Tuesday, 26 December 2017

Is the House Rent Allowance paid to Central Government employees as per the recommendations of 7th Pay Commission sufficient?


Is the House Rent Allowance paid to Central Government employees as per the recommendations of 7th Pay Commission sufficient?

If the question is to be answered at a superficial level, the answer is yes. Let us analyze things from the angle of a lower rung employee.

An employee is paid HRA at the rate of 24%, 16% and 8% of his basic salary based on the city where he works. For HRA purpose, cities in India are divided into three groups, namely X, Y and Z, and HRA is paid respectively at the rate of 24%, 16% and 8% uniformly for all categories of employees.
A person employed in Delhi will get 24% of his basic salary as HRA and an employee employed in Kanyakumari will get 8% of his basic salary as HRA. The minimum basic salary of a Central Government employee is Rs.18000. Accordingly, a person working in Delhi should get Rs.18000 x 24% = Rs.4320, and a person employed in Kanyakumari should get Rs.18000 x 8% = Rs.1440. But the minimum HRA applicable to all the three group of cities, namely X,Y and Z, are Rs.5400, Rs.3600 and Rs.1800 respectively. Accordingly, an employee working in Delhi will get Rs.5400, while an employee employed in Kanyakumari will get Rs.1800 as House Rent Allowance.

The important point to be noted here is Sixth Pay Commission had recommended HRA at the rate of 10%, 20% and 30% for Central Government employees and they were paid accordingly from 2008 to 2015. But the recommendation of the Seventh Pay Commission to reduce the HRA rates has led to the dissatisfaction among Central Government employees.

Though Seventh Pay Commission salary is paid to Central Government employees from 1-1-2016, the revised HRA paid since 1-7-2017 has increased their dissatisfaction further.

Moreover there was a great expectation for arrear payment for the period January 2016 to June 2017.
Non-fulfillment of these two highly expected demands has made the Central Government employees unhappy with HRA.


Classification of Cities / Towns Rate of HRA Rate of HRA (DA over 25%) Rate of HRA (DA over 50%)
X 24 % 27% 30%
Y 16% 18% 20%
Z 8% 9% 10%


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