7th Pay Commission: Increase in Central Government employees’ pay to reflect in July salary

New Delhi, Jul 3: The complete benefits of Seventh Central Pay Commission will reflect in the salaries of central government employees from July onwards. The government is likely to notify the Cabinet decision on allowance hike this week, reports suggest.
The chnages will be effective from July 1, 2017 and will benefit 48 lakh employees in total, 34 lakh civilian employees and 14 lakh military employees. The Union Cabinet approved the reforms in allowance structure for central government employees on June 28, which will be put into effect after it is notified in the Official Gazette. The Cabinet had given the green flag to the hike in salaries and pensions ofr central government employees last year in August, but stepped back on allowances considering the extensive modifications suggested by the pay panel. The Cabinet also retained 12 allowances out of 53 allowances that the pay panel recommended to be abolished. Three out of 37 allowances, that the 7th Pay Commission suggested to be subsumed with another allowances, will continue as separate entities on account of their unique nature.
In its decision, the Cabinet has approved higher allowance rates in most cases except House Rent Allowance (HRA), which forms a substantial part of the central government employees’ salaries. HRA will now be be paid at 24 per cent, 16 per cent and 8 per cent for Class X, Y, and Z cities respectively. Even with the decline in HRA rates the central government employees will see a hike in allowances owing to the increase in their basic pay implemented under 7th Pay Commission. The Cabinet approved HRA at 24 per cent, 16 per cent and 8 per cent of basic pay for Class X, Y and Z cities respectively. It will not be less than R 5,400, R 3,600 and R 1,800 every month calculated at 30 per cent, 20 per cent and 10 per cent of minimum pay of R 18,000. These rates will be revised to 27 per cent, 18 per cent and 9 per cent when Dearness Allowance crosses 50 per cent, and then to 30 per cent, 20 per cent, 10 per cent then it goves over 100 per cent, benefiting more than 7.5 lakh employees. (Agencies)