Cabinet Approves Commission of Second Pay Commission 34 Changes for 48 Lakh Employees


On 28 June, The Union Cabinet approved the recommendation of 7th Pay Commission Allowances with 34 amendments that will impose an additional annual burden of Rs. 30,748  on exchequer. This move will impact  50 lakh government employees and will result in what the government calls a modest increase of Rs 1448.23 crore per annum over the projections made by the 7th Central Pay Commission.

The  projected financial implication on allowances  by the commission is at Rs Rs. 29,300 crore per annum. Hence, the combined additional financial implication is  estimated at Rs 30748.23 crore per annum.

The increased allowances will comes into effect from 1 July 2017 and is based on the recommendations of the Committee on Allowances.

In the Cabinet meeting, the Finance Minister Arun Jaitley brief the media and said, ” All the modifications are based on suggestions made by the Committee on Allowances (CoA). In its report submitted to the Finance Minister on April 27 the Empowered Committee of Secretaries set up to screen the recommendations of the 7th Pay Commission.”

The Highlights of approved recommendation on 7th Pay Commission Allowances by cabinet:

  1. Number of allowances recommended to be abolished:

He  added, the Commission suggested that out of the eradication of 53 allowances the government decided not to do away with the 12 allowance.

Before approving its recommendations the  7th pay commission had undertaken the its stakeholder consultations and interacted with Joint Consultative Machinery and representatives from various staff associations.

Most of the modifications are based on the continuing requirement of some of the existing administrative exigencies and arrangements  to further rationalisation of the allowances structure.

  1. House Rent Allowance

Currently, HRA is paid at 30 percent for X cities in which the population is 50 lakh and above,  20 percent for peoples living in Y cities with population of 5 to 50 lakh and 10 percent for those employees who live in  Z  category city in which the population is below 5 lakh. The panel recommended the reduction in the existing rates to 24 percent for X cities, 16 percent for Y cities and 8 percent for employees residing in Z category of cities. While the new reduced rates of HRA  may not be sufficient for employees who fall in lower pay bracket, so it has been decided that HRA shall not be less than Rs 5400 for X, Rs 3600 for Y and Rs 1800 for employees of Z category of cities. This base rate has been calculated at 30 %, 20% and 10 %  for the minimum pay of Rs 18000. This scheme  will benefit more than 7.5 lakh employees who belongs to  1 to 3 Level.

Further, HRA rates will be revised in two phases to 27 percent, 18 percent and 9 percent when DA crosses 50 per cent and to 30 per cent, 20 percent and 10 percent when DA crosses 100 percent, respectively. As per the current inflation trends these rates will be revised when DA crosses 25 percent and 50 per cent respectively.

  1. Siachen Allowance

The panel had placed Siachen Allowance in the RH-Max cell of the R&H Matrix with two slabs of Rs 21,000 and Rs 31,500. After recognizing the extreme risk and hardship faced by military who deployed in Siachen continuous basis, it was decided to enhance the rates of Siachen Allowance from the existing rate from Rs 14,000 to Rs 30,000 per month for Jawans and from Rs 21,000 to Rs 42,500 per month for Officer.

  1. Dress Allowance

The different types of allowances for maintenance of uniforms have been rationalized and now, annually it will be paid in four slabs of  Rs 5000, Rs 10,000, Rs 15,000 and Rs 20,000  for various category of employees. Nurses will continue to get this on a monthly basis in view of high maintenance and hygiene requirements.

  1. Some important allowances paid to all employees:
  • Rate of Children Education Allowance has been increased from Rs 1500 per month  to Rs 2250 per month for one child and maximum of two children. Hostel Subsidy will increases from Rs 4500 to Rs 6750 per month.
  • Special Allowance rates for Child Care for Women with Disabilities have been increased from Rs 1500 to Rs 3000 per month.
  • Incentive of Higher Education for Civilians has been increased from Rs 2000 – Rs 10000 to Rs 10000 – Rs 30000.
  1. Recommendations of some important allowances for Indian Railways employees:
  • Additional Allowance rates for Indian Railways employees have been increased from Rs 500-1000 per month to Rs 1125- 2250 per month.
  • New Allowance for Special Train Controller’s is Rs 5000 per month has been introduced.
  1. Recommendations for some important allowances paid to Nurses & Ministerial Staffs of Hospital
  • The rate of Nursing Allowance has been increased from Rs 4800 to Rs 7200 per month.
  • The Operation Theatre Allowance rates have been increased from Rs 360 to Rs 540 per month.
  • Hospital Patient Care Allowance rates have been increased from Rs 2070 – 2100 to Rs 4100 – 5300 per month.
  1. Recommendations of some important allowances paid to Pensioners:

Fixed Medical Allowance rates for Pensioners have been increased from Rs 500 to Rs 1000 per month. This will benefit more than five lakh central government pensioners who don’t get CGHS facilities. The rate of Constant Attendance Allowance been increased from Rs 4500 to Rs 6750 per month.

  1. Recommendations of some important allowances paid to Department of Posts

The 7th Central Pay Commission recommendations to abolish Cycle Allowance mainly to Postmen and trackmen in Railways have not been accepted. The allowance for postmen in Department of Posts and trackmen in Railways, the cycle allowance rates have been increased from Rs 90 per month to Rs 180 per month. Through this more than 22,200 employees will get benefit.

  1. Allowances to Services like Defense, Police, CAPFs, Indian Coast Guard and Security Agencies
  • Earlier, the commission recommended abolition of Ration Money Allowance and free ration to Defense officers but now it has been decided that Ration Money Allowance will continue to be paid to them directly into to their bank account.
  • The facility of an additional free railway warrant is now granted to staff of Defense Forces who are serving in high altitude, CI Ops shall be extended to all staff of Indian Coast Guard and CAPFs.
  • The rates of Counter Insurgency Ops Allowance to Defense and CAPFs deployed in counter   insurgency operations will be governed by the R&H Matrix and the rates increased  from Rs 3000 –11700 to Rs 6000–16900 per month.
  • Rates of MARCOS and Chariot Allowance granted to marine commandos of Indian Navy will go up from Rs 10500 – Rs 15750 to Rs 17300 – Rs 25000 per month.
  • Commando Battalion allowance rates for Resolute Action paid to CRPF personnel placed in Naxal hit areas will increases from Rs 8400 – Rs 16800 per month to Rs 17300 – Rs 25000 per month.
  • Flying Allowance paid to flying branch and technical officers of Defense Forces will go up from Rs 10500 – Rs 15750  to Rs 17300 – Rs 25000 per month.
  • Now, Aeronautical Allowance has been extended also to Indian Coast Guard which is paid only to the staff of Indian Navy and the rate of this allowance has been increased from Rs 300 to Rs 450 per month.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.