Big bonanza for Govt employees..178% extra cash!

New Delhi: This is a bonanza that the government staff had been waiting for. PM Narendra Modi is expected to give green signal soon to the new allowance norms, which will increase the HRA of government staff by up to 178 percent.  

A high-level committee headed by finance secretary Ashok Lavasa has submitted its report on allowances to 47 lakh central government employees to finance minister Arun Jaitley. The Ashok Lavasa committee was constituted in June last year after the government implemented the recommendations of the 7th Pay Commission. The panel was also entrusted with the task of reviewing the Pay Panel recommendations.

The Lavasa panel is understood to have favoured the employees by recommending against altering the existing HRA rates. The committee was asked to review the Pay Panel recommendations, including one on reducing the house rent allowance (HRA) to 24% of basic pay as against the 30% percent of basic pay that the staff was drawing after the 6th Pay Commission.

The 7th Pay Commission had recommended HRA at 24 percent, 16 percent and 8 percent of the basic pay for Class X, Y and Z cities, respectively.

The pay panel had also said that the rate of HRA will be changed to 27%, 18% and 9% once the DA crosses 50%, to 30 percent, 20 percent and 10 percent when DA crosses 100 percent. Currently, rates of HRA for Class X, Y and Z cities and towns are 30%, 20% and 10% of basic pay (pay in the pay band plus grade pay).

Now, with reports of Lavasa panel retaining the exiting HRA rates (as per 6th Pay Commission), the HRA of central government employees likely to go up by 157% to  178 percent%

A central government employee at the lowest level of the pay scale was currently getting HRA of Rs 2,100 on basic pay of Rs 7,000  in a Class X city. After the 7th Pay Commission report, the entry level pay has gone up to Rs 18,000 per month and this level the new HRA for a Class X city would be Rs 5,400, which is a jump of about 157%.

At the highest level, the Cabinet Secretary currently gets HRA of Rs 27,000 at a basic pay of Rs 90,000 in Class X towns. After 7th pay panel, the basic pay at this level is Rs 2.5 lakh, for which the HRA would be Rs 75,000, a jump of 178%.

However, a number of allowances that central government employees are getting will be withdrawn