7th Pay Commission: Major highlights of Allowances approved by Union Cabinet

5th state finance commission

New Delhi: Resolution conveying the Central Government’s decision on recommendations of the 7th Pay Commission (CPC) on Allowances has been published in Gazette of India yesterday i.e.6th July, 2017.

Based on the Report of Committee on Allowances (CoA) of the 7th pay Commission and the recommendation of E-CoS, the Cabinet had earlier approved the modifications in 34 Allowances in its Meeting held on 28th June 2017.

All allowances are given effect from 1st July 2017.

Concerned Ministries have now been advised to issue their Orders on Allowances governed by them immediately so that the revised rates of allowances get reflected in the current month’s Salary Bills of the Government employees.

Major Highlights of the Allowances approved by the Union Cabinet are as follows:

  1. Cabinet approved recommendations of 7thCPC on allowances with 34 modifications – revised rates effective from 01.07.2017
  2. It will benefit 34 lakh Civilian employees and 14 lakh Defence Forces personnel
  3. 7thCPC examined 197 allowances, recommending abolition of 53 allowances and subsuming 37 in others.
  4. 7thCPC recommended revised rates commensurate with Dearness Allowance
  5. Fully DA-indexed allowances – no raise, not DA indexed raised by 2.25, partially indexed raised by 1.5, % based rationalised by 0.8
  6. Risk & Hardship Matrix evolved for allowances linked to risk and hardship
  7. 7thCPC projected additional financial implication at 29,300 cr per annum, modifications to have additional implication of Rs.1448.23 cr
  8. Combined additional financial implication estimated at 30748.23 crore per annum.

House Rent Allowance (HRA)

  1. HRA will be paid @24%, 16% & 8% for X, Y & Z cities respectively
  2. HRA not to be less than 5400, 3600 & 1800 for X,Y&Z cities, calculated @30,20,&10% of min pay of Rs.18000 – to benefit >7.5 lakh employee
  3. 7thCPC recommended revision of HRA when DA reaches 50% & 100%, Govt decided to revise rates when DA crosses 25% and 50% respectively.

Allowances paid to Indian Railways

  1. Additional Allowance increased from 500 / 1000 pm to Rs.1125 / 2250 pm and extended to Loco Pilot Goods and Senior Passenger Guards @Rs.750pm
  2. Special Train Controller’s [email protected] pm introduced for Train Controllers of Railways
  3. Allowances to Pensioners
  4. Fixed Medical Allowance for Pensioners increased from Rs.500 pm to Rs.1000 pm
  5. Constant Attendance Allowance on 100% disablement increased from Rs.4500 pm to Rs.6750 pm




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