7th Pay Commission: Report on allowance hike delayed by one more week, likely to be submitted by April 18

Date of posting : 13 April 2017

In a major disappointment to more than 47 lack central government employees, the final report of the Ashok Lavasa committee will be announced only after another week of delay. The report, that is meant to revise the current allowances paid to all central government employees, will now be released only after 4-5 days.

Commissioned in June 2o16, the Ashok Lavasa committee was meant to come out with its recommendations by this week. The report will look into the abolition of 53 allowances along with the possibility of subsuming 36 further allowances, out of the 196 allowances under the seventh pay commission.

The committee is also looking at revising the rates of the existing allowances such as the House Rent Allowance. It has suggested that, depending on the city of residence, the HRA be paid at a rate of 24 per cent, 16 per cent and 8 per cent of the current basic pay.

Further, wherever the Dearance Allowance crosses 50 percent, the committee has recommended that the HRA be given at a rate of 27 per cent, 18 per cent and 9 per cent. In cases where the DA crosses 100 percent, the suggested rates are 30 per cent, 20 per cent and 10 per cent.

The Pay Commission has also recommended the abolition or subsuming of various non-essential allowances like acting, assisting cashier, cycle, condiment, flying squad, haircutting, rajbhasha, rajdhani, robe, shoe, shorthand, soap, spectacle, uniform, vigilance and washing. In order to take a final call, the committee has held two conclusive meeting on March 28 and April 6. The first meeting sought opinions from various ministries over the pay extended to their employees.

One of the key reasons for the delay is thought to be the Reserve Bank of India’s warning that a hike in the allowances at this time would have a negative impact on the current state of inflation. During the latest bi-monthly monetary policy review, the Governor of the Reserve Bank of India, Urjit Patel had broached the subject and said, “In case the increase in house rent allowance as recommended by the 7th CPC is awarded, it will push up the baseline trajectory by an estimated 100-150 basis points over a period of 12-18 months, with this initial statistical impact on the CPI followed up by second-order effects.”

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