7th Pay Commission – Is the Revised HRA Enough?

7th pay commission recommendation on HRA – House rent allowance, in short called as HRA is provided to every central government employee to meet the cost of renting a house in the city of work when no quarters facility is available to him.

However, the prevailing rate of house rent allowance (HRA) of 30, 20 and 10%  has been reduced to 24, 16 and 8% respectively by the 7th Pay Commission.

The 7th pay commission, in its report has recommended that the rate of HRA may be revised to 27, 18 and 9% respectively when DA crosses 50 percent, and further revised to 30, 20 and 10% when dearness allowance (DA) crosses 100 percent.

The Economic Affairs Secretary Shaktikanta Das has already said, “The increase in house rent allowances does contribute to inflation. The food inflation constitutes a major chunk of our inflation, when food inflation is moderating, any increase in other factors will get absorbed reasonably”.

The central government employees are of the view that the HRA paid to them is not enough, considering the increase in the rental rates the house can be obtained in most of the cities.

They have demanded a hike in House rent allowance 30, 20 and 10% respectively according to new pay matrix. They have urged the government to hlke the new HRA keeping in mind the House Rent rates prevailing in the market.

However, the finance ministry sources indicate that the quantum of House Rent and others allowances may not vary from those proposed by the 7th Pay Commission. They further added, “The committee on allowances headed by Finance Secretary Ashok Lavasa is likely to stick with the 7th Pay Commission’s recommendations on allowances and the government is likely to accept it”.

Through an office memorandum on October 7th, the government has already accepted most of the 7th Pay Commission recommendations on advances.

The abolished advances include bicycle advance, warm clothing advance, advance of pay on transfer, festival advance, natural calamity advance, advance of leave salary and advance for law suits, while interest-free advances that have been retained are medical treatment, travelling allowance (TA) for family of deceased, TA on tour or transfer and Leave Travel Concession (LTC) overriding the 7th Pay Commission’s recommendation.