7th Pay Commission: Cabinet clears hike in allowance, 50 lakh Central govt employees to benefit

The Union Cabinet on Wednesday cleared the allowance hike under the Seventh Pay Commission. Thirty-four modifications have been made, which will be implemented starting July 1, 2017.

"People will benefit from the new revised commission, thanks to the modifications made," said finance minister Arun Jaitley while addressing the media.

Jaitley added that medical allowance had been doubled to Rs 1,000 for pensioners.

According to Ministry of Finance, the rates of Siachen Allowance have increased from Rs 14,000 per month for soldiers to Rs 30,000. For officers the allowance has been raised from Rs 21,000 per month to Rs 42,500 per month for extreme risk and hardship.

The government also has increased rate of Nursing Allowance from Rs 4800 per month to Rs 7200 per month. The Operation Theatre Allowance increased from Rs 360 per month to Rs 540 per month.

Further, the hospital patient care allowance or Patient care allowance rose from Rs 2070-Rs 2100 per month to Rs 4100-Rs 5300 per month. However, 7th CPC recommendations modified and HPCA/PCA to continue for Ministerial staff.

The cabinet's decision will bring a smile to the face of over 50 lakh central government employees, who have been waiting for over a year for higher allowances under the 7th Pay Commission.

Apart from higher allowance, the issues like House Rent Allowance (HRA), Dearness Allowance (DA) and arrears will also be discussed.

The 7th Pay Commission had recommended HRA too be fixed at 24%, 16% and 8% depending on the cities employees work in. But, central government employees demanded 30%, 24% and 16% HRA.

Looking at the high protest by the employees, FM Jaitley last year formed a committee under the leadership of Finance Secretary Ashok Lavasa to look into matter. After several months, Lavasa panel submitted its recommendation report in April suggesting HRA to be fixed at between 25% and 27%.

Under the 7th Pay Commission, nearly 200 allowances have been subsumed into a smaller batch.

According to sources, the allowance hike under the 7th pay commision will be likely to announced after this evening's cabinet meet.