7th Pay Commission: Prime Minister Narendra Modi, Jaitley meet: May review allowances for central government employees


Prime Minister Narendra Modi will meet Finance Minister Arun Jaitley and Finance Secretary Ashok Lavasa to discuss his views on Pay Commission allowances, according to sources.

Jaitley is expected to present the proposals regarding the said allowances before the Union Cabinet for approval sometime soon. However, Jaitley will be out of the country on an official visit to Russia.

Jaitley, who is also looking after the Defence portfolio, will leave for a four-day visit to Russia on June 20.

During his trip he will meet the Russian Defence Minister Sergey Shoygu to discuss matters of technical cooperation in the field of defence. He is expected to return by June 24.

This means Jaitley will not be present for the Cabinet meeting scheduled on Wednesday June 21 later this week. He is responsible for tabling proposals pertaining to allowance reforms mandated by the Seventh Pay Commission, and modified later by the Committee on Allowances and Empowered Committee of Secretaries (E-CoS).

The federal Cabinet too is reluctant to discuss the matter in absence of its Finance Minister as seen in the past two weeks. Twice the issue of reformed allowance structure has been dropped from the Cabinet’s agenda.

The Union Cabinet that met on Wednesday did not take up the issue of revised allowances under the Seventh Pay Commission for discussion.

It was the second time in the last fortnight when the Union cabinet was expected to take up the issue of revised allowances for Central government employees.

According to the sources, the Cabinet could take up the issue for discussion at a meeting this week. Several government employee federations are preparing to call for an all-India strike if the Centre fails to announce revised allowances by next week.

During the meeting, the top officials are is likely to brief on recommendations of the Committee on Allowances headed by Finance Secretary Ashok Lavasa, according to sources.

The Ashok Lavasa committee had examined the recommendation of higher allowance under the 7th Pay Commission and submitted its report to Finance Minister Arun Jaitley on April 27.

The Empowered Committee of Secretaries (ECoS) headed by Cabinet Secretary P K Sinha was also responsible for setting up to screen the report and firming up proposals for the Union Cabinet.

The committee on 7th Pay Commission headed by Justice A Mathur had suggested some modifications in some allowances that are applicable universally to all employees as well as certain other allowances which apply to specific employee categories.

The Seventh Pay Commission (SPC) had recommended slashing 53 of the 196 allowances received by employees. The SPC had also suggested merging 36 smaller allowances with bigger ones.

It has also suggested lowering the House Rent Allowance (HRA) rates for central government employees with respect to the type of city. For metro cities, the SPC had suggested cutting the HRA from 30 per cent to 24 per cent.

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 Empowered Committee of Secretaries (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 Empowered Committee of Secretaries (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.

According to sources, Narendra Modi government could start rolling out revised allowances from July.

The Empowered Committee of Secretaries (E-Cos) reviewed the Ashok Lavasa Committee recommendations and forwarded it to the government. Central government employees are currently waiting for a positive response from the government.

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