The government has notified the recommendations of the 7th Central Pay Commission on allowances with 34 modifications, with a total financial implication of Rs 30,748.23 crore per annum, the Finance Ministry said on Friday.
"Ministries concerned have now been advised to issue their orders on allowances governed by them immediately so that the revised allowances get reflected in the current month's salary of government employees," a ministry statement said here.
The move will benefit 48 lakh government employees. The notification was published in the Gazette of India on Thursday, and comes into effect from July 1.
Based on the Report of Committee on Allowances and the recommendation of the Empowered Committee of Secretaries, the Cabinet had approved modifications in 34 allowances at its meeting on June 28.
No raise was given in fully Dearness Allowance-indexed allowances such as Transport Allowance. Allowances not indexed to DA were raised by a factor of 2.25 and the partially indexed ones by a factor of 1.5. The quantum of allowances paid as a percentage of pay was rationalised by a factor of 0.8.
House Rent Allowance is currently paid at 30 per cent for X (population of 50 lakh and above), 20 per cent for Y (5 to 50 lakh) and 10 per cent for Z (below 5 lakh) category cities.
Under the revised notification, there is reduction in the existing rates to 24 per cent for X, 16 per cent for Y and 8 per cent for Z category cities.
As the HRA at the reduced rates may not be sufficient for employees falling in the lower pay bracket, it has been decided that HRA shall not be less than Rs 5,400, Rs 3,600 and Rs 1,800 for X, Y and Z category of cities respectively. This floor rate has been calculated at the rate of 30 per cent, 20 per cent and 10 per cent of the minimum pay of Rs 18,000.
"This will benefit more than 7.5 lakh employees," it said.
Keeping in view the current inflation trends, the government has decided that these rates will be revised upwards when the DA crosses 25 per cent and 50 per cent respectively.
Other major allowances are:
*Rate of Siachen allowance for soldiers has increased from Rs 14,000 to Rs 30,000 and for officers from Rs 21,000 to Rs 42,500 per month for extreme risk and hardship.
*Flying allowance paid to uniformed services has been increased from Rs 10,500-Rs 15,750 per month to Rs 17,300-Rs 25,000 per month, which has also been extended to the Border Security Force Air Wing.
*The rate of nursing allowance has gone up from Rs 4,800 to Rs 7,200 per month.
*Fixed medical allowance for pensioners has been increased from Rs 500 to Rs 1,000 per month.