HRA will be paid at the rate of 24 per cent, 16 per cent and 8 per cent of new basic pay for central govt employee

The Cabinet today approved the recommendation of the 7th pay commission on allowances including HRA or House Rent Allowance with 34 modifications which will be applicable with effect from July 1, 2017. The move is likely to benefit 34 lakh central government employees and 14 lakh defence personnel. The revised allowances are likely to cost the government an additional Rs. 30,748.23 crore per annum. The 7th pay commission examined 197 allowances and recommended abolition of 53 allowances and subsuming 37 in others.

Here are 10 things to know:

1. 1>HRA will be paid at the rate of 24 per cent, 16 per cent and 8 per cent of new basic pay.
2. 2>Also, the government said HRA will not be less than Rs. 5,400, Rs. 3,600 and Rs. 1,800, which are calculated at 30, 20 and 10 per cent of minimum pay of Rs. 18,000. 
3. 3>The revised minimum HRA will benefit 7.5 lakh Central government employees, the government said.
4. 4>The 7th pay commission had also recommended that the rate of HRA be revised to 27 per cent, 18 per cent and 9 per cent when DA or dearness allowance crosses 50 per cent, and further revised to 30 per cent, 20 per cent and 10 per cent when it crosses 100 per cent. Now, the government decided to revise HRA rates when DA crosses 25 per cent and 50 per cent respectively.
5. 5>For pensioners, the medical allowances have been doubled to Rs. 1,000, compared to Rs. 500 earlier. Constant attendance allowance on 100 per cent disablement increased from Rs. 4,500 to Rs. 6,750.
6. 6>Meanwhile, the government has also increased the nursing allowance paid to nurses and ministerial staffs of hospitals to Rs. 7,200 per month from Rs. 4,800 earlier.
7. 7>Operation theatre allowance increased from Rs. 360 per month to Rs. 540 per month and hospital patient care allowance (HPCA)/ patient care allowance (PCA) revised from Rs. 2,070-Rs. 2,100 to Rs. 4,100-Rs. 5,300 per month.
8. 8>The Cabinet modified the 7th Pay Commission Recommendations and now the HPCA and CPA benefits to continue for ministerial staff.
9. 9>Siachen allowances have been increased from Rs. 14,000 per month to Rs. 30,000 for soldiers and for officers the same will be Rs. 42,500 for extreme risk and hardship from Rs. 21,000 earlier.
10. 10>Economists say that disbursement of 7th pay commission allowances is expected to give a further boost to consumer spending and thus the broader economy.