Central govt employees to get higher allowances from January 2017

In a latest development around 7th Pay Commission, the government will start giving higher allowances under the 7th Pay Commission recommendations from January, 2017.

According to sources in Finance Ministry, central government employees will get their higher allowances under 7th Pay Commission recommendations from January next. The cash crunch, following the demonetisation drive of Prime Minister Narendra Modi, compelled central government to keep in abeyance the higher allowances till things normalize.

The government will pay higher allowance, under 7th Pay Commission recommendations, with retrospective effect from August 2016, however central government employees unions demanded for implementation of the allowances with retrospective effect from January 2016. There is official confirmation whether the arrears would be paid too. The development comes days after central government employees unions met Committee on Allowances headed by Finance Secretary Ashok.

The central government employees have been waiting for fatter allowance since July when the government issued the notification for the implementation of the 7th Pay Commission recommendations. The 7th pay commission recommended abolition of 51 allowances and subsuming 37 others out of 196 allowances, which triggered a resentment among central government employees. Union Finance Minister Arun Jaitley then formed ‘Committee on Allowances’ for examination of the recommendations of 7th Pay Commission on allowances other than dearness allowance.

“The central government employees unions wanted that House Rent Allowance (HRA) be fixed at range 10, 20 and 30 per cent of the basic linked to the classification of the town of posting when the Pay commission recommended 24 per cent, 16 per cent and 8 per cent respectively of new pay matrix, the union also asked to enhance children education allowance of Rs 3,000 and hostel subsidy of Rs 10,000 with tax exempt.” a sources was quoted as saying by The Sen Times. “The union also demanded inclusion of post-graduate and professional courses in children education allowance and to hike the ‘Fixed Medical Allowance’ to Rs 2,000 with Dearness Allowance Indexation,” they added.

Sources also said that the Finance Ministry may scale down the higher allowances proposal due to ongoing cash chaos in the country. Until acceptance of higher allowances, under 7th Pay Commission, the allowances are now paid according to the 6th Pay Commission recommendations.

No hike in basic pay, allowances likely

It simply means, the National Anomaly Committee or Committee on Allowances won't suggest or approve any changes in the basic pay or allowance against the recommendations of the 7th Pay Commission.

The ‘Committee on Allowances’, headed by Finance Secretary Ashok Lavasa, is yet to submit its report on fatter allowances recommended by the 7th Pay Commission, however the Finance Ministry sources said the government won’t consider any change in 7th Pay Commission recommendations. Sources confirmed that there will be no changes in basic pay and allowances recommended by the 7th Pay Commission. It simply means, the National Anomaly Committee or Committee on Allowances won’t suggest or approve any changes in the basic pay or allowance against the recommendations of the 7th Pay Commission.

Sources in the Finance Ministry have made it clear that the National Anomaly Committee on behalf of the government won’t consider any hike in basic pay and fatter allowances recommended by the 7th Pay Commission. The latest development contradicts with what Union Finance Minister Arun Jaitley had promised. Those who will hope over these issues will gain nothing but no change on 7th Pay Commission recommendations of pay scales and allowances are very much possible, said sources. 

Finance Minister Arun Jaitley had promised the government would consider the demand of an increase in basic pay and allowances of the central government employees. The government had said it will form a High Level Committee to review the new pa scales. However no such committee has been formed till date. Instead, the government formed a 22-member National Anomaly Committee headed by Secretary, Department of Personnel and Training (DoPT) to look into various pay related anomalies arising out of the implementation of the 7th Pay Commission’s recommendations.

Sources said the government has decided to stick to the recommendations of the 7th Pay Commission on basic pay and allowances. They also confirmed that the ‘Committee on Allowances’ won’t suggest any hike and is likely to stick with the recommendations of the 7th Pay Commission. The 7th Pay Commission notification confirmed that central government employees will get 14.27 per cent hike in basic pay at junior levels, which is the lowest in 70 years. The Cabinet also approved the increase in minimum pay Rs 18,000 from existing Rs 7,000. The 7th pay commission had recommended abolition of 51 allowances and subsuming 37 others out of 196 allowances.