On HRA, the 7th pay commission had recommended that it be paid at the rate of 24 per cent, 16 per cent and 8 per cent of the new basic pay, depending on type of cities. 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, respectively when DA crosses 50 per cent, and further revised to 30 per cent, 20 per cent and 10 per cent when DA crosses 100 per cent. With regard to allowances, employee unions have demanded HRA (house rent allowance) at the rate of 30 per cent, 20 per cent and 10 per cent.
The government had in June accepted the recommendation of Justice AK Mathur-headed 7th pay commission in respect of the hike in basic pay and pension. But the 7th pay commission's recommendations relating to allowances were referred to the Ashok Lavasa committee. The 7th pay commission had examined a total of 196 existing allowances and recommended abolition of 51 allowances and subsuming of 37 allowances.
Minister of State for Finance Arjun Ram Meghwal on March 24 clarified that the allowance committee is now in the process of finalising its report. The minister also explained why the allowance committee has taken more time to finalise its report. The allowance committee related to 7th pay commission awards "has taken more time than was initially prescribed in view of large number of demands received," he clarified.