Highlights of Cabinet approval on Allowances

Highlights of Cabinet approval on Allowances

 1. Number of allowances

recommended to be abolished and subsumed: Government has decided not to abolish 12 of the 53 allowances which were recommended to be abolished by the 7th CPC. The decision to retain these allowances has been taken keeping in view the specific functional requirements of Railways, Posts and Scientific Departments such as Space and Atomic Energy. It has also been decided that 3 of the 37 allowances recommended to be subsumed by the 7th CPC will continue as separate identities. This has been done on account of the unique nature of these allowances. The rates of these allowances have also been enhanced as per the formula adopted by the 7th CPC. This will benefit over one lakh employees belonging to specific categories in Railways, Posts, Defence and Scientific Departments.

2. House Rent Allowance


 HRA is currently paid @ 30% for X (population of 50 lakh & above), 20% for Y (5 to 50 lakh) and 10% for Z (below 5 lakh) category of cities. 7th CPC has recommended reduction in the existing rates to 24% for X, 16% for Y and 8% for Z category of cities. As the HRA at the reduced rates may not be sufficient for employees falling in lower pay bracket, it has been decided that HRA shall not be less than ?5400, ?3600 and ?1800 for X, Y and Z category of cities respectively. This floor rate has been calculated @ 30%, 20% and 10% of the minimum pay of ?18000. This will benefit more than 7.5 lakh employees belonging to Levels 1 to 3. 7th CPC had also recommended that HRA rates will be revised upwards in two phases to 27%, 18% and 9% when DA crosses 50% and to 30%, 20% and 10% when DA crosses 100%. Keeping in view the current inflation trends, the Government has decided that these rates will be revised upwards when DA crosses 25% and 50% respectively. This will benefit all employees who do not reside in government accommodation and get HRA.

3. Siachen Allowance

 7th CPC had placed Siachen Allowance in the RH-Max cell of the R&H Matrix with two slabs of ?21,000 and ?31,500. Recognizing the extreme nature of risk and hardship faced by officers / PBORs on continuous basis in Siachen, the Government has decided to further enhance the rates of Siachen Allowance which will now go up from the existing rate from ?14,000 to ?30,000 per month for Jawans & JCOs (Level 8 and below) and from ?21,000 to ?42,500 per month for Officers (Level 9 and above). With this enhancement, Siachen Allowance will become more than twice the existing rates. It will benefit all the soldiers and officers of Indian Army who are posted in Siachen.
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