The Union Cabinet might take up the issue of allowances for central government employees when it convenes on June 28. The matter has already been missed twice by the federal Cabinet twice this month on account of either Prime Minister Narendra Modi or Finance Minister Arun Jailtey being out of the country on separate foreign visits.
Around 50 lakh central government employees have been waiting for a word on allowances awarded by the Seventh Central Pay Commission. The rates are to be tabled before the Cabinet by Jaitley for final approval. The Empowered Committee of Secretaries has handed over its proposals in this regard to him on June 1.
The first Cabinet meeting this month on June 7 was cancelled as Modi was out of India on a four-nation trip. The second meeting on June 14 had no mention of allowances because Jaitley could not submit proposals in this regard. He was away on a trip to South Korea to attend the Asian Infrastructure Investment Meeting.
It was the third time this week that the Cabinet's agenda missed allowance rates under 7th Pay Commission as Jaitley is visiting Russia at the head of a defence delegation. Earlier this week , both leaders met in presence of Finance Secretary Ashok Lavasa to discuss the matter. Reports suggest that Modi has instructed to finalise allowance rates without delay.
However, the suspense over the allowance rates is expected to be over as both the leaders will be available for the Cabinet meet. Modi will be back from Washington visit; Jaitley will return from his Russia tour on June 24.
The matter of central government employees' allowances has been pending for almost one year now and the hiccups seem to stick even towards the end. The Pay Commission had recommended that out of a total 196 allowances, 52 be discontinued entirely whereas 36 other allowances should be subsumed under other allowances.
Apart from this, the pay panel called for cutting down the House Rent Allowance (HRA) which constituted the bulk of an employee's paycheck. The Pay Commission suggested HRA to be brought down to 24 per cent, 16 per cent and 8 per cent of the basic pay, to be paid according to the city the employee is positioned in.
The preceding Pay Commission had pegged the same at 30 per cent, 20 per cent and 10 per cent. The Cabinet formed the Committee on Allowances under Finance Secretary Ashok Lavasa in June last year after the central government employees expressed their dissatisfaction against them. The motive of this Committee was to look into the extensive changes suggested by the 7th Pay Commission.
The Lavasa Committee handed over its review report to Jaitley in April after consulting representations from various government departments and agencies. After approved by the Department of Expenditure, this report was forwarded to E-CoS for their consideration and consolidation.
The Empowered Committee submitted the report once again to the Finance Minister on June 1. Reports state that the E-CoS has capped HRA rates between 25 per cent and 27 per cent. The Cabinet may, however, approve rates higher than that to compensate for the delay in paying allowances as per new rates according to the 7th Pay Commission.
- business today