeting.
"The impact on the exchequer on account of upgradation of 29 cities would be approximately Rs.128 crore for the year 2014-15," the finance ministry statement added.
On the basis of the final figures of Census-2011, two cities have qualified for being upgraded from category Y to X, and 21 cities have qualified for being upgraded from Z to Y class for the purpose of house rent allowance.
"The existing qualifying limits of population for classification for HRA purpose is Rs.50 lakhs and above for X, RS.5-50 lakhs for Y and below Rs.5 lakhs for Z class city," the statement said.
The cities that have qualified for higher transport allowance are Patna, Kochi, Indore, Coimbatore and Ghaziabad, it added.
