After the recently announced hike in Dearness Allowance (DA), Central Government employees could be in for some more good news. The house rent allowance granted to government employees is likely to rise soon. As per reports, the 7th Pay Commission is set to announce an increase in Dearness Allowance to 34% from the prevailing 31%.
According to the report, the House Rent Allowance is subject to increase when the dearness allowance exceeds 25%. The DA was previously increased to 28% in July 2021, and the HRA was subsequently revised.
The prevailing rates of HRA are 27%, 18%, and 9% based on the category of the city the employee resides in. The Central Government announced an increase in DA in October, to 31%. Now what remains to be seen is when the next HRA revision will happen?
7th Pay Commission Latest Updates
Given below are some of the other latest updates to the 7th Pay Commission announced by the Central Government:
- In a decision that will affect over one crore central government pensioners and employees, the central government has raised the Dearness Allowance by 3% to 12%. This comes after the previous hike in DA in August 2020, when it was raised to 9% from the previous 7%.
- The hike came into effect on January 1. This means that the employees will also retrospectively receive arrears for January. Central government employees are set to receive DA at 12%.
- In a move that brings positive news for academics, Bihar Chief Minister has announced that the madrassa teachers in the state will also get 7th Pay Commission salaries.
- The railway ministry has decided to set up a Committee to include new components within the umbrella of Risk and Hardship Allowance. The committee’s main objective will be holistically examining the inclusion of new components in the scope of Risk and Hardship Allowance announced in the 7th pay commission.
- The 7th pay commission aims to introduce uniformity in the retirement age for central government employees. The retirement age for the constable to commandant has been raised to 60 years from the previous 57 years.
Summary of 7th Pay Commission
Given below are some of the important aspects and new introductions in the 7th pay commission:
- The latest pay commission has established a new pay scale and structure that will grant pensioners and employees a 2.57% hike on their existing incomes.
- The salary for an entry-level government employee has been increased to Rs. 18,000 from the previous minimum of Rs. 7,000. The higher positions in the government, like Cabinet Secretary, will be granted a pay scale of Rs. 2.5 lakhs.
- The new ‘Fitment factor’ pay commission will provide all employees with a 3% annual increment.
- The newly introduced Pay Matrix will now be used instead of the previous pay grade standard.
- The maximum salary and compensation for government employees have been increased. Apex employees are set to receive an increased compensation of Rs. 2.25 lakhs per month. Officers in the cabinet will receive a maximum remuneration of Rs. 2.5 lakhs per month.
- The pay scale for defence personnel will begin at a minimum of Rs. 21,700 with a maximum of Rs. 2,50,000. This pay scale has been approved and implemented by the Finance Minister.
- Inadvertently, the changes in the pay matrices of the government pay scale will affect the country’s economy. The Indian Government is set to foot the bill for the cost of the changes. An amount of Rs. 73,650 crore was set apart in the Union Budget of 2018. For the same purpose, the railway ministry will also bear a cost of Rs. 29,300 crore
