7th CPC House Rent Allowance : 7th CPC recommendations to reduce House Rent Allowance

7th CPC House Rent Allowance : 7th CPC recommendations to reduce House Rent Allowance

The 7th Central Pay Commission has been recommended to reduce the percentage of House Rent Allowance for all categories of Central Government employees rationalized to 24 percent, 16 percent and 8 percent of the Basic Pay for Class X, Y and Z cities respectively.

Click to view the classification of cities

Population of Cities/Towns	Class of Cities/Towns	HRA rates as % of Basic Pay (including MSP and NPA)
50 lakh and above	X	24%
50 –5 lakh	Y	16%
Below 5 lakh	Z	8%

The Commission also recommends that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent when DA crosses 50 percent, 

Population of Cities/Towns	Class of Cities/Towns	HRA rates as % of Basic Pay (including MSP and NPA)
50 lakh and above	X	27%
50 –5 lakh	Y	18%
Below 5 lakh	Z	9%

and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent.

Population of Cities / Towns	Class of Cities / Towns	HRA rates as % of Basic Pay (including MSP and NPA)
50 lakh and above	X	30%
50 –5 lakh	Y	20%
Below 5 lakh	Z	10%

HRA is the most important factor of allowance issuing to existing Central Government employees, it is given for compensate to live in rented house. The HRA rules are allowed for getting allowance even if he/she living in own house.

A major changes had been made in 6th CPC on HRA rules. The percentages were prescribed on basic pay according to the cities in India. The cities are classified as X, Y and Z and the rates of percentage respect of the cities are 30%, 20% and 10% on basic pay (Grade pay including).

Central Government employees are expecting changes in the rate of percentage according to cities.

NC JCM STAFF SIDE SUGGESTION ON HOUSE RENT ALLOWANCE

National Council JCM Staff Side given suggestion on House Rent Allowance for Central Government employees as under…

House Rent allowance. 
The present scheme of HRA is based on the recommendation of the 6th CPC, which
is as follows:

We reproduce hereunder the recommendation made by the third Central Pay Commission in the matter of grant of house rent allowance. (Para 29 Part I. Vol. IV.Chapter 56), which would be the best if implemented even today. While we find it difficult to accept the kind of parity suggested above, we are aware of the acute problem caused by the lack of adequate government housing and by the inadequate government housing and by the inadequacy of the existing rates of house rent allowance and recommend as follows:-

Government should take houses on long lease and make residential accommodation available to its employees on payment of 10% of their pay.

(ii) Government should lay down appropriate house rent allowance rates in different cities and towns based not on population criteria, but on an
actual assessment of the prevailing levels of rent in different cities and towns. Alternatively, certain notional rents for different types of
accommodation meant for officers and personnel of specified pay groups should be laid down for particular cities after studying the actual conditions in that city. The difference between the actual rent paid and 10% of pay should be reimbursed subject to a maximum of the difference between the notional rent and 10% of the pay. The existing norms in regard to entitlement of accommodation, size of rooms etc. could, if necessary, be reduced depending on the housing situation and the norms usually adopted by different income groups in renting accommodation in the various cities. Such notional rents should, to start with, be applied to all stations falling under the description of classified cities for purposes of House Rent Allowance, Additions could also be made to the list later on by including other cities deserving similar treatment.

 (iii) Till the Government is able to make arrangements recommended in the preceding sub-paragraphs, the rates of HRA should be as follows:-The above said recommendations is still to be acted upon by the Government and the transitory provisions suggested by them i.e. payment of allowances at a pre-determined rate on the basis of classification made of the cities depending upon the population continue to be employed. The non-implementation of the above recommendation of the third CPC , has without exception, gone to depress the wage of all sections of Central Government employees as they are perforce to spend more than what they receive as HRA for obtaining and retaining the accommodation.

The rates prescribed by the 6th CPC, though an improvement over its predecessor Commission, it has not improved the situation. The real estate value throughout the country has skyrocketed and owning an accommodation within the city/Municipal limit has become impossible for Government employees. There is not a single town/village where the real estate boom has remained unaffected. The phenomenal increase in the value of land has naturally impacted the rent, one is to pay on leasing house/flat. The house rent allowance does not bear even a small percentage of the rent. The 7th CPC may recommend to the Government to act upon the suggestion made by the 3rd CPC without any further delay. Pending action on the part of the Government, the Commission may suggest the following rates of House Rent allowance;