7th Pay Commission – Govt Employees to Get 157% HRA Hike

Government employees will get 157 percent House Rent Allowance (HRA) hike in their July salary. Under 7th pay commission Union cabinet has approved recommendations on June 28 with 34 modifications. House rent allowance hike of 157 percent will benefit huge population of country.

Here is good news for Government employees. they would be receiving higher allowances.  157% hike expected in House rent allowance (HRA) this month will impact over forty eight lakh government employees. Prime minister Narendra Modi being head of Union cabinet approved recommendations of 7th pay commission on June 28 with 34 modifications. This is expected to impose an additional burden of Rs. 30, 748 crore on the national exchequer.

7th Pay Commission – Govt Employees to get 157% HRA Hike

More than 48 lakh central government employees are expecting HRA hike from this month.  The HRA hike in this month is expected to range between 106 per cent to 157 per cent.

Prime Minister-Narendra Modi being head of Union Cabinet approved recommendations of 7th pay commission on June 28 with 34 modifications. This is expected to impose an additional burden by  Rs 1,448 crore to Rs. 30, 748 crore on the national exchequer.

Committee on Allowances (CoA) was set up by union cabinet while approving the recommendations of the 7th pay commission. The COA was set up on 29th June to bring out a substantial change in the existing provisions. The 34 modifications are based on the suggestions made by COA and the Empowered Committee of Secretaries was set up to screen the recommendations of 7th pay commission.

HRA under Current Scenario

House Rent Allowance (HRA) division under current structure is paid as follows:-

  • 30 per cent for X category of cities (population of 50 lakh and above)
  • 20 percent for Y category of cities  (population of 5-50 lakh)
  • 10 per cent for Z category of cities  (population of below 5 lakh)

Finance Minister -Arun Jaitley shared that there was discussion regarding reduction in the HRA rates to 24 per cent for X, 16 percent for Y and 8 per cent for Z category of cities. But HRA at reduced rates does not seemed sufficient for employees of the lower bracket. Thus, the decision has been made that House rent allowance (HRA) will not be less than Rs 5400 for X category of cities, Rs 3600 for Y category of cities and in final stage will not be less than Rs. 1800 for Z category of cities.

For the minimum pay of Rs. 18,000;the floor rate has been calculated at 30 percent, 20 percent and 10 percent. Around seven lakh people from 1 to 3 level of employees will be benefited from such decision. House rent allowance hike of 157 percent will benefit huge population of country.

HRA after modification

Population of City            DA above
Present Proposed 25% 50%
Above 50 lakh (Class X) 30% 24% 27% 30%
5 lakh to 50 lakh (Class Y) 20% 16% 18% 20%
Below 5 lakh (Class Z) 10% 8% 9% 10%

As per 7th pay commission recommendation, the HRA rates will be revised upward in 2 phases to 27%, 18% and 9% when DA crosses 50% and to 30%, 20% and 10% when DA crosses 100%. Keeping in view the inflation trend, it has been decided that rates will be revised upwards when DA crosses 25% and 50% respectively.

Thus as per 7th Pay Commission, the HRA increase would range between 122 percent and 157 percent.

Stay tuned for more updates on 7th pay commission.

Source: Financial Express

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Vanshika Bansal

Vanshika is the so-called Chandigarh girl pursuing BBA at University of the Fraser Valley in Canada. She is dedicated, passionate about work and believes in 3 major things - hard work, herself and her dreams. You can write to her at hello@chandigarhmetro.com