7th Pay Commission: No Arrears On Higher Allowances To Be Paid

Date : 13.6.2017

7th Pay Commission: No Arrears On Higher Allowances To Be Paid

New Delhi: The Finance Ministry officials involved with the process of higher allowances told The Sen Times on condition of anonymity that the government has decided that ‘no arrears on higher allowances will be paid to central government employees.

Finance Minister Arun Jaitley will place higher allowances proposal before the Cabinet in this month.

They said, “Government is very pleased that the higher allowances will be paid from July. It’s an important payment for the financial impact to central government employees but no arrears on allowances will be given to employees and the Finance Minister Arun Jaitley will place it before the Cabinet in this month.”

So, the announcement of higher allowances will come after 18 months of implementation of 7th Pay Commission recommendations.

“The delay in disbursal of higher allowances without arrears will help the government save Rs 2,200 crore per month while cumulative saving Rs 40,000 crore since 1 January last year,” the officials added.

The central government employees now get no new allowances (except Dearness Allowance) with their new pay structure as the cabinet referred the 7th Pay Commission recommendations relating to allowances to Committee on Allowances headed by Finance Secretary Ashok Lavasa to review it.

The 7th Pay Commission had recommended that of a total of 196 allowances, 52 be abolished altogether and 36 be abolished as separate identities by subsuming them in another allowance.

Employee unions were opposed it that governments complied with formation of the Committee on Allowances in June 2016.

The Committee on Allowances submitted its review report this year on April 27.

The report was then taken up by the Department of Expenditure for examination, following which it was passed on to Empowered Committee of Secretaries (E-CoS) headed by Cabinet Secretary P K Sinha set up to screen the 7th Pay Commission recommendations and to firm up the proposal for approval of the Cabinet.

The finance ministry officials also said that an Empowered Committee of Secretaries (E-CoS) dittoed the report of the committee on allowances.

“The committee on allowances also stuck with the 7th Pay Commission’s recommendations on allowances,” the Finance Ministry officials confirmed.

However, the Committee’s report on allowances under the 7th Pay Commission hasn’t made public.

The 7th Pay Commission also recommended slashing the House Rent Allowance (HRA) from 30, 20 and 10 per cent to 24, 16 and 8 percent of the Basic Pay for Class X, Y and Z cities respectively.

The central government employees’ unions demanded HRA at the rate of 30 per cent, 20 per cent and 10 percent of basic pay instead of 24, 16 and 8 percent.

They also demanded the government to implement higher allowances without further delay with effect from January 1, 2016.