In a move that will benefit about 50 lakh central government employees and defence personnel, the Union cabinet on Wednesday approved the recommendations of the 7th Pay Commission for higher allowances, including house rent allowance (HRA).
The HRA that has been approved will be 24%, 16% and 8% of the new basic pay, depending on the type of city.
The HRA will not be less than Rs 5,400, Rs 3,600 and Rs 1,800 depending on the type of city and calculated at 30%, 20% and 10% of minimum pay Rs 18,000,” a government statement said.
The HRA revision will benefit more than 7.5 lakh employees. HRA constitutes 60% of the total allowance of a government employee’s pay.
The move could help revive demand at a time when the economy has sagged after the government’s decision last year to junk 1000-and 500-rupee bank notes that led to a severe cash crunch. A buoyed consumer sentiment could also translate into political goodwill for the ruling BJP as the party heads into another round of state elections, beginning with Gujarat by December.
The financial implication of revised allowances would be around Rs 30,748 crore per annum, the statement said.
The cabinet decision comes more than a year after the pay of central government employees was increased.
Other allowances increased
* Rates of Siachen allowance for soldiers increased from Rs 14,000 to Rs 30,000 per month and from Rs 21,000 to Rs 42,500 for officers per month for extreme risks and hardship.
* Fixed medical allowance for pensioners increased from Rs 500 to Rs 1,000 per month.
* Constant attendance allowance for those with 100% disability has been increased from Rs 4,500 to Rs 6,750 per month.
* Rate of nursing allowance increased from Rs 4,800 to Rs 7,200 per month.
* Operation theatre allowance increased from Rs 360 to Rs 540 per month.
* Hospital patient care allowance/patient care allowance increased from Rs 2,070 to Rs 4,100 per month and Rs 2,100 to Rs 5,300 per month.