Jul 13, 2017

7th Pay Commission – Allowances are Fine but What About Arrears on HRA, DA?

The government has cleared the air over 7th Pay Commission recommendations and said that nearly 50 lakh employees will get their House Rent Allowance (HRA), Dearness Allowance (DA) and others beginning July 2017. However, what happens to arrears on these allowances as the 7th Pay Commission came into force from January 1, 2016.

The reforms in allowance structure were under the pay panel were notified in the Gazette of India on July 6 without any mention of the arrears. The changes in allowances were approved by the Union Cabinet with 43 modifications on June 28 after recommendations in this regard were reviewed twice by two different committees.

Interestingly, the notification that the government published in the Gazette of India to make the 7th Pay Commission official does not talk about arrears on allowances like HRA and DA.

The government said that accepting the modifications to the 7th Pay Commission would add to its financial burden slightly. It said, “The modifications approved by the Government in the recommendations of the 7th CPC on allowances will lead to a modest increase of Rs 1,448.23 crore per annum over the projections made by the 7th CPC. The 7th CPC, in its Report, had projected the additional financial implication on allowances at Rs 29,300 crore per annum.”

The combined additional financial implication on account of the 7th CPC recommendations along with the modifications approved by the Cabinet is estimated at Rs 30,748.23 crore per annum, it said.

While most of the allowances have been hiked under the 7th Pay Commission, central government employees had to wait for a year to get them. The central government employees had received arrears on hiked basic pay under the pay panel in August 2016, effective from January 1, 2016. But no arrears were notified for the increased allowances which come into effect from July 1, 2017.

The 7th Pay Commission recommendations for basic pay were accepted in mid-2016 with the government stating that the revised pay will be given from January 1, 2016 — i.e. arrears.

However, the government has not notified any arrears for allowances. This means that HRA and DA will be paid from July 1, 2017 and not from January 1, 2016.

Simply put, employees expecting fat arrears on accumulated HRA and DA are in for a rude shock.

Source: BT

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