Union Cabinet headed by Prime Minister Narendra Modi approved the recommendations of 7th Pay Commission with some modifications last week. The revised policies are applicable from July 1st 2017. Let’s take a look at these updates and 6 things that you need to know about the impact of 7th Central Pay Commission:
Pay Hike
Minimum salary of a central government employee is increased from the present Rs.7000 per month to Rs.18000 per month and maximum pay that is of the cabinet secretaries is hiked from the current Rs.2.25 to Rs.2.5 lakhs.
Employees
The revised rates of the allowances will affect more than 48 lakhs of central government employees and 53 lakh pensioners. 14 lakh employees and 18 lakh pensioners are from the defence forces.
House Rent Allowance – HRA
The 7th Pay Commission has recommended reduction in the existing rates of HRA from 30%, 20%, 10% to 24% for category X, 16% for Category Y and 8% for Category Z of cities. However, HRA is subject to change in two phases when DA crosses 50% and 100%:
i) When DA crosses 50%: HRA will be revised to 27%, 18%, 9% respectively
ii) When DA crosses 100%: HRA will be revised to 30%, 20%, 10% respectively
Transport Allowance: TA
The revision in TA rates has disappointed Level 1 and Level 2 employees. It is expected that they will be losing around Rs. 2372/- when switching to new Transport Allowance rates of 7th CPC. There has been a marginal decrease for Level 3 & 4 employees.
Siachen Allowance
Siachen allowance will be more than twice the existing rates. It will benefit the Indian Army personnel posted in harsh conditions of Siachen. The level 8 and below army soldiers will get Rs.30,000/- per month while Level 9 and above army officers will get Rs.42,500/- as Siachen allowance.
Touch Location Allowance
The areas under TLA (Tough Location Allowance) are divided into 3 categories and rates will be based on R&H (Risk & Hardship) matrix.
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