April 21, 2017

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7th Pay Commission: Recommendations of AK Mathur-headed panel on allowances- In Retrospect

Written By Admin on Apr 21, 2017 | April 21, 2017

Key highlights of recommendations of AK Mathur-headed 7th Pay Commission on allowances.

New Delhi: A high-level committee, headed by finance secretary Ashok Lavasa, which was asked to examine the 7th Pay Commission recommendation on allowances, is likely to submit its final report to Finance Minister Arun Jaitley this week.

The final recommendations on allowances will benefit over 47 lakh central government employees and 53 lakh pensioners.


The Lavasa Committee was constituted in June last year after the government implemented the recommendation of the 7th Pay Commission.
Below are the highlights of recommendations of AK Mathur-headed 7th Pay Commission on allowances 

(19 November 2015)
The Commission has recommended abolishing 52 allowances altogether. Another 36 allowances have been abolished as separate identities, but subsumed either in an existing allowance or in newly proposed allowances. Allowances relating to Risk and Hardship will be governed by the proposed Risk and Hardship Matrix.

Risk and Hardship Allowance: Allowances relating to Risk and Hardship will be governed by the newly proposed nine-cell Risk and Hardship Matrix, with one extra cell at the top, viz., RH-Max to include Siachen Allowance.
The current Siachen Allowance per month and the revised rates recommended are as follows:

 PresentProposed
1Service OfficersRs 21,000Rs 31,500
3JCO/ORsRs 14,000Rs 21,000

This would be the ceiling for risk/hardship allowances and there would be no individual RHA with an amount higher than this allowance.

  • House Rent Allowance (HRA): Since the Basic Pay has been revised upwards, the Commission recommends that HRA be paid at the rate of 24 percent, 16 percent and 8 percent of the new Basic Pay for Class X, Y and Z cities respectively. The Commission also recommends that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent respectively when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent.
  • In the case of PBORs of Defence, CAPFs and Indian Coast Guard compensation for housing is presently limited to the authorised married establishment hence many users are being deprived. The HRA coverage has now been expanded to cover all.
  • Any allowance not mentioned in the report shall cease to exist.
  • Emphasis has been placed on simplifying the process of claiming allowances

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