Rs 31,000 crore bonanza for government, defence staff

NEW DELHI: The Centre announced a bonanza of Rs 30,748 crore, including higher house rent allowance (HRA) and other allowances, for government employees and defence personnel on Wednesday.
Nearly 48 lakh employees are expected to benefit. While approving the recommendations of the Seventh Pay Commission, the Union Cabinet also improved upon them, ushering in benefits for serving employees, including defence personnel, as well as pensioners.Siachen allowances for defence personnel have been more than doubled — from Rs 14,000 per month to Rs 30,000 for soldiers and from Rs 21,000 to Rs 42,500 for officers for facing extreme risk and hardship. The increases will be effective from July 1.
Announcing the decision, finance minister Arun Jaitley said the HRA that has been approved will be 24%, 16% and 8% of the new basic pay. He added that the rate of HRA would be revised to 27%, 18% and 9% when the dearness allowance (DA) crosses 25%, and further to 30%, 20% and 10% when it crosses 50%.
Jaitley said besides the percentage increase in DA, the government has decided the minimum floor rate of HRA for the lowest categories of employees. “The HRA will not be less than Rs 5,400, Rs 3,600 and Rs 1,800 depending on the type of city and calculated at 30%, 20% and 10% of minimum pay of Rs 18,000 (sic),” an official statement said.
The HRA revision will benefit more than 7.5 lakh employees. HRA constitutes 60% of the total allowance of a government employee’s pay.
The finance minister said that the decisions regarding allowances have been taken in favour of the employees and some changes have been made to improve upon the recommendations.
He added that 108 allowances have been retained against the Pay Commission’s recommendation for 95 allowances.
Similarly, as against the recommendation to do away with 53 of the allowances, Centre has decided to abolish 43. Another 34 allowances have been subsumed and decisions with regard to 12 allowances relating to railways will be taken up later.
For pensioners, the medical allowance has been doubled to Rs 1,000 from the present to Rs 500 per month. Constant attendance allowance on 100% disablement has been increased from Rs 4,500 to Rs 6,750.
The nursing allowance to nurses and ministerial staff of hospitals has also been increased to Rs 7,200 per month from Rs 4,800 earlier. Similarly, operation theatre allowance has been hiked from Rs 360 per month to Rs 540 per month and hospital patient care allowance/patient care allowance from Rs 2,070 to Rs 2,100 and Rs 4,100 to Rs 5,300 per month, respectively.
The revised allowances are likely to put an additional Rs 30,748.23 crore annual financial burden on the government. The disbursement of higher allowances is expected to improve spending by this large section of serving government employees and pensioners.