Central govt staff to see 106-157 per cent hike in HRA from July

Mumbai: With the Cabinet clearing the recommendations of 7th Pay Commission on allowances with some modifications, government employees can expect an HRA hike in the range of 106 per cent to 157 per cent, say reports.

The Union Cabinet, chaired by Prime Minister Narendra Modi cleared the recommendations which will come into effect from July 1. The hike in HRA is expected to be huge, according to a report by Zee News.

The increased allowances is based on the recommendations of the Committee on Allowances (CoA) set up to examine the recommendations of the Pay Commission.

Here are few things to know about HRA hike -

1. The Pay Commission suggested reduction in HRA rates to:24 per cent for X category of cities – with a population of 50 lakh and above,
   20 per cent for Y category of cities – with a population of 5 to 50 lakh and
   
   10 per cent for Z category of cities – with a population below 5 lakh of cities.
2. The Committee of Allowances had however suggested that HRA should not be reduced as it may not be sufficient for employees in lower pay bracket.
3. The HRA rates approved by the Cabinet are as follows:
   Rs 5400 for X category of cities, which is 30 per cent of a minimum pay of Rs 18,000,
   Rs 3600 for Y category of cities, which is 20 per cent of a minimum pay of Rs 18,000 and
   Rs 1800 for Z category of cities, which is 10 per cent of a minimum pay of Rs 18,000.

According to Jaitley, this decision is set to benefit more than 7.5 lakh 1-3 levels of government employees.